Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
V S M
ER  MONT  TATE  EDICAID 
 
F C U : 
  RAUD  ONTROL  NIT
 
2013 O R  
NSITE  EVIEW 
 
 
 
 
Stuart Wright  
Deputy Inspector General for 
Evaluation and Inspections 
 
December 2013 
OEI-02-13-00360   
EXECUTIVE SUMMARY:  VERMONT STATE MEDICAID FRAUD CONTROL 
UNIT:  2013 ONSITE REVIEW 
OEI-02-13-00360 
 
WHY WE DID THIS STUDY 
 
The Office of Inspector General (OIG) oversees all Medicaid Fraud Control Units 
(MFCUs or Units) with respect to Federal grant compliance.  As part of this oversight, 
OIG reviews all Units. These reviews assess Unit performance in accordance with the 
12 MFCU performance standards and monitor Unit compliance with Federal grant 
requirements, laws, and regulations.   
 
HOW WE DID THIS STUDY  
 
We based our review on an analysis of data from six sources:  (1) a review of policies, 
procedures, and documentation related to the Units operations, staffing, and caseload; 
(2) a review of financial documentation; (3) structured interviews with key stakeholders; 
(4) structured interviews with the Units management and staff; (5) an onsite review of 
case files; and (6) an onsite review of Unit operations. 
 
WHAT WE FOUND 
 
From fiscal year (FY) 2010 through FY 2012, the Unit reported combined civil and 
criminal recoveries of $15 million, 18  convictions, and 36 civil settlements and judgments.   
Although most case files indicated supervisory approval to open and close cases, almost 
all lacked documentation of periodic supervisory reviews.  The Director and staff 
reported that such reviews occur on a regular basis but are not generally documented in 
the case files.  Also, the Unit did not refer all convictions to OIG appropriately.  In 
addition, large caseloads hinder the Units ability to investigate and prosecute fraud and 
abuse in a timely manner.  Lastly, we identified as beneficial (1) the Units creation of  
Provider Focus Teams to collaborate on existing cases with the Program Integrity Unit in 
the Department of Vermont Health Access; and (2) the development of the Elder Justice 
Working Group, which has initiated an effort to reduce the use of antipsychotics in 
nursing homes in Vermont.   
 
WHAT WE RECOMMEND 
 
We recommend that the Unit (1) ensure that case files contain documentation of 
supervisory reviews; (2) ensure that all convicted individuals are appropriately referred to 
OIG for program exclusion; and (3) assess the adequacy of existing staffing levels and 
take appropriate action based on that assessment.  The Unit concurred with all three of  
our recommendations.  
   
   
   
TABLE OF CONTENTS 
                    
  Objective......................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................5 

Findings........................................................................................................7 

From FY 2010 through FY 2012, the Unit reported combined     

civil and criminal recoveries of $15 million, 18 convictions, and 

36 civil settlements and judgments ...................................................7 

Although most case files indicated supervisory approval to open  

and close cases, almost all lacked documentation of periodic  

supervisory reviews ..........................................................................8 

The Unit did not refer all convictions to OIG appropriately .............8 

Large caseloads hinder the Units ability to investigate and 

prosecute fraud and abuse in a timely manner .................................9 

Other observations:  Provider Focus Teams and Elder Abuse 

Working Group ..............................................................................10 

Conclusion and Recommendations... ........................................................12 

Unit Comments ..............................................................................13 

Appendixes ................................................................................................14 

A: 	Performance Standards for Medicaid Fraud Control Units .....14 

B: 	2012 Revised Performance Standards  .....................................18 

C: Referrals of Patient Abuse and Neglect, Provider Fraud, and 

Theft of Patient Funds to the Medicaid Fraud Control Unit by 

Source, Fiscal Years 2010 through 2012 ........................................24 

D: 	Cases Opened and Closed by Provider Category and Case 

Type, Fiscal Years 2010 through 2012 .....................................25 

E: 	Confidence Intervals for Estimates ..........................................28 

F: Unit Comments.........................................................................29 

Acknowledgments......................................................................................32 

 
 
   
   
OBJECTIVE 
To conduct an onsite review of the Vermont State Medicaid Fraud Control 
Unit (MFCU or Unit). 
BACKGROUND 
The mission of State MFCUs, as established by Federal statute, is to 
investigate fraud and patient abuse and neglect by Medicaid providers and 
to prosecute it under State law.1  Pursuant to Title XIX of the SSA, each 
State must maintain a certified Unit unless the Secretary of Health and 
Human Services determines that operation of a Unit would not be 
cost-effective because (1) minimal Medicaid fraud exists in that State and 
(2) the State has other adequate safeguards to protect Medicaid 
beneficiaries from abuse and neglect.2  Currently, 49 States and the 
District of Columbia (States) have created such Units.3 In fiscal year 
(FY) 2012, combined Federal and State grant expenditures for the Units 
totaled $217.3 million, with Federal funds representing $162.9 million of 
this amount.4  In FY 2012, the Vermont Unit was awarded $913,816 in 
combined State and Federal funds.5    
To carry out its duties and responsibilities in an effective and efficient 
manner, each Unit must employ an interdisciplinary staff that consists of at 
least an investigator, an auditor, and an attorney.6  Unit staff review 
complaints provided by the State Medicaid agency and other sources and 
determine their potential for criminal prosecution and/or civil action.  In 
FY 2012, the 50 Units collectively obtained 1,337 convictions and 
823 civil settlements or judgments.7   That year, the Units reported 
recoveries of approximately $2.9 billion.  
 
1 Social Security Act (SSA)  1903(q).  

2 SSA   1902(a)(61).  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 health care facilities. 

3 North Dakota and the territories of American Samoa, Guam, the Northern Mariana 

Islands, Puerto Rico, and the U.S. Virgin  Islands have not established Units. 

4 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures And 

Statistics, March  2013.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2012.asp on  March 5, 2013.  All  FY references in
  
this  report  are based on  the Federal FY  (October 1 through September 30). 
 
5 Office of Inspector General (OIG) analysis of  Notice of Award for Vermont for  

FY 2012. 
  
6 SSA  1903(q)(6) and 42 CFR  1007.13. 
 
7 OIG,  State Medicaid Fraud Control Units  Fiscal Year 2012 Grant Expenditures And 

Statistics, March  2013.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2012.asp on  March 5, 2013.  
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   1   
   
Units are required to have either Statewide authority to prosecute cases or 
formal procedures to refer suspected criminal violations to an agency with 
such authority.8  In Vermont and 43 other States, the Units are located 
within offices of State Attorneys General; in the remaining six States, the 
Units are located in other State agencies.9 Generally, Units outside of the 
Attorneys General offices must refer cases to other offices with 
prosecutorial authority. 
Additionally, each Unit must be a single identifiable entity of State 
government, distinct from the State Medicaid agency, and each Unit must  
develop a formal agreementi.e., a Memorandum of Understanding 
(MOU)that describes the Units relationship with that agency.10   
Oversight of the MFCU Program  
The Secretary of Health and Human Services delegated to OIG the authority 
to annually certify the Units and to administer grant awards to reimburse 
States for a percentage of their costs in operating certified Units.11  All Units  
are currently funded by the Federal Government on a 75-percent matching 
basis, with the States contributing the remaining 25 percent.12   To receive  
Federal reimbursement, each Unit must submit an initial application to 
OIG.13  OIG reviews the application and notifies the Unit if the application is 
approved and the Unit is certified. Approval and certification are for a 
1-year period; the Unit must be recertified each year thereafter.14    
Pursuant to Title XIX of the SSA, States must operate Units that effectively 
carry out their statutory functions and meet program requirements.15  OIG 
developed and issued 12 performance standards to define the criteria it 
applies in assessing whether a Unit is effectively carrying out statutory 
 
8  SSA  1903(q)(1). 
 
9 Among those States with a Unit, the Unit shares responsibility for protecting the 

integrity of the Medicaid  program with the section of the State Medicaid agency that 

functions as the Program Integrity Unit.  Some States also employ a Medicaid Inspector 

General who conducts and coordinates activities combating  fraud, waste, and abuse for 

the State agency. 

10  SSA  1903(q)(2); 42  CFR  1007.9(d). 
  
11 The portion of funds reimbursed to States by the Federal  Government for its share of 
 
expenditures for the Federal  Medicaid program, including  the MFCUs, is  called Federal 
 
Financial Participation.  

12  SSA 1903(a)(6)(B).  

13 42 CFR   1007.15(a). 

14 42 CFR   1007.15(b) and  (c). 

15  SSA  1902(a)(61). 
 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   2   
   
functions and meeting program requirements.16  Examples include 
maintaining an adequate caseload through referrals from several sources, 
maintaining an annual training plan for all professional disciplines, and 
establishing policy and procedure manuals to reflect the Units operations.  
See Appendix A for a complete list of the 1994 performance standards and 
Appendix B for a complete list of the 2012 performance standards. 
Vermont Unit 
In Vermont, the MFCU is known as the Medicaid Fraud and Residential 
Abuse Unit, and is located in the Vermont Attorney Generals Office. The 
Unit Director reports to the Chief of the Criminal Division, who reports to 
the Deputy Attorney General. The Unit has the authority to prosecute 
Medicaid fraud and patient abuse and neglect cases.  
As of January 2013, the Unit had eight employees:  the Unit Director, who 
also serves as an attorney; two additional attorneys; two investigators; two 
auditors (who in the Vermont Unit are known as fiscal and regulatory 
analysts, or analysts); and a program technician.   
The Unit receives referrals of provider fraud from a variety of sources, 
including the Program Integrity Unit in the Department of Vermont Health 
Access; the Survey and Certification program, part of the Division of 
Licensing and Protection in the Vermont Department of Aging and 
Independent Living; and the Vermont Department of Health.  The Unit 
receives referrals of patient abuse and neglect from a variety of sources, 
including the Survey and Certification program; Adult Protective Services, 
which is also part of the Department of Aging and Independent Living; 
and the Office of Professional Regulation, part of the Office of the 
Vermont Secretary of State.  From FY 2010 through FY 2012, the Unit 
received a total of 224 referrals of fraud, 241 referrals of patient abuse and 
neglect, and 69 referrals of theft of patient fundsan average of 75, 80, 
and 23 referrals, respectively, each year.  See Appendix C for a 
breakdown of referrals by type, year, and source. 
When the Unit receives a referral, the Director decides either to accept it 
after initial review of the complaint, or to defer a decision pending a 
preliminary investigation.  If necessary, the referral is also reviewed by the 
Unit Case Intake Committee.  This committee consists of the Unit 
Director, an attorney, an investigator,  and an analyst.  The Director assigns 
open cases to an investigative team.  Investigative teams are led by one of 
 
16 59 Fed. Reg. 49080 (Sept. 26, 1994).  Accessed at http://oig.hhs.gov on 
November 5, 2012.  OIG published  a revision of  the performance standards, 77  Fed.  Reg. 
32645 (June 1, 2012).  This review applies the previous standards (published on  
September 26, 1994) for the review  period  of FY  2010 through May 31, 2012, and the 
standards published on  June 1,  2012, when  assessing Unit operations after May  31, 2012.  
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   3   
   
two Unit attorneys (or the Unit Director), with support from one of two 
investigators, one of two analysts, and the program technician.  See 
Appendix D for additional information on the Units opened and closed 
cases, including a breakdown by case type and provider category. 
The Unit may open a case and pursue it through a variety of actions, 
including criminal prosecution or civil action.  The Unit may close a case 
through a criminal or civil resolution, through a referral to another agency, 
or for other reasons. The Unit also participates in globali.e., 
multi-Statecivil cases, coordinated by the National Association of  
Medicaid Fraud Control Units (NAMFCU). 
METHODOLOGY 
Our review covered the 3-year period of FYs 2010 through 2012.  We  
analyzed data from six sources:  (1) a review of policies, procedures, and 
documentation relating to the Units  operations, staffing, and caseload for 
FYs 2010 through 2012; (2) a review of financial documentation for FYs 
2010 through 2012; (3) structured interviews with key stakeholders; 
(4) structured interviews with the Units management and staff; (5) an 
onsite review of case files that were open in FYs 2010 through 2012; and 
(6) an onsite review of Unit operations conducted in July 2013.   
We analyzed data from all six sources to describe the caseload and assess 
the performance of the Unit.  We also analyzed the data to identify any 
opportunities for improvement and any instances in which the Unit did not 
meet the performance standards or was not operating in accordance with 
laws, regulations, and policy transmittals.17 In addition, we described 
noteworthy practices that appeared to benefit the Unit, based on 
statements from Unit staff, data analysis, and our own judgment.  We did 
not independently verify the effectiveness of these practices, but included 
the information because it may be useful to other Units in their operations. 
Data Collection and Analysis 
Review of Unit Documentation.   We requested and reviewed documentation, 
policies, and procedures related to the Units operations, staffing, and cases, 
including its annual reports, quarterly statistical reports, and responses to 
recertification questionnaires.  We also requested and reviewed the Units  
data describing its caseload, prosecutions, and recoveries.  Data collected 
included information such as the number of referrals received by the Unit 
and the number of investigations opened and closed.   
 
17 All relevant  regulations, statutes, and  policy transmittals are available online at 
http://oig.hhs.gov. 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   4   
   
Review of Fiscal Control.  We reviewed the Units control over its fiscal 
resources to identify any internal control issues or other issues involving 
use of resources. Prior to the onsite review, we reviewed the Units 
financial policies and procedures; its response to an internal control 
questionnaire; and documents (such as financial status reports) related to 
MFCU grants. During the onsite review, we reviewed a sample of the 
Units purchase and travel transactions.  In addition, we reviewed vehicle 
records, the equipment inventory, and a sample of time and effort records.  
Interviews With Key Stakeholders. We conducted structured interviews 
with seven individual stakeholders who were familiar with Unit 
operations. We interviewed key stakeholders in (1) the Program Integrity 
Unit; (2) Adult Protective Services; (3) the Survey and Certification 
Program; (4) the Office of Professional Regulation; and (5) the 
Administrator of Childrens Personal Care Services, an agency within the 
Vermont Department of Health.  We  also interviewed (6) a Special Agent 
in OIGs Region I (the region that includes Vermont) who was familiar 
with the Unit and (7) the Chief of the Criminal Division of the Attorney 
General of Vermont.  These interviews focused on the Units interaction  
with external agencies, Unit operations, opportunities for improvement, 
and any practices that appeared to benefit the Unit and that may be useful 
to other Units in their operations. 
Interviews With Unit Management and Staff.   We conducted structured 
interviews with the Units Director and staff.  We asked the Director for 
additional information to better understand the Units operations, to identify 
opportunities for improvement, to identify practices that appeared to benefit 
the Unit and that may be useful to other Units, and to clarify information 
obtained from other data sources. We also interviewed the Units two 
analysts, two attorneys, two investigators, and the program technician.  We  
asked similar questions of these staff. 
Onsite Review of Case Files. We selected a simple random sample of      
100 case files from the 286 cases that were open at any point from  
FY 2010 through FY 2012. The design of this sample allowed us to 
estimate the proportion of all 286 case files with certain characteristics at 
the 95-percent confidence level. We reviewed these 100 sampled case 
files and the Units processes for monitoring the status and outcomes of 
cases. From these 100 case files, we selected another simple random  
sample of 50 cases for a more in-depth review.  
Onsite Review of Unit Operations. While onsite, we reviewed the Units 
operations. Specifically, we reviewed the Units process for intake of 
referrals, security of data and case files, and the general functioning of the 
Unit. 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   5   
   
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.    
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   6   
   
FINDINGS 
From FY 2010 through FY  2012, the Unit reported 
combined civil and criminal recoveries of $15 million, 
18 convictions, and 36 civil settlements and 
judgments 
Unit recoveries more than doubled from $3.7 million in FY 2010 to 
$8.7 million in FY 2012.  State-onlyi.e., non-globalcivil case 
recoveries had the largest increase during this period, to $328,866.  
Additionally, recoveries from global civil casesi.e., multi-State 
NAMFCU casesmore than doubled, accounting for 96 percent of total 
recoveries in FY 2012. Over the 3-year period, the Unit reported 
recoveries of $15 millionan average of $5 million annually.  (See 
Table 1.) The Unit also reported 18 convictions and 36 civil settlements 
and judgments from FY 2010 through FY 2012. 
Table 1: Unit Recoveries, FYs 2010 through 2012  
 
    Annual  
FY 2010   FY 2011   FY 2012   Total   Average 
Reported  
Criminal 
Recoveries  $7,598  $6,658   $10,230   $24,486   $8,162  
Reported Civil 
Recoveries  
State Only   $14,125  $200,990  $328,866   $543,981   $181,327  
Reported Civil 
Recoveries  
Global  $3,708,149  $2,454,715  $8,393,446  $14,556,309   $4,852,103  
Total Reported 
Recoveries 
$3,729,872  $2,662,362  $8,732,541  $15,124,775   $5,041,592 
Source: OIG analysis of Unit data, 2013.  
From FY 2010 through FY 2012, the overall number of referrals received 
by the Unit decreased slightly, from 222 to 192.  Additionally, the 
breakdown of referrals changed, resulting in a decrease in the number of 
patient abuse referrals and an increase in the number of fraud 
referrals. This was primarily driven by a decrease in patient abuse 
referralsfrom 92 to 64from the State Survey and Certification 
program and an increase in fraud referralsfrom 5 to 15from the State 
Program Integrity Unit.  See Appendix B for more detailed information on 
the number of referrals by source. 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   7   
   
Although most case files indicated supervisory 
approval to open and close cases, almost all lacked 
documentation of periodic supervisory reviews 
According to Performance Standard 6, the Unit should complete cases 
within a reasonable timeframe.18 As a part of this standard, supervisors 
should approve the opening and closing of cases and supervisory reviews 
should be conducted periodically and noted in the case file to ensure 
timely case completion.  In our review, we found that most case files 
contained documentation indicating supervisory approval to open and 
close the case.  Specifically, 89 percent of case files had an opening 
memorandum approved by the Director and 96 percent had a closing 
memorandum approved by the Director.  However, 96 percent of Unit 
case files contained no documentation indicating periodic reviews, or at 
least one supervisory review beyond opening and closing approval.19 See 
Appendix E for confidence intervals. 
Although the Director and staff reported that supervisory case reviews 
occur on a regular basis, they acknowledged that these reviews were more 
informal and not generally documented in the case files.  The Director  
noted, and Unit staff confirmed, that case supervision is conducted at 
several points during the investigation and prosecution stages.  For 
example, case discussions are held during the complaint intake; the 
opening of a complaint for full investigation; the development of a case 
investigation plan; the case investigation; and the preparation of a 
prosecution memorandum, charging recommendation, and decision.  Case 
supervision also occurs during weekly administrative meetings with the 
Director, at quarterly staff meetings and individual team meetings, and on 
an ad hoc basis with the Chief of the Criminal Division.  The Units 
policies and procedures manual describes procedures for several of these 
supervisory reviews.  
The Unit did not refer all convictions to OIG 
appropriately 
According to Performance Standard 8(d), the Unit must send reports of 
convictions to OIG within 30 days or other reasonable time period for 
the purpose of excluding individuals and entities from participation in 
 
18 Performance standards cited in this report are found at  59 Fed. Reg. 49080 and dated 
Sept. 26, 1994, unless otherwise noted.  
19 Of the 100 case files we reviewed, 25 were for multi-State cases thatbecause they 
involved  NAMFCUwere worked  on primarily by the Unit Director.  Because the Unit 
Director was the only supervisor of these cases in the Unit, we excluded these 25 case 
files from our analysis of  documented periodic supervisory review.   Of the remaining 
75 case files, only 3 included  documentation of  periodic supervisory reviews.  
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   8   
   
Federally funded healthcare programs, including Medicare and 
Medicaid.20  If a Unit fails to properly ensure that convicted providers are 
referred for exclusion, those providers may be able to continue to submit 
fraudulent claims and receive payments.  
From FY 2010 through FY 2012, the Vermont Units investigations 
resulted in the sentencing of 18 individuals for health care fraud or for 
abuse, neglect, or financial exploitation of patients.  Of these, 8 were 
referred to OIG for exclusion within  30 days.  Another 5 were referred 
within 31 to 50 days, and 2 were referred more than 100 days after 
sentencing. The Director explained that in these two cases, the referrals 
were delayed because the Unit was awaiting resolution of restitution 
hearings. In addition, the Unit did not refer 3 of the 18 cases for 
exclusion. These three cases were prosecuted in conjunction with an OIG 
agent and the U.S. Attorneys Office in the District of Vermont.  The Unit 
Director explained that the Unit played a secondary role and did not 
ensure that the paperwork was submitted.  
Large caseloads hinder the Units ability to investigate 
and prosecute fraud and abuse in a timely manner 
According to current Performance Standard 2(b), the Unit employs 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. 
Although the Unit was at the staffing level approved by OIG at the time of 
our review, the Unit Director and almost all staff reported that limited staff  
size and large caseloads make it difficult to investigate and prosecute 
cases in a timely manner.  Unit investigators reported having caseloads of 
between 36 and 40 cases each, whereas they said that the ideal caseload 
would be between 10 and 20 cases each. The national average is 18 cases  
per investigator. 21    
 
20 Under 42  U.S.C.  1320a-7(a), OIG is  required to exclude from participation in Federal  
health care programs any person or entity convicted of a criminal offense related to the 
delivery  of an item or service under the Medicaid program or to the neglect or abuse of  
patients in residential health care facilities.  See also 42 CFR   1001.1901.  For 
individuals and entities convicted of program-related  crimes, patient  abuse, felony  health  
care fraud, and felonies relating to controlled substances, a mandatory exclusion is 
required.  
21 For FY  2012,  the number of investigators Nationwide was 841 and the number of cases 
was 15,534.  The number of cases can be accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/expenditures_statistics/fy2012-statistical-chart.htm.  
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   9   
   
Additionally, the Director identified the size of the Units caseload as the 
main obstacle preventing the Unit from meeting timeliness goals.  He 
noted that in addition to cases being deferred pending his decisions on 
how to proceed with them; cases are occasionally closed due to lack of 
resources and then must be returned to the referring agency.  He said that 
the Unit has a critical need for staff, adding:  [W]e place an enormous 
burden on our investigators. According to the Unit Director, when the 
Unit was created in 1979, it had six positions to investigate and prosecute 
fraud and the Vermont Medicaid program had a budget of $800,000.  In 
2012, the budget of the Vermont Medicaid program had increased to more 
than $1 billionmore than a tenfold increase since 1979yet the Units  
staff had increased to just eight permanent positions.22  
Unit staff also indicated that large caseloads hinder their efforts.  
According to one staff member, [I]t is difficult because [the investigators] 
have so much work ... we get backlogged sometimes.  He added that the 
Units policy to conduct biannual case reviews is affected, noting the 
cases that are languishing may or may not get a 6 month review.  Other 
staff members expressed similar concerns about the amount of cases and 
the delays created by caseload size.  One staff member noted that to 
improve the Units performance,  [W]e need to get ourselves to the point 
where we have a manageable caseload. 
Stakeholders concurred that large caseloads hinder the Units ability to 
handle cases in a timely manner.   The Director of the Program Integrity 
Unit, whose agency provides an increasing number of referrals to the Unit, 
noted that the Unit needs more staff to catch up to the increase in 
referrals.  He further stated that lack of staffing resources is the Units  
biggest problem, adding that it would improve their effectiveness if they 
had more investigators and attorneys.  Another stakeholder expressed 
concerns with the Units current caseload, saying that cases are delayed 
because [Unit staff] are overloaded and cant move the cases and that 
they sometimes have too many cases to get to.  Another stakeholder 
said, [I]t would be beneficial if they had a larger staff.  They have a lot on 
their plate.  
Other observations:  Provider Focus Teams and Elder 
Justice Working Group 
 
22 Vermont MFCU responses to the Vermont MFCU FY 2012 Recertification 
Questionnaire.  OIG recertifies Units each year.  As part of that recertification process, 
Units submit responses to a questionnaire to describe Unit operations and  performance. 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   10   
   
In April 2011, the Unit Director created Provider Focus Teams in 
collaboration with the Program Integrity Unit in the Department of 
Vermont Health Access.   These interagency teams were intended to 
generate an increased number of referrals of new cases, facilitate existing 
(i.e., already open) cases, develop provider training, and make program  
recommendations.  The teams, which consisted of one to two staff 
members from the Unit and a similar number from the Program Integrity 
Unit, met at least every other month.  Each team focused on one of four 
areas:  mental health, narcotic prescribers, pharmacies, and durable 
medical equipment. 
Although the provider-focused teams did not meet the goal of increasing 
the number of referrals and were discontinued, they had a number of 
merits.  According to the MFCU Director, the teams had many indirect 
benefits, [including] training, building relationships, [and] program  
recommendations.  The Program Integrity Unit Director confirmed that 
the teams were effective in coordinating provider training and in 
generating program recommendations.  The Director of the Program  
Integrity Unit also said that the provider-focused teams were successful in 
collaborating on existing cases.   The MFCU Director agreed, noting that 
having these interagency teams meet on a regular basis to discuss open 
cases fostered discussion, and that as a result, the Unit received more 
substantive referrals from the Program Integrity Unit. 
In addition, in June 2011, the MFCU Unit Director helped create the 
Vermont Elder Justice Working Group, consisting of representatives from  
State and Federal advocacy, regulatory, and law enforcement agencies.  
The groups mission is to create opportunities for improving quality health 
care for the elderly in long-term  care settings and other caregiving 
programs by improving communications among stakeholders and law 
enforcement. 
The first initiative of the group focused on reducing prescriptions for, and 
the administration of, unnecessary antipsychotic medication in elderly 
residents with dementia.  The group targeted Vermont nursing homes that 
exceeded the national average for antipsychotic use and sent a written 
educational alert that reported the numbers of residents in the facility who 
were prescribed antipsychotics and how those numbers compared to the 
average numbers in nursing homes in Vermont and the Nation.  The group 
plans to provide nursing homes with followup educational alerts on a 
biannual basis until the facilities reach rates of use that are at or below the 
national average.    
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   11   
   
CONCLUSION AND RECOMMENDATIONS 
From FY 2010 through 2012, the Unit reported combined civil and 
criminal recoveries of $15 million, 18  convictions, and 36 civil settlements 
and  judgments.   Although most case files indicated supervisory approval to 
open and close cases, almost all lacked documentation of periodic 
supervisory reviews. The Director and staff reported that such reviews 
occur on a regular basis but are not generally documented in the case files.  
Also, the Unit did not refer all convictions to OIG appropriately.  In 
addition, large caseloads hinder the Units ability to investigate and 
prosecute fraud and abuse in a timely manner.  Lastly, we identified as 
beneficial the Units creation of Provider Focus Teams to collaborate on 
existing cases with the Program Integrity Unit, and the development of the 
Elder Justice Working Group, which has initiated an effort to reduce the 
use of antipsychotics in nursing homes in Vermont.   
     
    We recommend that the Unit: 
Ensure that case files contain documentation of supervisory  
reviews  
The Unit should develop a means of documenting its regular supervisory 
case file reviews and ensure that this documentation is included in each 
individual case file. 
Ensure that all convicted individuals are appropriately referred 
to OIG for program exclusion 
The Unit should ensure that all convictions are referred to OIG for purposes 
of program exclusion within 30 days of sentencing, in accordance with 
Performance Standard 8(d) of the 2012 performance standards. 
Assess the adequacy of existing staff levels and take 
appropriate action based on that assessment 
The Unit should assess whether professional staffing levels are 
commensurate with the States total Medicaid program expenditures.  
Additionally, the Unit should determine whether existing staffing levels 
are sufficient to respond to the volume of referrals and to investigate and 
prosecute all the Units cases in a timely manner.   The Unit should take 
appropriate action based on that assessment.  
   
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   12   
   
UNIT COMMENTS 
The Vermont Unit concurred with all three of our recommendations and 
noted that the actions it cited in each of its responses to the 
recommendations had been implemented or were in the process of being 
implemented.   
The Unit concurred with our recommendation to ensure that case files 
contain documentation of supervisory reviews.  The Unit reported that it 
has developed a form for this purpose.  Going forward, the Unit will 
complete this form for each complaint opened for full investigation.  To  
the extent possible, the Unit will also  complete the form retroactively for  
significant investigations  that are currently open. 
The Unit concurred with our recommendation to ensure that all convicted 
individuals are appropriately referred to OIG for program exclusion.  The 
Unit reported that it updated its policies and procedures to reflect the new,  
clarified timetable for reporting convictions, and that it has met with the 
HHS-OIG exclusion officer for New England to discuss the exclusion 
paperwork process.  The Unit will also report convictions to OIG for 
exclusion even when the Unit has only a secondary role in the prosecution 
and an OIG agent is the lead investigator.  
Finally, the Unit concurred with our recommendation to assess the 
adequacy of existing staff levels and take appropriate action based on that 
assessment.  The Unit noted that over the next 6 months, it will assess 
whether staffing levels are (1) commensurate with Vermonts total 
Medicaid program expenditures and (2) sufficient to respond to the 
volume of the Unit's referrals and caseload.  On the basis of this 
assessment, the Unit will then make a recommendation to senior 
management in the Attorney Generals Office. 
The full text of the Units comments is provided in Appendix F.    
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   13   
   
APPENDIX A 
Performance Standards for Medicaid Fraud Control Units (Units) 
[59 Fed. Reg. 49080, Sept. 26, 1994] 
1. 	 A Unit will be in conformance with all applicable statutes, regulations, and policy 
transmittals.  In meeting this standard, the Unit must meet, but is not limited to, the 
following requirements:  
a. 	  The Unit professional staff must consist of permanent employees working 

full-time on Medicaid fraud and patient abuse matters. 

b. 	  The Unit must be separate and distinct from the single State Medicaid agency. 
c. 	  The Unit must have prosecutorial authority or an approved formal procedure for 
referring cases to a prosecutor. 
d. 	  The Unit must submit annual reports, with appropriate certifications, on a timely 
basis.  
e. 	  The Unit must submit quarterly reports on a timely basis. 
f. 	  The Unit must comply with the Americans with Disabilities Act, the Equal 
Employment opportunity requirements, the Drug Free workplace requirements, 
Federal lobbying restrictions, and other such rules that are made conditions of the 
grant. 
2. 	A Unit should maintain staff levels in accordance with staffing allocations 
approved in its budget. In meeting this standard, the following performance 
indicators will be considered: 
a. 	  Does the Unit employ the number of staff that was included in the Units budget 
as approved by [the Office of Inspector General (OIG)]? 
b. 	  Does the Unit employ the number of attorneys, auditors, and investigators that 
were approved in the Units budget? 
c. 	  Does the Unit employ a reasonable size of professional staff in relation to the 
States total Medicaid program expenditures?   
d. 	  Are the Unit office locations established on a rational basis and are such locations 
appropriately staffed? 
3. 	A Unit should establish policies and pr ocedures for its operations, and maintain 
appropriate systems for case management and case tracking.  In meeting this 
standard, the following performance indicators will be considered: 
a. 	  Does the Unit have policy and procedure manuals? 
b. 	  Is an adequate, computerized case management and tracking system in place? 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   14   
   
4. A Unit should take steps to ensure that it maintains an adequate workload 
through referrals from the single State agency and other sources.  In meeting this  
standard, the following performance indicators will be considered:  
a. 	  Does the Unit work with the single State Medicaid agency to ensure adequate 
fraud referrals? 
b.	   Does the Unit work with other agencies to encourage fraud referrals? 
c. 	  Does the Unit generate any of its own fraud cases? 
d.	   Does the Unit ensure that adequate referrals of patient abuse complaints are 
received from all sources? 
5. 	A Units case mix, when possible, should  cover all significant provider types.  In 
meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit seek to have a mix of cases among all types of providers in the 
State? 
b.	   Does the Unit seek to have a mix of Medicaid fraud and Medicaid patient abuse 
cases? 
c. 	  Does the Unit seek to have a mix of cases that reflect the proportion of Medicaid 
expenditures for particular provider groups? 
d.	   Are there any special Unit initiatives targeting specific provider types that affect 
case mix? 
e. 	  Does the Unit consider civil and administrative remedies when appropriate? 
6. 	A Unit should have a continuous case flow, and cases should be completed in a 
reasonable time. In meeting this standard, the following performance indicators will 
be considered:  
a. 	  Is each stage of an investigation and prosecution completed in an appropriate time 
frame? 
b.	   Are supervisors approving the opening and closing of investigations?  
c. 	  Are supervisory reviews conducted periodically and noted in the case file? 
7. 	A Unit should have a process for monitoring the outcome of cases.  In meeting this 
standard, the following performance indicators will be considered:  
a. 	  The number, age, and type of cases in inventory. 
b.	   The number of referrals to other agencies for prosecution.  
c. 	  The number of arrests and indictments. 
d.	   The number of convictions. 
e. 	  The amount of overpayments identified. 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   15   
   
f. 	  The amount of fines and restitution ordered. 
g.	   The amount of civil recoveries. 
h.	   The numbers of administrative sanctions imposed. 
8. 	 A Unit will cooperate with OIG and other Federal agencies, whenever 
appropriate and consistent with its mission, in the investigation and prosecution 
of health care fraud. In meeting this standard, the following performance indicators 
will be considered: 
a. 	  Does the Unit communicate effectively with OIG and other Federal agencies in 
investigating or prosecuting health care fraud in their State? 
b.	   Does the Unit provide OIG regional management, and other Federal agencies, 
where appropriate, with timely information concerning significant actions in all 
cases being pursued by the Unit? 
c. 	  Does the Unit have an effective procedure for referring cases, when appropriate, 
to Federal agencies for investigation and other action?  
d.	   Does the Unit transmit to OIG, for purposes of program exclusions under 
section 1128 of the Social Security Act, reports of convictions, and copies of 
Judgment and Sentence or other acceptable documentation within 30 days or 
other reasonable time period? 
9. 	A Unit should make statutory  or programmatic recommendations, when 
necessary, to the State government. In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Does the Unit recommend amendments to the enforcement provisions of the 
States statutes when necessary and appropriate to do so? 
b. 	  Does the Unit provide program recommendations to single State agency when 
appropriate? 
c. 	  Does the Unit monitor actions taken by State legislature or State Medicaid agency 
in response to recommendations? 
10. 	A Unit should periodically review its memorandum of understanding (MOU) 
with the single State Medicaid agency and seek amendments, as necessary, to 
ensure it reflects current law and practice.  In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Is the MOU more than 5 years old? 
b.	   Does the MOU meet Federal legal requirements? 
c. 	  Does the MOU address cross-training with the fraud detection staff of the State 
Medicaid agency? 
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   16   
   
d. 	  Does the MOU address the Units responsibility to make program  
recommendations to the Medicaid agency and monitor actions taken by the 
Medicaid agency concerning those recommendations? 
11. The Unit Director should exercise proper fiscal control over the Unit resources.  
In meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit Director receive on a timely basis copies of all fiscal and 

administrative reports concerning Unit expenditures from the State parent 

agency? 

b. 	  Does the Unit maintain an equipment inventory?  
c. 	  Does the Unit apply generally accepted accounting principles in its control of Unit 
funding? 
12. A Unit should maintain an annual training plan for all professional disciplines.  
In meeting this standard, the following performance indicators will be considered:  
a. 	  Does the Unit have a training plan in place and funds available to fully implement 
the plan? 
b. 	  Does the Unit have a minimum number of hours training requirement for each 
professional discipline, and does the staff comply with the requirement? 
c. 	  Are continuing education standards met for professional staff? 
d. 	  Does the training undertaken by staff aid in the mission of the Unit?   
   
Vermont State Medicaid Fraud Control Unit: 2013 Onsite Review (OEI-02-13-00360)   17   
   
 
APPENDIX B 
2012 Revised Performance Standards23  
1. 	A unit conforms with all applicable st atutes, regulations, and policy directives, 
including: 
a.  Section 1903(q) of the Social Security Act, containing the basic requirements for 
operation of a MFCU; 
b.  Regulations for operation of a MFCU contained in 42 CFR part 1007; 
c.  Grant administration requirements at 45 CFR part 92 and Federal cost principles at 
2 CFR part 225; 
d.  OIG policy transmittals as maintained on the OIG Web site; and  
e.  Terms and conditions of the notice of the grant award. 
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.  
a. 	  The Unit employs the number of staff that is included in the Units budget 

estimate as approved by OIG. 

b.  The Unit employs 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. 
c.  The Unit employs an appropriate mix and number of attorneys, auditors, 
investigators, and other professional staff that is both commensurate with the 
States total Medicaid program expenditures and that allows 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. 
d.  The Unit employs a number of support staff in relation to its overall size that 
allows the Unit to operate effectively.  
e.  To the extent that a Unit maintains multiple office locations, such locations are 
distributed throughout the State, and are adequately staffed, commensurate with 
the volume of case referrals and workload for each location.  
 
 
23 77 Fed. Reg. 32645, June  1, 2012.   
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  18 
   
   
3. A Unit establishes written policies and procedures for its operations and ensures 
that staff are familiar with, and adhere to, policies and procedures.  
a. 	  The Unit has written guidelines or manuals that contain current policies and 
procedures, consistent with these performance standards, for the investigation and 
(for those Units with prosecutorial authority) prosecution of Medicaid fraud and 
patient abuse and neglect. 
b.  The Unit adheres to current policies and procedures in its operations. 
c.  Procedures include a process for referring cases, when appropriate, to Federal and 
State agencies. Referrals to State agencies, including the State Medicaid agency, 
should identify whether further investigation or other administrative action is 
warranted, such as the collection of overpayments or suspension of payments. 
d.  Written guidelines and manuals are readily available to all Unit staff, either online 
or in hard copy. 
e.  Policies and procedures address training standards for Unit employees. 
4. A Unit takes steps to maintain an adequate volume and quality of referrals from 
the State Medicaid agency and other sources.  
a. 	  The Unit takes steps, such as the development of operational protocols, to ensure 
that the State Medicaid agency, managed care organizations, and other agencies 
refer to the Unit all suspected provider fraud cases. Consistent with 42 CFR 
1007.9(g), the Unit provides timely written notice to the State Medicaid agency 
when referred cases are accepted or declined for investigation.  
b.  The Unit provides periodic feedback to the State Medicaid agency and other 
referral sources on the adequacy of both the volume and quality of its referrals.  
c.  The Unit provides timely information to the State Medicaid or other agency when 
the Medicaid or other agency requests information on the status of MFCU 
investigations, including when the Medicaid agency requests quarterly certification 
pursuant to 42 CFR 455.23(d)(3)(ii). 
d.  For those States in which the Unit has original jurisdiction to investigate or 
prosecute patient abuse and neglect cases, the Unit takes steps, such as the 
development of operational protocols, to ensure that pertinent agencies refer such 
cases to the Unit, consistent with patient confidentiality and consent.  Pertinent 
agencies vary by State but may include licensing and certification agencies, the 
State Long Term Care Ombudsman, and adult protective services offices. 
e.  The Unit provides timely information, when requested, to those agencies identified 
in (D) above regarding the status of referrals. 
f.   The Unit takes steps, through public outreach or other means, to encourage the 
public to refer cases to the Unit.  
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  19 
   
   
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. 
a. 	  Each stage of an investigation and prosecution is completed in an appropriate 
timeframe. 
b.  Supervisors approve the opening and closing of all investigations and review the 
progress of cases and take action as necessary to ensure that each stage of an 
investigation and prosecution is completed in an appropriate timeframe. 
c.  Delays to investigations and prosecutions are limited to situations imposed by 
resource constraints or other exigencies. 
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.  
a. 	  The Unit seeks to have a mix of cases from all significant provider types in the 
State.  
b.  For those States that rely substantially on managed care entities for the provision 
of Medicaid services, the Unit includes a commensurate number of managed care 
cases in its mix of cases. 
c.  The Unit seeks to allocate resources among provider types based on levels of 
Medicaid expenditures or other risk factors.  Special Unit initiatives may focus on 
specific provider types.  
d.  As part of its case mix, the Unit maintains a balance of fraud and patient abuse and 
neglect cases for those States in which the Unit has original jurisdiction to 
investigate or prosecute patient abuse and neglect cases. 
e.  As part of its case mix, the Unit seeks to maintain, consistent with its legal 

authorities, a balance of criminal and civil fraud cases. 
 
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. 
a. 	  Reviews by supervisors are conducted periodically, consistent with MFCU 
policies and procedures, and are noted in the case file.  
b.  Case files include all relevant facts and information and justify the opening and 
closing of the cases.  
c.  Significant documents, such as charging documents and settlement agreements, are 
included in the file.  
d.  Interview summaries are written promptly, as defined by the Units policies and 
procedures. 
e.  The Unit has an information management system that manages and tracks case 
information from initiation to resolution. 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  20 
   
   
f.   The Unit has an information management system that allows for the monitoring 
and reporting of case information, including the following: 
1. 	  The number of cases opened and closed and the reason that cases are closed. 
2. 	  The length of time taken to determine whether to open a case referred by the 
State Medicaid agency or other referring source. 
3. 	  The number, age, and types of cases in the Units inventory/docket. 
4. 	  The number of referrals received by the Unit and the number of referrals by 
the Unit to other agencies. 
5. 	  The dollar amount of overpayments identified. 
6. 	  The number of cases criminally prosecuted by the Unit or referred to others 
for prosecution, the number of individuals or entities charged, and the number 
of pending prosecutions. 
7. 	  The number of criminal convictions and the number of civil judgments. 
8. 	  The dollar amount of fines, penalties, and restitution ordered in a criminal 
case and the dollar amount of recoveries and the types of relief obtained 
through civil judgments or prefiling settlements. 
8. A Unit cooperates with OIG and other Federal agencies in the investigation and 
prosecution of Medicaid and other health care fraud.  
a. 	  The Unit communicates on a regular basis with OIG and other Federal agencies 
investigating or prosecuting health care fraud in the State.  
b.  The Unit cooperates and, as appropriate, coordinates with OIGs Office of  
Investigations and other Federal agencies on cases being pursued jointly, cases 
involving the same suspects or allegations, and cases that have been referred to the 
Unit by OIG or another Federal agency. 
c.  The Unit makes available, to the extent authorized by law and upon request by 
Federal investigators and prosecutors, all information in its possession concerning 
provider fraud or fraud in the administration of the Medicaid program. 
d.  For cases that require the granting of extended jurisdiction to investigate 
Medicare or other Federal health care fraud, the Unit seeks permission from OIG 
or other relevant agencies under procedures as set by those agencies. 
e.  For cases that have civil fraud potential, the Unit investigates and prosecutes such 
cases under State authority or refers such cases to OIG or the U.S. Department of 
Justice.  
f.   The Unit transmits to OIG, for purposes of program exclusions under section 1128 
of the Social Security Act, all pertinent information on MFCU convictions within 
30 days of sentencing, including charging documents, plea agreements, and 
sentencing orders. 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  21 
   
   
g.  The Unit reports qualifying cases to the Healthcare Integrity & Protection 

Databank, the National Practitioner Data Bank, or successor data bases. 
 
9.  A Unit makes statutory or programmatic recommendations, when warranted, to 
the State government.  
a. 	  The Unit, when warranted and appropriate, makes statutory recommendations to 
the State legislature to improve the operation of the Unit, including amendments 
to the enforcement provisions of the State code.  
b.  The Unit, when warranted and appropriate, makes other regulatory or 
administrative recommendations regarding program integrity issues to the State 
Medicaid agency and to other agencies responsible for Medicaid operations or 
funding. The Unit monitors actions taken by the State legislature and the State 
Medicaid or other agencies in response to recommendations. 
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.  
a. 	  The MFCU documents that it has reviewed the MOU at least every 5 years, and 
has renegotiated the MOU as necessary, to ensure that it reflects current practice, 
policy, and legal requirements. 
b.  The MOU meets current Federal legal requirements as contained in law or 
regulation, including 42 CFR 455.21, Cooperation with State Medicaid fraud 
control units, and 42 CFR 455.23, Suspension of payments in cases of fraud. 
c.  The MOU is consistent with current Federal and State policy, including any 
policies issued by OIG or the Centers for Medicare & Medicaid Services (CMS). 
d.  Consistent with performance standard 4, the MOU establishes a process to ensure 
the receipt of an adequate volume and quality of referrals to the Unit from the State 
Medicaid agency. 
e.  The MOU incorporates by reference the CMS performance standard for Referrals 
of Suspected Fraud from a State Agency to a Medicaid Fraud Control Unit. 
11. 	A Unit exercises proper fiscal  control over Unit resources.  
a. 	  The Unit promptly submits to OIG its preliminary budget estimates, proposed 
budget, and Federal financial expenditure reports. 
b.  The Unit maintains an equipment inventory that is updated regularly to reflect all 
property under the Units control. 
c.  The Unit maintains an effective time and attendance system and personnel activity 
records.  
d.  The Unit applies generally accepted accounting principles in its control of Unit 
funding. 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  22 
   
   
e.  The Unit employs a financial system in compliance with the standards for financial 
management systems contained in 45 CFR 92.20. 
12. 	A Unit conducts training that  aids in the mission of the Unit. 
a. 	  The Unit maintains a training plan for each professional discipline that includes 
an annual minimum number of training hours and that is at least as stringent as 
required for professional certification. 
b.  The Unit ensures that professional staff comply with their training plans and 
maintain records of their staffs compliance.  
c.  Professional certifications are maintained for all staff, including those that fulfill 
continuing education requirements. 
d.  The Unit participates in MFCU related training, including training offered by OIG 
and other MFCUs, as such training is available and as funding permits. 
e.  The Unit participates in cross training with the fraud detection staff of the State 
Medicaid agency. As part of such training, Unit staff provide training on the 
elements of successful fraud referrals  and receive training on the role and 
responsibilities of the State Medicaid agency. 
 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  23 
   
   
APPENDIX C 
Referrals of Patient Abuse and Neglect, Provider Fraud, and Theft of 
Patient Funds to the Vermont Unit by Source, Fiscal Years 2010 through 
2012 
Table C-1: Total Referrals of Patient Abuse and Neglect, Provider Fraud, and Theft of 
Patient Funds to the Unit and Annual Average Referrals  
 
Fiscal Year (FY)   3-Year  Annual  
Case Type   FY 2011   FY 2012  
2010   Total   Average 
Provider Fraud   84  53  87  224  75 
Patient Abuse and Neglect  113  53  75  241  80 
Theft of Patient Funds  25  14  30  69  23 
Total    222  120  192  534  178 
Source: OIG analysis of Unit data, 2013.  
 
Table C-2: Unit Referrals, by Referral Source 
 
 
  FY 2010   FY 2011   FY 2012    
Theft  
Abuse  Theft of   Abuse  Abuse  Theft of   Percentage 
of 
Fraud   and  Patient  Fraud   and  Fraud   and  Patient  Total   of All 
Patient 
Neglect   Funds   Neglect   Neglect   Funds   Referrals  
Referral Source   Funds  
Medicaid Agency 
 Program  23  4.3%  
Integrity Unit  5  0  0  3  0  0  15  0  0 
Medicaid Agency 
2  0.4%  
 Other   1  0  0  0  0  0  1  0  0 
State Survey / 
256  47.9%  
Certification  13  92  18  5  30  5  6  64  23 
State Agencies  
15  2.8%  
Other  2  1  1  0  0  0  9  2  0 
Licensing Board  7  3  0  3  4  1  1  0  0  19  3.6%  
Law  
6  1.1%  
Enforcement  1  0  0  1  2  0  0  2  0 
OIG  1  1  1  0  1  0  2  0  0  6  1.1%  
Prosecutor  15  1  0  14  1  0  16  0  0  47  8.8%  
Provider  2  0  1  4  2  1  9  1  0  20  3.8%  
Provider 
18  3.4%  
Association  10  0  0  0  0  0  8  0  0 
Private Health  0  0.0%  
Insurer  0  0  0  0  0  0  0  0  0 
1  0.2%  
Ombudsman  0  1  0  0  0  0  0  0  0 
Adult Protective 
41  7.7%  
Services  8  8  1  5  10  3  4  0  2 
Private Citizen  14  4  2  12  2  3  12  5  2  56  10.5%  
Unit Hotline  0  0  0  0  0  0  0  0  0  0  0.0%  
Other   5  2  1  6  1  1  4  1  3  24  4.5%  
Total   84  113  25  53  53  14  87  75  30  534  100.0%  
Annual Total  222  120  192     
Source: OIG analysis of Unit data, 2013.  
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  24
   
   
APPENDIX D 
Cases Opened and Closed by Provider Category and Case Type, Fiscal 
Years 2010 through 2012 
Table D-1: Total Annual Opened and Closed Cases, by Case Type  
 
Fiscal Year  3-Year  Annual  
Case Type   FY 2011   FY 2012  
(FY) 2010   Total   Average 
Opened   83  49  59  191  64 
Provider Fraud   54  32  45  131  44 
Patient Abuse and Neglect  29  17  11  57  19 
Theft of Patient Funds  0  0  3  3  1 
                 
Closed  76  29  70  175  58 
Provider Fraud   54  16  51  121  40 
Patient Abuse and Neglect  21  13  18  52  17 
Theft of Patient Funds  1  0  1  2  1 
Source: OIG analysis of Unit data, 2013.  
 
 
 
Table D-2: Outcomes for Closed Cases, by Case Type  
 
Closed by   Closed by Civil  Closed due to  
Closed by Referral 
Prosecution   Action  Insufficient evidence  
Type of  FY  FY  FY  FY  FY  FY  FY  FY  FY  FY  FY  FY 
Investigations   2010   2011   2012   2010   2011   2012   2010   2011   2012   2010   2011   2012  
Investigations of 
3  3  7  12  9  17  38  1  24  1  3  3 
Fraud  
Investigations of 
Patient Abuse and  0  1  2  0  0  0  21  11  16  0  1  1 
Neglect 
Investigation of 
Theft of Patient  1  0  0  0  0  0  0  0  1  0  0  0 
Funds  
Total  
4  4  9  12  9  17  59  12  41  1  4  4 
Investigations  
Source: OIG analysis of Unit data, 2013.  
 
 
   
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  25 
   
   
Table D-3: Provider Fraud Cases Opened and Closed, by Provider Type  
 
Provider Type   FY 2010   FY 2011   FY 2012  
Facilities   Opened  Closed  Opened  Closed  Opened  Closed 
Hospitals  0  1  3  1  0  3 
Nursing Facilities   3  1  0  1  5  2 
Other Long-Term  Care Facilities   0  0  0  0  0  0 
Substance Abuse Treatment Centers   0  0  0  0  0  0 
Other  Facilities   2  3  0  0  3  0 
Practitioners   Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of Medicine or Osteopathy   2  5  2  0  2  0 
Dentists  1  1  0  0  0  0 
Podiatrists  0  0  0  0  0  0 
Optometrist/Opticians  0  0  0  0  0  0 
Counselors/Psychologists  3  3  3   0  1  5 
Chiropractors  0  0  0  0  0  0 
Other Practitioners  1  0  1  0  0  0 
Medical Support  Opened  Closed  Opened  Closed  Opened  Closed 
Pharmacies  0  0  4  0  4  2 
Pharmaceutical Manufacturers  10  9  8  7  6  11 
Durable Medical Equipment and/or  
Suppliers  2  1  0  1  2  2 
Laboratories  1  1  0  0  0  0 
Transportation Services  1  0  1  0  2  2 
Home Health Care Agencies  0  0  2  0  1  1 
Home Health Care Aides  25  22  7  5  17  21 
Nurses/Physician Assistants/  
Nurse Practitioners/Certified Nurse Aides 
2  2  0  1  0  1 
Radiologists  0  0  0  0  0  0 
Other Medical Support   0  2  0  0  0  0 
Program Related  Opened  Closed  Opened  Closed  Opened  Closed 
Managed Care   0  0  0  0  0  0 
Medicaid Program  Administration  0  0  0  0  0  0 
Billing Company  0  0  0  0  0  0 
Other Program Related  1  3  1  0  2  1 
Total   54  54  32  16  45  51 
Source: OIG analysis of Unit data, 2013.  
 
 
   
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  26 
   
   
Table D-4: Cases of Patient Abuse and Neglect Opened and Closed, by Provider Type 
 
 
Provider Type  FY 2010   FY 2011   FY 2012  
   Opene 
Closed  Opened   Closed  Opened   Closed 
d 
Nursing Facilities   7  3  7  3  3  7 
Other Long-Term  
0  0  0  0  1  1 
Care  
Nurses/Physician 
Assistants/  
Nurse Practitioners/  9  8  4  5  3  5 
Certified Nurse 
Aides 
Home Health Aides  3  2  2  1  3  3 
Other   10  8  4  4  1  2 
Total    29  21  17  13  11  18 
Source: OIG analysis of Unit data, 2013  
 
 
 
 
Table D-5: Cases of Theft of Patient Funds Opened and Closed, by Provider Type  
 
 
Provider Type  FY 2010   FY 2011   FY 2012  
        
Opened  Closed  Opened  Closed  Opened  Closed 
Non-Direct Care   0  0  0  0  0  0 
Nurses/Physician 
Assistants/Nurse  
Practitioners/  0  1  0  0  0  0 
Certified Nurse 
Aides 
Home Health Aide   0  0  0  0  0  0 
Other   0  0  0  0  3  1 
Total    0  1  0  0  3  1 
Source: OIG analysis of Unit data, 2013  
 
 
 
 
 
   
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  27 
   
   
APPENDIX E 
Confidence Intervals for Estimates 
 
Table E-1:  Confidence Intervals for Key Data from Case File Review  
 
Estimate Description   Sample Size  Point Estimate  95-Percent 
Confidence Interval 
Case Files With Opening Documents  100  89.0%   82.993.1%  
Case Files With Closing Documents  70  95.8%   89.898.3%  
Case Files With No Documentation Indicating 
at Least One Supervisory Review (Does Not  75  96.0%   90.398.4%  
Include Global Cases) 
    
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  28 
   
   
APPENDIX F 
Unit Comments 
 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  29 
   
   
   
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  30 
  Conclusion 
The Vermont MFCU appreciates the efforts ofthe HHS-010 and the consultations 
provided by the Onsite Review.  We remain committed to meeting and exceeding the standards 
for Medicaid Fraud Control Units consistent with our mission, and look forward to implementing 
the courses of action discussed above. 
Sincerely, 
Edward A. Baker 
Assistant Attorney General 
Director, MFRAU 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  31   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New  York regional 
office, and Nancy Harrison and Meridith Seife, Deputy Regional 
Inspectors General.  
Vincent Greiber served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the New York regional office who 
conducted the study include Jennifer Karr.  Central office staff who 
provided support include Susan Burbach, Kevin Farber, Christine Moritz, 
and Sherri Weinstein.  Office of Investigations staff who provided support 
include Michael Robinson. 
 
Vermont State Medicaid Fraud Control Unit:  2013 Onsite Review (OEI-02-13-00360)  32 
   
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.