f  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
A Message From Joanne M. Chiedi, Acting 
Inspector General 
I am pleased to submit this Semiannual Report to Congress 
summarizing the activities of the Department of Health and 
Human Services (HHS) Office of Inspector General (OIG) for 
the 6-month period ending on September 30, 2019. 
In this reporting period, OIG continued to produce 
outstanding results for the American people through 
independent, objective oversight.  OIGs work safeguarded 
taxpayer funds and helped improve the quality, safety, and 
value of HHS programs.  For example, our work included a 
first-of-its-kind investigation of a major genetic testing fraud 
scheme and a report on challenges meeting the mental 
health needs of unaccompanied children in HHS custody.  
We furthered our work on combating the devastating opioid 
epidemic and helped dismantle a massive healthcare fraud 
scheme involving fraudulent telemedicine companies with 
over $1.2 billion in losses for medically unnecessary orthotic 
braces.  We made a range of recommendations to improve program operations in areas such as 
reporting and preventing elder abuse, recovery of overpayments, state oversight of Medicaid, 
monitoring of independent living programs, and quality of care in Indian Health Service hospitals.  
Touching on the breadth of our work in the reporting period, we provided testimony at six 
congressional hearings that addressed the Unaccompanied Alien Children Program, elder justice, 
prescription drug prices, and foreign threats to taxpayer-funded medical research.  In short, OIG 
continued its enterprise-wide oversight of HHSs over $1 trillion portfolio and its bold pursuit of those 
who cheat HHS programs or harm HHS beneficiaries. 
OIGs talented and dedicated workforce uses multidisciplinary approaches, cutting-edge data and 
technology, and collaborations at the Federal, State, and local levels to achieve our mission.  OIG is 
preparing to oversee emerging technology-enriched, value-driven health and human services programs 
with investments in the expertise of our people, as well as proven technologies and data capabilities.  
Our work demonstrates that promising technology that can help patients, such as genetic testing, can 
also be misused for fraud and put patients at risk.  At this transformational time in healthcare, OIG will 
be vigilant and innovative in advancing program integrity.  Currently, OIG is collecting public comments 
on a proposed rule designed to accelerate the transformation of the healthcare system into one that 
better pays for value and promotes care coordination for patients.  
OIG is ready to address complex, fast-moving changes in health and human services programs with 
consistent, assertive, objective, and fearless oversight.  With an eye on the future and a steady focus on 
the people served by HHS, OIG will continue to be resolute in catching and holding accountable 
perpetrators of fraud, identifying misspent funds, and making systemic recommendations to promote 
the economy, efficiency, and effectiveness of the Nations health and human services programs.   
 
OIG appreciates the support of Congress and HHS for this important work.  
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
Table of Contents 
OIGs Approach to Driving Positive Change  1 
Highlights of OIG Accomplishments  4 
OIG Participation in Congressional Hearings  13 
Selected Acronyms and Abbreviations  14 
Medicare and Medicaid Reports and Reviews  15 
Legal and Investigative Activities Related to Medicare and Medicaid  40 
Public Health and Human Service Agency Reports and Reviews  58 
Legal and Investigative Activities Related to Public Health and Human Service Agencies  72 
Other HHS-Related Reviews and Investigative Activities  74 
Appendix A: Questioned Costs and Funds To Be Put to Better Use  79 
Appendix B: Savings Decisions Supported by OIG Recommendations  84 
Appendix C: Peer-Review Results  87 
Appendix D: Summary of Sanction Authorities  89 
Appendix E: Reporting Requirements in the Inspector General Act of 1978  92 
Appendix F: Reporting Requirements in the Inspector General Empowerment Act of 2016  95 
Appendix G: Anti-Kickback StatuteSafe Harbors  102 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
OIGs Approach to Driving Positive Change 
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) Office of Inspector General (OIG) provides 
independent and objective oversight that promotes economy, efficiency, and effectiveness in HHS 
programs and operations.  OIGs program integrity and oversight activities are shaped by legislative and 
budgetary requirements and adhere to professional standards established by the Government 
Accountability Office (GAO), the Department of Justice (DOJ), and the Inspector General community.  
Through a nation-wide network of audits, investigations, and evaluations, OIG carries out its mission to 
protect the integrity of HHS programs and the health and welfare of the people served by those programs.  
OIGs work is conducted by three operating componentsthe Office of Audit Services (OAS), the Office of 
Evaluation and Inspections (OEI), and the Office of Investigations (OI)with assistance from the Office of 
Counsel to the Inspector General (OCIG) and Mission Support and Infrastructure (MSI).  
 
OIG Organization 
Office of Audit Services 
OAS conducts audits of HHS programs and operations through its own resources or by overseeing 
audit work done by others.  Audits examine the performance of HHS programs and/or of HHSs 
grantees and contractors in carrying out their respective responsibilities and provide independent 
assessments of HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote the economy, efficiency, and effectiveness of programs and 
operations throughout HHS. 
 
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, 
and abuse and promoting economy, efficiency, and effectiveness in HHS programs.  OEI reports 
also present practical recommendations for improving program operations. 
 
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 almost every State, the 
District of Columbia, and Puerto Rico, OI coordinates with DOJ and other Federal, State, and local 
law enforcement authorities.  OI also coordinates with OAS and OEI when audits and evaluations 
uncover potential fraud.  OIs investigative efforts often lead to criminal convictions, administrative 
sanctions, or civil monetary penalties (CMPs). 
 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Office of Counsel to the Inspector General 
OCIG provides 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 the False Claims 
Act (FCA), program exclusion, self-disclosure, and CMP cases.  In connection with these cases, 
OCIG also negotiates and monitors corporate integrity agreements (CIAs).  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the healthcare industry about the anti-kickback statute and other OIG enforcement 
authorities.   
 
Mission Support and Infrastructure 
MSI is composed of the Immediate Office of the Inspector General and the Office of Management 
and Policy.  MSI is responsible for coordinating OIG activities and providing mission support, 
including setting vision and direction for OIGs priorities and strategic planning; ensuring effective 
management of budget, finance, human resource management, and other operations; and serving 
as a liaison with HHS, Congress, and other stakeholders.  MSI plans, conducts, and participates in a 
variety of cooperative projects within HHS and with other Government agencies.  MSI provides 
critical data analytics, data management, and information technology (IT) infrastructure that 
enables OIG components to conduct their work efficiently and effectively.  
 
OIG Strategic Publications
 
OIG Work Plan 
OIGs Work Plan sets forth various projects that OIG plans to undertake during the fiscal year (FY) 
and beyond.  Projects listed in the Work Plan span HHSs operating divisions (OpDivs), which 
include the Centers for Medicare & Medicaid Services (CMS); public health agencies such as the 
Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH); and 
human services agencies such as the Administration for Children and Families (ACF) and the 
Administration for Community Living (ACL).  The Work Plan also includes oversight of State and 
local governments use of Federal funds as well as the administration of HHS.  Some of the projects 
described in the Work Plan are statutorily required. 
 
OIGs Top Recommendations 
OIG drives positive change by not only identifying risks, problems, abuses, and deficiencies, but 
also recommending solutions to address them.  OIG maintains a list of recommendations it has 
made to address vulnerabilities detected in its reviews, and it keeps track of whether these 
recommendations have been implemented.  OIG systematically follows up on its recommendations 
with the relevant HHS programs.  From among the recommendations that have not been 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
implemented, OIG identifies the top recommendations that, if implemented, are likely to garner 
significant savings and improvements in quality, efficiency, and effectiveness.  OIG compiles these 
recommendations in the Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations (previously known as the Compendium of Unimplemented Recommendations). 
 
OIGs Semiannual Report to Congress  
OIGs Semiannual Report(s) to Congress (Semiannual Reports) describe OIGs work on identifying 
significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the 
administration of HHS programs and operations that were disclosed during the reporting period.  
In the report below, we present OIG expected recoveries, criminal and civil actions, and other 
statistics as a result of our work for the entire FY 2019.  We also highlight some of our work 
completed during this semiannual reporting period, April 1, 2019, through September 30, 2019.  
 
Top Management and Performance Challenges Facing HHS 
To focus HHSs attention on the most pressing issues, each year OIG identifies the Top 
Management and Performance Challenges facing HHS.  These top challenges arise across HHS 
programs and cover critical HHS responsibilities, including delivering quality services and benefits, 
exercising sound fiscal management, safeguarding public health and safety, and enhancing 
cybersecurity. 
 
 
 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Highlights of OIG Accomplishments 
HHS-OIGS SEMIANNUAL REPORT TO CONGRESS (Semiannual Report) describes OIGs work identifying 
significant risks, problems, abuses, deficiencies, remedies, and investigative outcomes relating to the 
administration of HHS programs and operations that were disclosed during the semiannual reporting 
period, April 1, 2019, through September 30, 2019.  In this highlights section, we present data on OIG 
reports issued, expected recoveries, criminal and civil actions, and other statistics resulting from our work 
for both the semiannual reporting period and the entirety of fiscal year (FY) 2019.  We then highlight 
significant results from selected audits, evaluations, and enforcement activities completed during the 
reporting period. 
 
Fiscal Year 2019 At-a-Glance Highlights 
Statistic  FY 2019 
(10/1/20189/30/2019) 
Audit Reports Issued  163 
Evaluations Issued  46 
Expected Audit Recoveries  $819,151,000 
Questioned Costs  $913,475,000 
Potential Savings  $836,422,000 
New Audit and Evaluation  582 
Recommendations 
Recommendations Implemented by  341 
HHS Operating Divisions 
Expected Investigative Recoveries  $5.04 billion 
Criminal Actions  809 
Civil Actions  695 
Exclusions  2,640 
 
Results for the Semiannual Reporting Period 
During this semiannual reporting period (April through September 2019), we issued 91 audit reports and 36 
evaluation reports.  Our audit work identified $322,724,000 in expected recoveries, as well as $666,549,000 
in questioned costs (costs questioned by OIG because of an alleged violation, costs not supported by 
adequate documentation, or the expenditure of funds where the intended purpose is unnecessary or 
unreasonable).  Our audit work also identified $573,037,000 in potential savings for HHSfunds that could 
be saved if HHS implemented all of OIGs audit recommendations.  During this reporting period, OIG 
made 367 new audit and evaluation recommendations, which are crucial to encourage positive change in 
HHS programs.  Meanwhile, HHS operating divisions implemented 142 prior recommendations, leading to 
positive impact for HHS programs and beneficiaries. 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
OIG also remains at the forefront of the Nations efforts to fight fraud in HHS programs and hold 
wrongdoers accountable for their actions.  Along with our partners DOJ, State Medicaid Fraud Control 
Units (MFCUs or Units), and other Federal, State, and local law enforcement agencies, we detect, 
investigate, and prosecute fraud through a coordinated and data-driven approach.  OIGs investigative 
work led to $2.74 billion in expected investigative recoveries and 388 criminal actions during this reporting 
period.  OIG also took civil actions, such as assessing monetary penalties, against 364 individuals and 
entities, and excluded 1,347 individuals and entities from Federal health care programs. 
 
OIG continues to focus on the most significant and high-risk issues in healthcare and human services.  Our 
mission is to protect the health and welfare of beneficiaries and to protect the integrity of HHS programs.  
Below we highlight results from selected OIG oversight and enforcement activities from the semiannual 
reporting period April 1, 2019, through September 30, 2019, organized by subject area.  A comprehensive 
list of OIG work during the reporting period follows, and Appendices AF provide data to meet the 
reporting requirements in the Inspector General Act of 1978 (IG Act). 
 
Protecting Unaccompanied Children in the Departments Care 
HHS, through the ACF Office of Refugee Resettlement (ORR), is responsible for ensuring the shelter and 
care of thousands of unaccompanied alien children (UAC) who enter the United States without legal status.  
Most of these children were transferred into ORRs custody after initially being taken into custody at the 
border by the Department of Homeland Security (DHS), including children who arrived in the United States 
unaccompanied and those who were separated from their parents or legal guardians by DHS.  ORR 
provides temporary shelter, care, and other related services to children before they are released to 
sponsors (most often, family members).  OIG has devoted substantial efforts to protect the health and 
safety of children in ORR custody.  Significant OIG work during this semiannual reporting period related to 
ORR includes the following: 
 
OIG found that ORRs care provider facilities faced challenges in addressing the mental health needs of 
children.  ORR facilities reported several challenges in addressing childrens mental health needs, especially 
for children who have experienced significant trauma.  Facility staff described challenges such as difficulty 
recruiting and retaining clinicians and resulting high caseloads, trouble accessing external mental health 
care providers, and difficulty transferring children to facilities within ORR's network that provide specialized 
treatment.  Policy changes in 2018 exacerbated these concerns, as they resulted in a rapid increase in the 
number of children separated from their parents after entering the United States, many of whom were 
younger, and longer stays in ORR custody.  ACF agreed with OIGs recommendations for practical steps 
that ORR can take to assist facilities care for children and minimize barriers to appropriate mental health 
treatment.  (See report OEI-09-18-00431.) 
 
OIG found that ORRs care provider facilities faced challenges in hiring, screening, and retaining 
employees.  In general, facilities met a range of background checks and qualification requirements 
designed to keep individuals who may pose a risk to the safety and well-being of children from having 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
direct access to children.  However, some facilities did not have evidence of the required background 
check results, and over half of the facilities we reviewed allowed employees to begin employment before 
receiving background check results.  In addition, facilities had difficulty maintaining required staffing ratios 
because of challenges experienced in screening, hiring, and retaining qualified employees.  ACF agreed to 
OIGs several recommendations to improve ORR program operations related to background checks, 
education requirements, and staffing ratios.  (See report A-12-19-20001.) 
 
OIG found that one of ORRs largest grantees did not adequately protect childrens information and did 
not always document meeting safety standards for the care and release of children.  Southwest Key, which 
operates multiple care provider facilities for unaccompanied children in ORRs custody, had not 
implemented an adequate information systems security program to protect the personally identifiable 
information of children in its care as required by Federal regulations.  OIG also found that Southwest Key 
did not always meet or properly document that it met certain safety standards for the care or release of 
some children in its custody.  Without adequate documentation, ORR could not be assured that Southwest 
Key had followed ORR policies regarding background checks, prompt care, or that DHS was notified about 
the childs release to a sponsor.  OIG made a number of recommendations to Southwest Key to address 
these issues.  (See reports A-18-18-06001 and A-06-17-07005.) 
 
OIG testified about ORR oversight work at two congressional hearings.  In September, Ann Maxwell, 
Assistant Inspector General for Evaluation and Inspections, testified at two congressional hearings.  Once 
before the House Committee on Appropriations and again before the House Committee on Energy and 
Commerce, Oversight and Investigations Subcommittee.  Both testimonies focused on OIGs oversight of 
the Unaccompanied Alien Children (UAC) Program.  (See OIG congressional testimony.) 
 
Preventing Opioid Misuse and Promoting Access to Treatment 
OIG has an extensive history of work focused on the national opioid epidemic, and we continued to 
expand that body of work through our investigations, evaluations, and audits during this reporting period.   
As advanced data analytics allow us to assess broad usage patterns and detect potential problems with 
increasing sophistication, we have worked to ensure that HHS program data are of sufficient quality to 
realize the full potential of those capabilities.  Additionally, we have expanded our work related to 
treatment of substance use disorderto ensure appropriate access for beneficiaries and to prevent fraud, 
waste, or misuse of funding for treatment.  Significant OIG work during this semiannual reporting period 
includes the following: 
 
Over 50 individuals in Texas, including medical professionals, were charged with illegally diverting 
prescription opioids through pill mill clinics.  In September 2019, OIG and Federal and State law 
enforcement partners announced an enforcement operation across Texas, involving charges against a total 
of 58 individuals across all four Federal districts for their alleged involvement in fraud schemes and 
networks of pill mill clinics resulting in $66 million in losses to public and private insurers and 6.2 million 
pills.  Of those charged, 16 were doctors or medical professionals, and 20 were charged for their role in 
diverting opioids.  This operation exemplifies OIGs continued targeting of schemes to bill Medicare, 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Medicaid, and other public and private insurers for medically unnecessary prescription drugs and 
compounded medications that often are never even purchased and/or distributed to beneficiaries.  The 
operation also reflects OIGs aggressive pursuit of individuals contributing to the opioid epidemic, with a 
particular focus on medical professionals allegedly involved in the unlawful distribution of opioids and 
other prescription narcotics. 
 
A pharmaceutical company agreed to pay $700 million to settle allegations that it illegally marketed an 
opioid treatment drug.  A pharmaceutical company entered into a $700 million FCA settlement with the 
United States to resolve allegations that it illegally marketed and promoted the opioid treatment drug 
Suboxone.  The allegations included knowing promotion of Suboxone to physicians who were prescribing 
it in an unsafe manner, as well as making false and misleading claims to physicians, State Medicaid 
agencies, and the Food and Drug Administration to increase sales and delay generic competition. 
 
OIG found that opioid use has declined in Medicare Part D while use of opioid treatment drugs has 
increased.  OIGs most recent national data brief on opioid use in Medicares Part D program showed 
decreases in both the number of beneficiaries receiving opioids and the number of beneficiaries at serious 
risk of opioid misuse or overdose.  At the same time, the number of beneficiaries receiving drugs for 
medication-assisted treatment of opioid use disorder and the number of beneficiaries receiving naloxone 
(a drug that can reverse the effects of an opioid overdose) grew.  (See report OEI-02-19-00390.) 
 
OIG found that incomplete Medicaid data prevent a national review of opioid prescribing.  Although the 
Department has made progress in building a single, nation-wide Medicaid dataset, we found that the 
dataset cannot yet be used to conduct a nation-wide analysis of opioid use and prescribing patterns in 
Medicaid.  This type of review is essential to identifying patterns and linkages that might not be 
discernable from analysis of individual States Medicaid data.  CMS agreed with our recommendations to 
help ensure the identification of at-risk beneficiaries and providers who may be overprescribing.  (See 
report OEI-05-18-00480.) 
 
OIG found that Indian Health Service (IHS) hospitals did not always follow protocols for prescribing and 
dispensing opioids.  OIGs patient record review for five IHS hospitals found that they did not always take 
actions as required or recommendedsuch as reviewing patients health records or treatment histories 
and performing urine drug screens within specified timeframeswhen prescribing and dispensing opioids.  
OIG also found that the IHS hospitals reviewed did not fully use their States prescription drug monitoring 
programs.  IHS agreed with our recommendations to help ensure that it follows the Indian Health Manual 
when prescribing and dispensing opioids and other vulnerabilities identified in the report.  (See report 
A-18-17-11400.) 
 
Fighting Fraud To Protect the Medicare and Medicaid Programs 
Medicare and Medicaid are among the largest Federal programs in the United States, both in terms of 
expenditures and individuals served.  In 2018, Medicare spent nearly $741 billion, and provided health 
coverage to 59.9 million beneficiaries.  The Medicaid program serves more people than any other Federal 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
health care program.  One in five Americansapproximately 73 million peoplereceive care through 
Medicaid at a cost of $560 billion per year. 
 
OIGs sustained efforts to root out illegal activity that can unnecessarily raise costs for the Medicare and 
Medicaid programs or put beneficiaries at risk is as important as ever.  Significant OIG work during this 
semiannual reporting period includes the following: 
 
OIG helped shut down a vast fraud scheme involving telemedicine and orthotic braces.  In April 2019, OIG 
and our law enforcement partners announced an investigation (known as Operation Brace Yourself) that 
dismantled a healthcare fraud scheme involving over $1.2 billion in losses.  In the alleged scheme, medical 
professionals working with fraudulent telemedicine companies received illegal kickbacks and bribes from 
medical equipment companies.  In exchange, the medical equipment companies obtained prescriptions for 
medically unnecessary orthotic braces and used them to fraudulently bill Medicare.  The operation led to 
charges against 24 defendants across 17 Federal districts. 
 
OIG helped lead a multidistrict takedown targeting a massive genetic testing fraud scheme.  In September 
2019, OIG and Federal and State law enforcement partners announced efforts to dismantle one of the 
largest healthcare fraud schemes ever charged.  The takedown resulted in charges in 5 Federal districts 
against 35 defendantsincluding 9 doctorsassociated with dozens of telemedicine companies and 
laboratories.  The defendants are charged with fraudulently billing Medicare more than $2.1 billion for 
cancer-related genetic tests as part of a scheme involving payment of illegal kickbacks and bribes.  
 
Two Florida residents were convicted in the largest healthcare fraud scheme ever charged by Federal 
authorities.  The fraud scheme involved a record $1.3 billion in fraudulent claims.  According to the 
investigation, the leader of the scheme bribed physicians to admit patients into care facilities he owned, 
and then cycled the patients through facilities in his network.  In addition to billing Medicare and Medicaid 
for services and prescription drugs that were unnecessary or not provided, witnesses testified that the 
facilities were in poor condition and provided inadequate careinformation that was concealed by bribing 
a State regulator for advance notice of surprise inspections.  The leader of the scheme was sentenced to 
20 years in prison, and his accomplice was sentenced to over 6 years in prison. 
 
An inpatient rehabilitation company settled allegations of submitting false patient diagnoses and admitting 
patients unnecessarily to bolster Medicare payments.  The company allegedly provided false diagnoses on 
patient assessments to keep its facilities eligible for a special Medicare status that pays a higher rate.  The 
company also allegedly admitted and billed for Medicare patients that did not need the care they were 
provided.  The company paid $48 million to resolve the allegations. 
 
Three pharmaceutical companies settled allegations of using nonprofit foundations to increase their 
proceeds from Medicare.  The companies agreed to pay over $120 million to resolve allegations that they 
illegally paid beneficiaries copays through purportedly independent nonprofit foundations.  Federal law 
prohibits pharmaceutical companies from paying Medicare beneficiaries to induce the purchase of the 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
companies drugs, which can increase costs for the program.  Two of the companies also entered into CIAs 
in connection with the settlements. 
 
OIG found that not all States are conducting criminal background checks for high-risk Medicaid providers.  
Thirteen States had not implemented fingerprint-based criminal background checks for their high-risk 
Medicaid providers as of January 1, 2019.  Unscrupulous providers could exploit loopholes in the 
enrollment process to avoid undergoing these checks, leaving the Federal and State governments 
vulnerable to fraud risks.  OIG recommended that CMS ensure State compliance with background check 
requirements for Medicaid providers and take actions to close the identified loopholes.  (See report 
OEI-05-18-00070.) 
 
Ensuring Appropriate Use of Medicaid Funds 
OIG reviews of CMS and States administration of Medicaid are critical to ensuring that Federal and State 
Medicaid funds are spent in accordance with payment rules and on behalf of eligible beneficiaries.  
Significant OIG work during this semiannual reporting period includes the following: 
 
OIG found that Florida made hundreds of millions of dollars in unallowable Medicaid payments to a 
hospital under a waiver program.  As part of its Medicaid reform waiver, Florida established the Low 
Income Pool (LIP) program to compensate hospitals for providing care to low-income patients.  OIG found 
that during State FYs 2010 through 2014, Florida paid $686 million to Jackson Memorial Hospital under the 
LIP program in excess of the hospitals allowable costs.  OIG recommended that Florida refund the $412 
million Federal share of the unallowable payments, improve its oversight of the LIP program, and make 
other procedural changes.  (See report A-04-17-04058.) 
 
OIG found that New York incorrectly treated some beneficiaries as eligible for Medicaid.  Although New 
York correctly determined Medicaid eligibility for the majority of sampled beneficiaries, it incorrectly 
determined that some beneficiaries were eligible for the program and did not provide documentation to 
confirm eligibility for others.  OIG estimated that the Federal share of New Yorks payments was $520 
billion for ineligible beneficiaries and $1.3 billion for potentially ineligible beneficiaries.  OIG also found that 
New Yorks enrollment system did not always query all electronic data sources to confirm beneficiaries 
reported income.  OIG made recommendations to New York State to address these finding, including that 
New York redetermine, as appropriate, the eligibility status for the individuals we identified as ineligible.  
(See report A-02-16-01005.) 
 
Protecting Beneficiaries From Abuse, Neglect, and Unsafe Conditions 
Protecting individuals served by HHS programs from abuse, neglect, and unsafe conditions is central to 
OIGs mission.  Oversight work to ensure safety and well-being is particularly important for facilities and 
home-based programs that care for the elderly, the terminally ill, and other vulnerable populations.  
Significant OIG work during this semiannual reporting period includes the following: 
 
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  Department of Health and Human Services Office of Inspector General 
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OIG found that potential abuse and neglect at nursing facilities was not always reported and investigated, 
and that CMS could better use Medicare data to identify instances of potential abuse and neglect.  An 
estimated one in five high-risk emergency room visits by Medicare beneficiaries in 2016 resulted from 
potential abuse or neglect at skilled nursing facilities (SNFs).  OIG determined that SNFs did not report 
many of these incidents to State Survey Agencies, and that some Survey Agencies failed to report 
substantiated abuse to local law enforcement.  In addition, OIG found that a data extract containing 
diagnosis codes indicative of abuse or neglect could help ensure that incidents of potential abuse or 
neglect are detected and investigated.  OIG recommended that CMS work with Survey Agencies and SNFs 
to improve staff training and clarify guidance on identifying and reporting abuse and neglect.  OIG also 
recommended that CMS use diagnosis codes in Medicare claims data to better monitor potential abuse 
and neglect incidents.  (See reports A-01-16-00509 and A-01-17-00513.) 
 
OIG found that the ACL did not appropriately oversee the activities of two independent living programs.  
Although ACL conducted some monitoring activities, such as desk reviews, it had not conducted any onsite 
compliance reviews of two independent living programs since beginning its oversight of the programs in 
July 2014.  ACL officials said that they were unable to conduct onsite compliance reviews because of 
limited travel funding.  OIG recommended that ACL determine whether it can allocate funds differently or 
seek additional funding to enable onsite compliance reviews.  (See report A-05-18-00034.) 
 
OIG found that New York did not adequately oversee life safety and emergency preparedness 
requirements in 20 nursing homes.  OIG identified deficiencies in areas related to life safety and 
emergency preparedness at all 20 nursing homes OIG reviewed.  These deficiencies left residents at 
increased risk of injury or death during a fire or other emergency.  The identified areas of noncompliance 
occurred because of inadequate management oversight and staff turnover at the nursing homes, but gaps 
in New Yorks oversightsuch as not having a standard life safety training program for all nursing home 
staffalso existed.  New York agreed with our recommendations to improve its oversight of the nursing 
homes compliance with Federal requirements for life safety and emergency preparedness.  (See report 
A-02-17-01027.) 
 
Promoting Access to High-Quality Care 
HHS programs provide critical health and human services to vulnerable populations in many different 
settings.  Therefore, HHS must ensure that the individuals in HHS programs have access to and receive 
high-quality care and services.  Significant OIG work during this semiannual reporting period includes the 
following: 
 
OIG highlighted the prevalence of quality-of-care deficiencies among hospice providers and gaps in 
Medicare protections for hospice patients.  Three out of four hospices inspected in 2016 were cited with at 
least one deficiency, such as poor care planning or inadequate patient assessments.  Additionally, over 300 
hospices had at least one serious deficiency or at least one substantiated severe complaint.  OIG also 
described cases of serious harm that reveal gaps and vulnerabilities in Medicares protections for hospice 
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  Department of Health and Human Services Office of Inspector General 
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patients.  OIG recommended that CMS take a number of actions to more effectively protect hospice 
beneficiaries from harm.  (See reports OEI-02-17-00020 and OEI-02-17-00021.) 
 
OIG found that many Medicaid-enrolled children who were treated for attention deficit hyperactivity 
disorder (ADHD) did not receive recommended followup care.  Followup care is an important part of 
treatment for ADHD as the disorder can affect all aspects of a childs academic and health outcomes.  OIG 
found that over 500,000 Medicaid-enrolled children who were newly prescribed an ADHD medication and 
over 3,500 children hospitalized with a primary diagnosis of ADHD did not receive followup care within the 
timeframes outlined in the national quality measures.  CMS agreed with our recommendations to work 
toward improving health outcomes by developing strategies to increase the number of children who 
receive timely followup care for ADHD.  (See report OEI-07-17-00170.) 
 
OIG identified organizational challenges to improving quality of care at IHS hospitals along with 
longstanding difficulties in recruiting and retaining staff.  In two reports, we examined challenges and 
identified strategies for improving quality of care at IHS hospitals.  In one report, we analyzed IHS's 
management of the closure (due to serious quality problems and staffing shortages) and reopening of the 
emergency department at its Rosebud Hospital.  In the other report, we outlined strategies for IHS to 
address core organizational challenges that have limited its ability to improve hospital operations and 
quality of care. (See reports OEI-06-17-00270 and OEI-06-16-00390.) 
 
OIG found limited availability of behavioral health services in New Mexicos Medicaid managed care 
program.  Shortages of providers and difficulty arranging services has resulted in limited availability of 
behavioral health care for New Mexicos Medicaid managed care enrollees.  The challenges faced by New 
Mexico are likely shared by other States, and require both State and national attention.  Both CMS and 
New Mexico agreed with OIGs recommendations to help address these challenges, including expanding 
the behavioral health workforce, improving transportation options for enrollees, and expanding the use of 
telehealth.  (See report OEI-02-17-00490.) 
 
OIG found that beneficiaries face avoidable extra steps that can limit their access to prescribed drugs in 
Medicare Part D.  In 2017, Part D plan sponsors rejected millions of prescriptions that beneficiaries tried to 
fill at pharmacies, and overturned a large number of drug-coverage denials when beneficiaries appealed.  
Some of these rejections and denials were avoidable or inappropriate, creating extra steps that can delay 
or deter access to medications if beneficiaries are unable or unwilling to spend time navigating the 
approval process.  CMS agreed with OIGs recommendations that CMS address these issues through 
improved electronic communication between sponsors and prescribers, additional action to reduce 
inappropriate pharmacy rejections and coverage denials, and more accessible information for 
beneficiaries.  (See report OEI-09-16-00411.) 
 
Safeguarding the Security and Integrity of Medical Research 
Congress, NIH, and Federal intelligence agencies have raised concerns about foreign and other threats to 
the integrity of taxpayer-funded research and intellectual property.  In FY 2019, OIG received $5 million in 
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congressional appropriations to conduct oversight of NIH grant programs and operations.  OIGs oversight 
work is reviewing (1) intellectual property and cybersecurity protections, (2) compliance with Federal 
requirements and NIH policies for grants and contracts, and (3) integrity of grant application and selection 
processes.  Significant OIG work completed during this semiannual reporting period includes the following: 
 
OIG found that NIH has improved its review of financial conflicts of interest (FCOIs) that institutions report 
to it, but it has limited controls in place to ensure that institutions report everything that they should.  OIG 
found that NIH has made strides in its oversight of FCOIs reported by institutions.  Specifically, NIH has 
strengthened its reporting requirements and developed an online system for collecting, reviewing, and 
storing the FCOIs that institutions report.  However, NIH could do more to ensure the quality of the 
reviews of FCOIs that its staff performs.  In another review, OIG found that NIH has limited policies, 
procedures, and controls in place to ensure that institutions report all sources of research support, financial 
interests, and affiliations.  More than half of the 1,875 institutions that received NIH funding in FY 2018 and 
were required to have FCOI policies did not have such policies posted on their websites.  NIH agreed with 
OIGs recommendations to help address these issues.  (See reports A-03-19-03003 and OEI-03-19-00150.) 
 
OIG found strengths and limitations in NIHs vetting of peer reviewers.  NIHs process for vetting peer 
reviewer nominees has a number of strengths, including robust verification of scientific expertise, 
consideration of ability to be an effective peer reviewer, and checks for prior research misconduct.  
However, OIG found that NIH generally limits the sources it uses to vet other concerns and gives little 
attention to foreign affiliation in its vetting of peer reviewer nominees.  NIH agreed with OIGs 
recommendation that NIH, in consultation with national security experts and the HHS Office of National 
Security, update its guidance to identify potential foreign threats and develop a risk-based approach for 
additional vetting.  (See report OEI-01-19-00160.) 
   
12 
 
 
  Department of Health and Human Services Office of Inspector General 
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OIG Participation in Congressional Hearings 
 
Date  Witness  Testimony/Committee 
9/19/2019  Ann Maxwell, Assistant Inspector  HHS-OIG Oversight of the Unaccompanied Alien 
General for Evaluation and  Children Program, House Committee on Energy 
Inspections  and Commerce 
9/18/2019  Ann Maxwell, Assistant Inspector  HHS-OIG Oversight of the Unaccompanied Alien 
General for Evaluation and  Children Program, House Committee on 
Inspections  Appropriations 
7/23/2019  Megan H. Tinker, Senior Advisor for  Promoting Elder Justice: A Call for Reform, 
Legal Affairs  Senate Committee on Finance 
7/12/2019  Ann Maxwell, Assistant Inspector  HHS-OIG Oversight of the Unaccompanied Alien 
General for Evaluation and  Children Program, House Committee on 
Inspections  Oversight and Reform 
6/19/2019  Vicki L. Robinson, Senior Counselor  The Complex Web of Prescription Drug Prices, 
for Policy  Part III: Examining Agency Efforts to Further 
Competition and Increase Affordability, Senate 
Special Committee on Aging 
6/5/2019  Leslie W. Hollie, Chief of  Foreign Threats to Taxpayer-Funded Medical 
Investigative Operations  Research: Oversight Opportunities and Policy 
Solutions, Senate Committee on Finance 
 
 
 
13 
 
 
  Department of Health and Human Services Office of Inspector General 
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Selected Acronyms and Abbreviations  
 
ACA  Patient Protection and Affordable Care Act 
ACF  Administration for Children and Families 
ACL  Administration for Community Living 
CDC  Centers for Disease Control and Prevention 
CIA  corporate integrity agreement 
CMP  civil monetary penalty 
CMS  Centers for Medicare & Medicaid Services 
CCDF  Child Care and Development Fund 
DHS  Department of Homeland Security 
DOJ  Department of Justice 
DME  durable medical equipment 
EMTALA  Emergency Medical Treatment and Labor Act 
FCA  False Claims Act 
FDA  Food and Drug Administration 
FY  fiscal year 
GAO  Government Accountability Office 
HHS  Department of Health and Human Services 
HIPAA  Health Insurance Portability and Accountability Act of 1996 
HRSA  Health Resources and Services Administration 
IHS  Indian Health Service 
LIHEAP  Low-Income Home Energy Assistance Program 
MCO  managed care organization 
MFCU  Medicaid Fraud Control Unit 
NIH  National Institutes of Health 
OAS  Office of Audit Services 
OCIG  Office of Counsel to the Inspector General 
OEI  Office of Evaluation and Inspections 
OI  Office of Investigations 
OIG  Office of Inspector General 
OMB  Office of Management and Budget 
SAMHSA   Substance Abuse and Mental Health Services Administration 
SNF  skilled nursing facility 
14 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Medicare and Medicaid Reports and Reviews 
Medicare Program Reports and Reviews 
Financial Management and Improper Payments 
Trends in Deficiencies at Nursing Homes Show That Improvements Are Needed To Ensure the Health 
and Safety of Residents (A-09-18-02010), April 2019 
 
Our objective in this data brief was to analyze trends in the deficiencies that State agencies 
identified in nursing home surveys across the Nation.  Our data analysis showed the following: 
  The number of nursing home surveys and deficiencies slightly increased each year from 
2013 through 2016, then slightly decreased in 2017. 
  Ninety-four percent of deficiencies had less serious ratings, and 6 percent of deficiencies 
had more serious ratings. 
  About 31 percent of nursing homes had a deficiency type that was cited at least five times 
during our review period. 
  Ten States accounted for half of the deficiencies identified. 
  The top 10 of 340 deficiency types accounted for more than 40 percent of deficiencies. 
 
The results of our analysis do not clearly indicate whether the quality of care and the safety of 
nursing home residents improved during our review period. 
 
We made several recommendations to CMS in our previous report to help ensure the health and 
safety of nursing home residents.  Implementing those recommendations and considering the 
information in this data brief may help CMS and other stakeholders to identify areas for 
improvement in the nursing home survey and certification process, ensure that deficiencies recur 
less frequently at nursing homes, and improve the quality of care and the safety of residents at 
nursing homes across the Nation. 
 
New York Should Improve Its Oversight of Selected Nursing Homes Compliance With Federal 
Requirements for Life Safety and Emergency Preparedness (A-02-17-01027), August 2019 
 
New York did not ensure that selected nursing homes in the State that participated in the Medicare 
or Medicaid programs complied with CMS requirements for life safety and emergency 
preparedness.  As a result, residents at the 20 nursing homes we reviewed were at increased risk of 
injury or death during a fire or other emergency. 
 
The identified areas of noncompliance occurred because of inadequate management oversight 
and staff turnover at the nursing homes.  In addition, New York did not have a standard life safety 
training program for all nursing home staff (not currently required by CMS), generally performed 
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  Department of Health and Human Services Office of Inspector General 
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comprehensive life safety surveys no more frequently than once every 9 to 15 months, and did not 
check to see whether carbon monoxide detectors were installed. 
 
New York generally agreed with our recommendations to improve its oversight of the nursing 
homes compliance with Federal requirements for life safety and emergency preparedness.  New 
York also described steps it has taken or plans to take to address those recommendations. 
 
Quality of Care, Safety, and Access 
Concerns About Opioid Use in Medicare Part D in the Appalachian Region (OEI-02-18-00224), April 
2019 
 
We found that 36 percent of beneficiaries in five States in the Appalachian regionAlabama, 
Kentucky, Ohio, Tennessee, and West Virginiareceived a prescription opioid through Medicare 
Part D in 2017.  Almost 49,000 beneficiaries in these States received high amounts of opioids, far 
exceeding levels the CDC says to avoid.  Of these, nearly 6,000 beneficiaries were at serious risk of 
opioid misuse or overdose.  These 6,000 beneficiaries received extreme amounts of opioids or 
appeared to be doctor shopping.  Ensuring the appropriate use and prescribing of opioids is 
essential to protecting the health and safety of beneficiaries and the integrity of Part D.  The 
severity of the crisis makes it imperative that the HHS, including CMS and OIG, continue to work 
with its partners to address this epidemic. 
 
Using Health IT for Care Coordination: Insights from Six Medicare Accountable Care Organizations 
(OEI-01-16-00180), May 2019 
 
The six Accountable Care Organizations (ACOs) we visited have used health IT tools to better 
coordinate care for their patients.  However, the promise of seamless integration and coordination 
across providers and care settings has not yet been realized.  This work showcases some of the 
advances ACOs have made as well as challenges that remain for fulfilling that promise. 
 
Incidents of Potential Abuse and Neglect at Skilled Nursing Facilities Were Not Always Reported and 
Investigated (A-01-16-00509), June 2019 
 
An estimated one in five high-risk hospital ER Medicare claims for treatment provided in 2016 were 
the result of potential abuse or neglect, including injury of unknown source, of beneficiaries 
residing in a SNF.  We determined that SNFs failed to report many of these incidents to the State 
Survey Agencies in accordance with applicable Federal requirements.  We also determined that 
several Survey Agencies failed to report some findings of substantiated abuse to local law 
enforcement.  Lastly, we determined that CMS does not require all incidents of potential abuse or 
neglect and related referrals made to law enforcement and other agencies to be recorded and 
tracked.  Preventing, detecting, and combating elder abuse requires CMS, Survey Agencies, and 
SNFs to meet their responsibilities. 
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  Department of Health and Human Services Office of Inspector General 
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CMS concurred with our recommendations that it take action to ensure that incidents of potential 
abuse or neglect of Medicare beneficiaries residing in SNFs are identified and reported.  
Specifically, we recommended that CMS work with the Survey Agencies to improve training for 
staff of SNFs on how to identify and report incidents of potential abuse or neglect of Medicare 
beneficiaries, clarify guidance to define and provide examples of incidents of potential abuse or 
neglect, require the Survey Agencies to record and track all incidents of potential abuse or neglect 
in SNFs and referrals made to local law enforcement and other agencies, and monitor the Survey 
Agencies reporting of findings of substantiated abuse to local law enforcement. 
 
CMS Could Use Medicare Data To Identify Instances of Potential Abuse or Neglect (A-01-17-00513), 
June 2019 
 
We estimated that, of 34,664 Medicare claims for our audit period that contained diagnosis codes 
indicating the treatment of injuries potentially caused by abuse or neglect of Medicare 
beneficiaries, 2,574 were allegedly perpetrated by a healthcare worker, 3,330 were related to 
incidents that occurred in a medical facility, and 9,294 were related to incidents that were not 
reported to law enforcement. 
 
CMS did not identify the Medicare claims that indicate potential abuse or neglect because, 
according to CMS officials, it did not extract data consisting of Medicare claims containing the 17 
diagnosis codes related to abuse or neglect.  The lack of a data extract impeded the ability of CMS 
or of public and patient safety organizations to pursue legal, administrative, and other appropriate 
remedies to ensure the safety, health, and rights of Medicare beneficiaries. 
 
CMS concurred with our recommendations that it assess the sufficiency of existing Federal 
requirements to report suspected abuse and neglect of Medicare beneficiaries and strengthen 
those requirements or seek additional authorities as appropriate.  CMS did not concur with our 
recommendations that it (1) compile a complete list of diagnosis codes that indicate potential 
physical or sexual abuse and neglect, (2) use that list to conduct periodic data extracts of all 
Medicare claims containing at least one of those codes, and (3) inform States that the extracted 
Medicare claims data are available to help States ensure compliance with their mandatory 
reporting laws. 
 
Part D Plans Generally Include Drugs Commonly Used by Dual Eligibles: 2019 (OEI-05-19-00220), 
June 2019 
 
We found that overall, the rate at which Part D plan formularies include the drugs commonly used 
by dual eligibles (i.e., individuals who are eligible for both Medicare and Medicaid) is high, with 
some variation.  The 401 unique formularies used by the 4,073 Part D plans include 97 percent of 
the 196 drugs most commonly used by dual eligibles and covered by Part D.  In addition, 72 
percent of the commonly used drugs are included by all Part D plan formularies.  On average, 
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  Department of Health and Human Services Office of Inspector General 
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formularies applied utilization management tools to 28 percent of the unique drugs we reviewed in 
2019. 
 
Because some variation exists in formularies inclusion of these drugs and in their application of 
utilization management tools to the drugs, some dual eligibles may need to use alternative 
methods to access the drugs they take. 
 
Opioid Use Decreased in Medicare Part D, While Medication-Assisted Treatment Increased 
(OEI-02-19-00390), July 2019 
 
We found that nearly 3 in 10 Medicare Part D beneficiaries received opioids in 2018, a decrease 
from the previous 2 years.  At the same time, the number of beneficiaries receiving drugs for 
medication-assisted treatment for opioid use disorder steadily increased and reached almost 
174,000 in 2018.  In addition, the number of beneficiaries receiving prescriptions through Part D for 
naloxonea drug that can reverse the effects of an opioid overdosemore than doubled from 
2017 to 2018.  Nearly 354,000 beneficiaries received high amounts of opioids in 2018, with about 
49,000 of them at serious risk of opioid misuse or overdose; this was fewer than in the previous 2 
years.  About 200 prescribers had questionable opioid prescribing for the beneficiaries at serious 
risk.  Although progress has been made in decreasing opioid use in Part D and increasing the use 
of medication-assisted treatment and the availability of naloxone, it is imperative for the 
Department to continue to implement effective strategies and develop new ones to address this 
epidemic. 
 
Hospice Deficiencies Pose Risks to Medicare Beneficiaries (OEI-02-17-00020), July 2019 
 
Over 80 percent of hospices had at least one deficiency.  The most common types of deficiencies 
involved poor care planning, mismanagement of aide services, and inadequate assessments of 
beneficiaries.  Further, one-third of hospices had complaints filed against them.  Over 300 hospices 
were poor performers in that each had at least one serious deficiency or at least one substantiated 
severe complaint in 2016.  The findings make clear the need for CMS to strengthen its oversight of 
the Medicare hospice program to better protect both the program and its beneficiaries. 
 
CMS concurred or partially concurred with the following recommendations: 
  Expand the deficiency data that accrediting organizations report to CMS and use the data 
to strengthen its oversight of hospices; 
  Take the steps necessary to seek statutory authority to include information from accrediting 
organizations on Hospice Compare; 
  Include on Hospice Compare the survey reports from accrediting organizations, once 
authority is obtained; 
  Educate hospices about common deficiencies and those that pose particular risks to 
beneficiaries; and 
  Increase oversight of hospices with a history of serious deficiencies. 
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  Department of Health and Human Services Office of Inspector General 
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CMS did not concur with the remaining recommendation: 
  Include on Hospice Compare the survey reports from State agencies. 
 
Safeguards Must Be Strengthened To Protect Medicare Hospice Beneficiaries From Harm 
(OEI-02-17-00021), July 2019 
 
Some beneficiaries have been seriously harmed when hospices provided poor care or failed to take 
action in cases of abuse.  These cases reveal vulnerabilities in beneficiary protections that CMS 
must address, including strengthening reporting requirements, to better ensure that beneficiary 
harm is identified, reported, addressed, and, ultimately, prevented. 
 
There is one existing recommendation from prior OIG work that addresses these findings: 
  CMS should seek statutory authority to establish additional, intermediate remedies for poor 
hospice performance. 
 
In addition, CMS concurred with the first four of the following new recommendations and partially 
concurred with the fifth: 
  Strengthen requirements for hospices to report abuse, neglect, and other harm; 
  Ensure that hospices are educating their staff to recognize signs of abuse, neglect, and 
other harm; 
  Strengthen guidance for surveyors to report crimes to local law enforcement; 
  Monitor surveyors use of immediate jeopardy citations; and 
  Improve and make user-friendly the process for beneficiaries and caregivers to make 
complaints. 
 
ACOs Strategies for Transitioning to Value-Based Care: Lessons From the Medicare Shared Savings 
Program (OEI-02-15-00451), July 2019 
 
As part of their transition to value-based care, Medicare Shared Savings Program ACOs reported a 
number of successful strategies in reducing Medicare spending and improving quality of care for 
patients.  These strategies should inform CMSs broader efforts to transform the healthcare system 
from fee-for-service to value-based care. 
 
CMS concurred with all of our recommendations, which were to: 
  review the impact of programmatic changes on ACOs ability to promote value-based care; 
  expand efforts to share information about strategies that reduce spending and improve 
quality among ACOs and more widely with the public; 
  adopt outcome-based measures and better align measures across programs; 
  assess and share information about ACOs use of the 3-day waiver and apply these results 
when making changes to the Shared Savings Program or other programs; 
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  Department of Health and Human Services Office of Inspector General 
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  identify and share information about strategies that integrate physical and behavioral 
health services and address social determinants of health; 
  identify and share information about strategies that encourage patients to share behavioral 
health data; and 
  prioritize ACO referrals of potential fraud, waste, and abuse. 
 
Opioid Use in Medicare Part D in Missouri (OEI-02-19-00391), September 2019 
 
We found that one-third of beneficiaries in Missouri received an opioid through Part D in 2018, 
which is higher than the national rate.  In addition, almost 10,000 beneficiaries in Missouri received 
high amounts of opioids.  About 1,400 beneficiaries in Missouri are at serious risk of opioid misuse 
or overdose.  The severity of the national opioid crisis makes it imperative that States, including 
Missouri, take effective steps to address the epidemic.  OIG supports State and Federal efforts to 
combat the opioid crisis.  Notably, OIG supports States efforts to implement and enforce strong 
prescription drug monitoring programs that require prescribers and pharmacies to check a 
database before prescribing and dispensing opioids. 
 
Some Medicare Part D Beneficiaries Face Avoidable Extra Steps that Can Delay or Prevent Access to 
Prescribed Drugs (OEI-09-16-00411), September 2019 
 
In 2017, Part D insurance companies (called sponsors) rejected millions of prescriptions that 
beneficiaries tried to fill at pharmacies, and overturned a large number of drug-coverage denials 
when beneficiaries appealed.  Some of these rejections and denials were avoidable or 
inappropriate, creating unnecessary extra steps for beneficiaries to obtain needed medications.  
Extra steps can delay or deter beneficiaries access to medications if those beneficiaries are unable 
or unwilling to spend time navigating the approval process. 
 
CMS concurred with all of our recommendations, which were to:  
  take additional steps to improve electronic communication between Part D sponsors and 
prescribers to reduce avoidable pharmacy rejections and coverage denials; 
  take action to reduce inappropriate pharmacy rejections; 
  take action to reduce inappropriate coverage denials; and 
  provide beneficiaries with clear, easily accessible information about sponsor performance 
problems, including those related to inappropriate pharmacy rejections and coverage 
denials. 
 
Medicares Oversight of Ambulatory Surgical Centers (OEI-01-15-00400), September 2019 
 
We found that CMS has made progress in strengthening oversight of ambulatory surgery centers 
(ASCs) and addressing vulnerabilities that we previously identified, and more can be done.  Most 
ASCsknown as nondeemed ASCsundergo a State agency survey to demonstrate they meet 
Medicare requirements; othersknown as deemed ASCsundergo a survey from an approved 
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  Department of Health and Human Services Office of Inspector General 
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accreditor.  States largely met Medicares requirement to survey 25 percent of nondeemed ASCs in 
FY 2017, and nearly half met its requirement to have surveyed all ASCs within the prior 6 years.  
However, infection control deficiencies found in State surveys continue to be a concern.  We also 
found that from FYs 2013 to 2017, States received complaints for fewer than 4 percent of all ASCs 
(deemed and nondeemed) each year, but the share of those complaints requiring an onsite survey 
more than tripled.  The results of this new analysis can support CMS in further strengthening its 
oversightparticularly of the few States that are falling short of meeting its requirements.  It can 
also help CMS focus on ASCs recurring challenges in meeting health and safety requirements, 
especially for infection control. 
 
Wisconsin Physicians Service Needs Enhanced Guidance and Provider Education Related to 
Phlebotomy Travel Allowances (A-06-17-04005), September 2019  
 
Payments made by Wisconsin Physicians Service (WPS) to providers for travel allowances for 
clinical diagnostic laboratory tests did not always comply with Medicare requirements.  Specifically, 
76 of the 109 claim lines in our stratified random sample that were reviewed complied with 
Medicare requirements, but 33 claim lines did not (some lines had multiple deficiencies).  WPS 
made payments to providers for (1) claims with incorrectly calculated prorated mileage, (2) claims 
using the incorrect clinical laboratory fee schedule rate, and (3) claims without sufficient 
documentation to support payment.  On the basis of our sample results, we estimated that WPS 
paid providers $353,755 in travel allowances for clinical laboratory services that were not in 
accordance with Medicare requirements. 
 
WPS agreed to implement our recommendations that it (1) work with CMS to clarify guidance to 
providers, which could have resulted in savings totaling an estimated $353,755 during our audit 
period; (2) educate providers on how to correctly calculate the prorated mileage for phlebotomy 
travel allowance payments; (3) educate providers on their responsibility to bring any previously 
paid claims to their MACs attention if they were paid using the wrong rate; and (4) educate 
providers on their responsibility to maintain adequate documentation to support payment for 
phlebotomy travel allowance payments. 
 
Program Integrity 
2018 Performance Data for the Senior Medicare Patrol Projects (OEI-02-19-00280), May 2019 
 
The Senior Medicare Patrol (SMP) projects receive grants from the Administration for Community 
Living to recruit and train retired professionals and other older adults and community members to 
prevent, recognize, and report healthcare fraud, errors, and abuse.  In 2018, the 61 SMP projects 
had a total of 6,935 total active team members who conducted a total of 26,932 group outreach 
and education events, reaching an estimated 1.7 million people.  In addition, the projects had 
278,761 individual interactions with, or on behalf of, a Medicare beneficiary.  The projects reported 
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  Department of Health and Human Services Office of Inspector General 
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$15,136 in expected Medicare recoveries and $5,734 in expected Medicaid recoveries.  Cost 
avoidance totaled $602,063, while savings to beneficiaries and others totaled $27,689. 
 
The Centers for Medicare & Medicaid Services Could Use Comprehensive Error Rate Testing Data To 
Identify High-Risk Home Health Agencies (A-05-17-00035), September 2019 
 
CMS could use Comprehensive Error Rate Testing (CERT) data to identify high-risk home health 
agencies (HHAs) as a part of a multifaceted approach that includes targeted probe-and-educate 
reviews as well as aspects of its Fraud Prevention System to further reduce improper payments and 
the error rate for claims paid to HHAs.  Using nationally reported CERT program data for FYs 2014 
through 2017, we identified 87 high-risk HHAs, which in the CERT sample had an improper 
payment rate of about 78 percent and approximately $1 million in actual improper payments.  
Using Medicare program data during this same period, we determined that Medicare paid these 87 
HHAs more than $4 billion for services. 
 
Given the amount of Medicare dollars paid to these providers and the high error rate observed in 
the CERT sample, focusing oversight on high-risk HHAs and the prevalent types of errors could 
significantly improve the effectiveness of CMSs efforts to reduce both HHA improper payments 
and the CERT error rate. 
 
In written comments on our data brief, CMS recognized that HHA claims are a major source of 
improper payments and described past and future corrective actions that address this issue. 
 
Drug Pricing and Reimbursement 
Medicare Part D Rebates for Prescriptions Filled at 340B Contract Pharmacies (A-03-16-00002),  
July 2019  
 
We determined that tens of millions of dollars in rebates could have been generated had 
manufacturers and sponsors agreed that eligible prescriptions filled at 340B contract pharmacies 
would receive rebates.  If the Part D prescriptions for the sponsors in our review had been filled at  
non-340B pharmacies, sponsors calculated that manufacturers would have paid rebates of up to  
$74.7 million for 554,549 claims in 2014.  The manufacturers did not pay these rebates because, as 
sponsors reported, rebate agreements did not require manufacturers to pay rebates for Part D 
drugs filled at a 340B contract pharmacy.  
 
We also found that because there are no 340B identifiers on claims and PDE records, sponsors do 
not have the data to distinguish whether prescriptions dispensed at a 340B contract pharmacy 
were filled using 340B drugs.  Therefore, the possible additional rebate amount of up to  
$74.7 million is for both 340B and non-340B drugs filled at a 340B contract pharmacy for Part D 
beneficiaries. 
 
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  Department of Health and Human Services Office of Inspector General 
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There is an opportunity to potentially reduce Part D costs if sponsors were to negotiate similar net 
prices for both non-340B drugs dispensed by 340B contract pharmacies and drugs dispensed by 
non-340B pharmacies. 
 
This report contains no recommendations.  We provide this report to inform congressional and 
administration decisionmakers of the impact that drugs dispensed at 340B contract pharmacies 
may have on the Part D program. 
 
Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A Hospice Benefit 
(A-06-17-08004), August 2019 
 
Medicare Part D paid for drugs during 2016 that hospices should have paid for under the Medicare 
Part A hospice benefit.  On the basis of our sample results, we estimated that the Part D total cost 
was $160.8 million for drugs that hospice organizations should have paid for.  Additionally, 
although hospices told us they should not have paid for the drugs associated with the remaining 
$261.9 million of the $422.7 million total cost, a review of CMS communications with hospices and 
sponsors between 2012 and 2016 indicates otherwise-hospice organizations or hospice 
beneficiaries likely should have paid for many of these drugs, not Part D. 
 
CMS must do more to avoid paying twice for the same drugs.  As we have previously 
recommended, CMS should work directly with hospices to ensure that they are providing drugs 
covered under the hospice benefit.  In addition, we recommend that CMS should develop and 
execute a strategy to ensure that Part D does not pay for drugs that should be covered by the Part 
A hospice benefit. 
 
CMS stated that its current efforts will address the issue and help ensure that there is no disruption 
in beneficiary access.  We disagree with CMSs assertion that its current activities will adequately 
address the issue, and we continue to recommend that CMS develop controls to stop the duplicate 
hospice drug payments. 
 
Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2017 Average Sales Prices 
(OEI-03-19-00260), August 2019 
 
On the basis of 2017 data, CMS lowered Medicare Part B reimbursement for 14 drugs, saving 
Medicare and its beneficiaries $7 million over 1 year.  This finding highlights the success of OIGs 
mandated quarterly comparisons of average sales prices (ASPs) with average manufacturer prices 
(AMPs) and implementation of CMSs current price-substitution policy.  (If OIG finds that the ASP 
for a drug exceeds the AMP by a certain percentagecurrently, 5 percentthe ASP-based 
payment amount is substituted with a lower calculated rate.  This serves as a mechanism for 
monitoring market prices and limiting potentially excessive payment amounts.) 
 
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  Department of Health and Human Services Office of Inspector General 
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OIG continues to recommend that CMS expand the price-substitution criteria.  CMS did not concur 
with this recommendation and believes that more experience with the price-substitution policy is 
needed before it can be expanded. 
 
Rebates for Brand-Name Drugs in Part D Substantially Reduced the Growth in Spending from 2011 to 
2015 (OEI-03-19-00010), September 2019 
 
Overall, we found that increases in rebates substantially reduced the percentage increase in 
reimbursement for brand-name drugs in Part D from 2011 to 2015.  Although rebates reduced the 
growth of total Part D spending, they did not prevent increased overall Part D spending for brand-
name drugs from 2011 to 2015, as Medicare still spent $2 billion more for brand-name drugs with 
rebates in 2015 than in 2011.  At a drug-by-drug level, unit rebates did not always increase as unit 
reimbursement increased for brand name drugs reviewed.  In fact, although unit reimbursement 
increased for nearly all drugs, rebates declined as unit reimbursement grew for 39 percent of drugs 
reviewed. 
 
Medicaid Program Reports and Reviews 
Financial Management and Improper Payments 
California Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries 
Deaths (A-04-18-06220), May 2019 
 
Georgia Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries 
Deaths (A-04-15-06183), August 2019 
 
Illinois Medicaid Managed Care Organizations Received Capitation Payments After Beneficiaries 
Deaths (A-05-18-00026), August 2019 
 
Previous OIG reviews found that States had improperly paid Medicaid Managed Care 
Organizations (MCOs) capitation payments on behalf of deceased beneficiaries.  We reviewed 
MCOs capitation payments in three States. 
 
We estimated that California made unallowable payments totaling $70.9 million ($53.4 million 
Federal share) to MCOs during our audit period.  The unallowable payments occurred because 
California did not (1) disenroll beneficiaries after their dates of death were identified; (2) identify 
inconsistencies between dates of death and other data; or (3) regularly use additional sources or 
alternative procedures to identify, verify, or determine dates of death. 
 
We estimated that Georgia made payments totaling nearly $2.2 million ($1.6 million Federal share) 
after a beneficiarys death to MCOs during our audit period. 
 
24 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
We estimated that Illinois did not recover unallowable MCO payments made on behalf of deceased 
beneficiaries during our audit period, totaling at least $4.6 million ($3.2 million Federal share).  
Illinois did not enter the dates of death in the Medicaid Management Information System (MMIS) 
for the majority of our sampled beneficiaries. 
 
California generally concurred with our recommendations that it refund $53.4 million to the 
Federal Government and identify and recover unallowable payments made to MCOs during our 
audit period on behalf of deceased beneficiaries, which we estimate to be at least $70.9 million, 
and with our other procedural and administrative recommendations. 
 
Georgia generally concurred with our findings and described actions it has taken or plans to take 
to address our recommendations that it (1) use additional sources of date of death, (2) implement 
additional controls to more effectively detect payments involving deceased, and (3) continue to 
identify payments made after a beneficiarys death to prevent additional payments. 
  
Illinois accepted our recommendations that it (1) refund $3.2 million to the Federal Government;  
(2) identify and recover unallowable payments made to MCOs during our audit period on behalf of 
deceased beneficiaries, which we estimate to be at least $4.6 million; (3) identify capitation 
payments made on behalf of deceased beneficiaries before and after our audit period, and repay 
the Federal share of amounts recovered; and (4) ensure that dates of death are added to the MMIS 
for deceased beneficiaries that were previously marked as inactive.  
 
New York May Not Have Complied With Federal and State Requirements Prohibiting Medicaid 
Payments for Inpatient Hospital Services Related to Provider-Preventable Conditions 
(A-02-16-01022), May 2019 
 
Massachusetts Did Not Ensure Its Managed-Care Organizations Complied With Requirements 
Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions 
(A-01-17-00003), May 2019 
 
Pennsylvania Did Not Ensure That Its Managed-Care Organizations Complied With Requirements 
Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions 
(A-03-16-00205), August 2019 
 
Federal regulations prohibit Medicaid payments for inpatient hospital services related to provider-
preventable conditions (PPCs).  We reviewed three States to determine whether they ensured that 
their Medicaid MCOs complied with these regulations. 
 
New York did not provide sufficient evidence that it prevented or reduced any payments for PPCs.  
In addition, New York did not provide documentation of the PPCs in its claim payment processing 
system or its policies and procedures to identify and update PPCs.  Therefore, we have set aside 
payments for these services for resolution by CMS and New York. 
25 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
Massachusetts MCOs paid providers approximately $10 million for 533 claims that contained PPCs.  
In addition, the MCOs did not have policies or procedures to identify PPCs on claims for inpatient 
hospital services or determine whether payments for claims containing PPCs should have been 
reduced. 
 
Pennsylvania MCOs paid providers approximately $43.5 million for 576 claims that contained PPCs.  
As a result, unallowable payments for services related to treating PPCs might have been included in 
the calculation of capitation payment rates. 
 
New York generally agreed with our recommendations that it provide CMS with sufficient 
documentation to determine whether any portion of the $50.3 million Federal Medicaid 
reimbursement was unallowable and refund to the Federal Government the unallowable amount. 
 
Massachusetts did not address our recommendations that it (1) work with the MCOs to determine 
the portion of the $10 million that was unallowable, (2) enforce the requirement that makes MCO 
compliance with the PPC provisions a condition of their payment, (3) enforce the requirement that 
allows intermediate sanctions to be imposed upon MCOs for failure to comply with applicable 
requirements, (4) require the MCOs to implement internal controls, and other procedural 
recommendations.  Massachusetts said it will work with the MCOs to further review the 533 claims 
and to improve its MCOs data, reporting, and related processes but disagreed with the amount of 
our finding and its impact on future capitation rates. 
 
Pennsylvania concurred with all of our recommendations, including that it (1) work with the MCOs 
to determine the portion of the $43.5 million that was unallowable for claims containing PPCs and 
its impact on capitation payment rates, (2) include a clause in its agreements with the MCOs that 
would allow Pennsylvania to recoup funds when contract provisions and Federal and State 
requirements are not met, and (3) enforce the provisions in its agreements that allow sanctions or 
penalties to be imposed for noncompliance with or failure to meet performance and program 
standards. 
 
New York Claimed Federal Reimbursement for Some Payments to Health Home Providers That Did 
Not Meet Medicaid Requirements (A-02-17-01004), July 2019 
 
For 22 of 100 sampled payments, New York improperly claimed Federal Medicaid reimbursement 
for payments made to health home providers that did not comply with Federal and State 
requirements.  Specifically, New Yorks health home providers did not provide services according to 
a comprehensive individualized patient-centered care plan, ensure that beneficiaries participated in 
the development and execution of their care plan, maintain documentation to support services 
billed, bill correctly for services, and bill only for services actually provided.  New York also claimed 
reimbursement for services that duplicated similar ones provided under a different Medicaid-
funded program. 
26 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
The deficiencies occurred because New York did not adequately monitor health home providers 
for compliance with certain Federal and State requirements for providing, documenting, and billing 
services.  Based on our sample results, we estimated that New York improperly claimed at least  
$65.5 million in Federal Medicaid reimbursement for payments made to health home providers. 
 
New York did not indicate concurrence or nonconcurrence with our recommendations that it 
refund $65.5 million to the Federal Government and that it improve its monitoring of the health 
home program to ensure that providers comply with Federal and State requirements for (1) 
providing services according to a care plan and ensuring beneficiary participation in the 
development and execution of the care plan, (2) maintaining documentation to support services 
billed, (3) billing correctly for services, (4) billing only for services actually provided, and (5) not 
billing for services that duplicate those provided under a different Medicaid-funded program. 
 
New York Did Not Correctly Determine Medicaid Eligibility for Some Non-Newly Eligible Beneficiaries 
(A-02-16-01005), July 2019 
 
For our sample of 130 beneficiaries, New York correctly determined Medicaid eligibility for 110 
beneficiaries but incorrectly determined Medicaid eligibility for 6 beneficiaries.  New York did not 
provide supporting documentation to verify that the remaining 14 beneficiaries were Medicaid-
eligible.  Additionally, New Yorks enrollment system did not always query all electronic data 
sources to ensure that individuals were reporting all sources of countable income when applying 
for Medicaid.  Lastly, New York did not always maintain documentation to support eligibility 
determinations. 
 
On the basis of our sample results, we estimated that New York made Federal Medicaid payments 
of $520.3 million on behalf of 383,893 ineligible beneficiaries and $1.3 billion on behalf of 618,057 
potentially ineligible beneficiaries during our 6-month audit period. 
 
New York did not specifically indicate concurrence or nonconcurrence with our recommendations 
that it (1) redetermine, as appropriate, the current Medicaid eligibility status of the sampled 
beneficiaries who did not meet Federal and State eligibility requirements; (2) take the necessary 
steps to ensure that local district and marketplace staff consider all available, relevant information 
and data sources, as well as all Federal and State requirements, when determining Medicaid 
eligibility; and (3) maintain the necessary documentation to determine whether it enrolled 
individuals who did not meet Federal and State Medicaid eligibility requirements, which could have 
resulted in up to $1.3 billion in potentially improper Federal Medicaid payments over the 6-month 
audit period. 
 
 
 
27 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
New York Incorrectly Claimed Enhanced Federal Medicaid Reimbursement for Some Beneficiaries 
(A-02-15-01023), August 2019 
 
New York incorrectly enrolled beneficiaries in eligibility categories for which services were 
reimbursed at an enhanced Federal medical assistance percentage (FMAP) rate despite case file 
documentation indicating that the beneficiaries should have been enrolled in a group for which 
services qualified under the standard FMAP or were not eligible for reimbursement. 
 
On the basis of our sample results, we estimated that New York incorrectly claimed enhanced 
Federal Medicaid reimbursement of $116.9 million on behalf of 184,590 Medicaid beneficiaries 
enrolled in the new adult group during our 6-month audit period. 
 
New York did not indicate concurrence or nonconcurrence with our recommendations that it (1) 
redetermine, as appropriate, the current Medicaid coverage group of the sampled beneficiaries for 
which services were incorrectly reimbursed at an enhanced FMAP rate; (2) ensure that it claims 
Medicaid reimbursement at the correct FMAP rate by taking the necessary steps to ensure that its 
staff considers all relevant documentation and Federal and State requirements during the 
enrollment process, which could have reduced or eliminated an estimated $116.9 million in 
overpayments caused by eligibility errors over the 6-month audit period; and (3) maintain the 
necessary documentation to determine whether it enrolled individuals who did not meet Federal 
and State Medicaid eligibility requirements in the new adult group. 
 
Colorado Did Not Correctly Determine Medicaid Eligibility for Some Newly Enrolled Beneficiaries 
(A-07-16-04228), August 2019 
 
Colorado made Medicaid payments on behalf of newly eligible beneficiaries who did not meet, or 
who may not have met, Federal and State eligibility requirements.  Colorado correctly determined 
eligibility and, therefore, correctly claimed Federal Medicaid reimbursement, on behalf of 43 of the 
60 beneficiaries in our statistical sample.  However, of the remaining 17 beneficiaries whom 
Colorado determined to be newly eligible for Medicaid, 14 were ineligible and 4 may have been 
ineligible.  We estimated that the financial impact of the incorrect eligibility determinations made 
by Colorado totaled at least $66.5 million on behalf of 85,085 ineligible beneficiaries and at least 
$26.8 million on behalf of 13,372 potentially ineligible beneficiaries. 
 
These deficiencies occurred because Colorado did not always follow written policies and 
procedures when making eligibility determinations and because of system and procedural errors 
related to eligibility determinations, as well as human errors made by Colorado staff and 
caseworkers.  
 
Colorado agreed with our recommendations that it redetermine, as appropriate, the current 
Medicaid eligibility status of the sampled beneficiaries.  We also make other procedural 
28 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
recommendations regarding improvements to the design, functionality, and accuracy of Colorados 
eligibility determination system. 
 
Florida Medicaid Paid Hundreds of Millions in Unallowable Payments to Jackson Memorial Hospital 
Under Its Low Income Pool Program (A-04-17-04058), August 2019  
 
Florida paid hundreds of millions of dollars to Jackson Memorial Hospital (the Hospital) under the 
Low Income Pool (LIP) program that were not in accordance with its Research and Demonstration 
Waiver for Medicaid reform and Federal regulations.  Of the $1.8 billion in LIP payments made to 
the Hospital during our audit period, Florida claimed Medicaid reimbursement of $686 million 
($412 million Federal share) in excess of the Hospitals allowable costs, including $132 million 
($64 million Federal share) of net Hospital-reported overpayments and $554 million ($348 million 
Federal share) of unallowable costs identified during this audit. 
 
We recommend that Florida (1) refund $412 million to the Federal Government, including  
$64 million of hospital-reported net overpayments and $348 million of unallowable costs identified 
during this audit; (2) instruct hospitals to establish procedures to return the Federal share of any 
overpayments in their LIP cost-limit calculations; (3) establish procedures to ensure that it returns 
to the Federal Government the Federal share of overpayments reported by hospitals; and  
(4) improve its oversight of the LIP program.  We also made other procedural recommendations. 
 
Both the Hospital and Florida disagreed with our findings.  Most significantly, the Hospital and 
Florida contended that we incorrectly determined that the Hospital should offset Medicare and 
commercial insurance payments against costs for dual-eligible patients.  After reviewing both the 
Hospitals and Floridas comments, we maintain that our findings and recommendations are correct 
but reduced the recommended refund from $436 million to $412 million based on additional 
information that Florida provided. 
 
CMS Paid Over $277 Million in Unallowable CHIPRA Bonus Payments Based on Incorrect Enrollment 
Data (A-04-17-08061), September 2019 
 
Our previous audits of Childrens Health Insurance Program Reauthorization Act of 2009 (CHIPRA) 
bonus payments identified over $277 million in unallowable payments from $645 million that CMS 
paid to 12 States, representing approximately 43 percent of all bonus payments made to those 
States.  CMS has taken significant action to recover these overpayments.  Three States voluntarily 
returned overpayments totaling approximately $37 million to CMS, and CMS withheld almost $51 
million from States with unspent bonus payment funds.  Additionally, CMS issued letters to States 
initiating recovery of the remaining $189 million in unallowable payments our audits identified. 
 
These unallowable payments occurred because the CMS CHIPRA bonus program had internal 
control weaknesses that allowed States to submit incorrect current enrollment numbers to CMS.  
29 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Additionally, CMS did not use available data to conduct postaward reviews to verify the accuracy of 
the current enrollment that the States reported for their bonus payments. 
 
CMS concurred with our findings and described actions it has taken or plans to take to address our 
recommendations that it continue to work with States to collect the remaining $189 million in 
unallowable payments from the over $277 million that we identified in 12 previously issued reports 
and consider the results of these reviews when designing internal controls for similar programs to 
ensure that timely and accurate data are available for adequate oversight, followup, and 
verification. 
 
Ohio Made Medicaid Capitation Payments That Were Duplicative or Were Improper Based on 
Beneficiary Eligibility Status or Demographics (A-05-16-00061), September 2019 
 
Ohio did not always make capitation payments for its Medicaid Managed Care program in 
accordance with Federal and State requirements.  For 135 of 200 sampled beneficiary-months, 
Ohio either made proper capitation payments or canceled the capitation payments before we 
selected the sample.  Capitation payments for the remaining 65 beneficiary-months were 
improper.  On the basis of our sample results, we estimated that Ohio claimed net overpayments 
totaling at least $10.6 million ($6.7 million Federal share) for beneficiary-months in the sampling 
frame.  Generally, Ohio made these improper payments because eligibility system controls did not 
prevent them, payment system controls did not adjust them, or users entered incorrect data in the 
eligibility systems. 
 
Ohio concurred with our recommendation that it refund $6.7 million to the Federal Government.  
Ohio concurred with one of our procedural recommendations about controls to prevent improper 
capitation payments in the future but did not concur with the other two.  However, Ohio described 
actions it has taken or planned to take in response to all three procedural recommendations.   
 
Quality of Care, Safety, and Access 
National Background Check Program for Long Term Care Providers: Assessment of State Programs 
Concluded Between 2013 and 2016 (OEI-07-16-00160), April 2019 
 
The National Background Check Program (Program) provides grants to States to develop systems 
to conduct background checks of State and Federal criminal history records for prospective long-
term-care employees.  The 10 States that had concluded their participation in the Program by 2016 
varied in the extent to which they achieved implementation of Program requirements.  Seven of 
these 10 States implemented all or most of the selected requirements.  Three States did not have 
the necessary authority through State legislation and could not fully implement background check 
programs. 
 
30 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
CMS concurred with our recommendation  to take appropriate action to encourage participating 
States to obtain necessary authorities to fully implement Program requirements. 
 
Four States Did Not Comply With Federal Waiver and State Requirements in Overseeing Adult Day 
Care Centers and Foster Care Homes (A-05-19-00005), May 2019 
 
Four States (Minnesota, Illinois, Wisconsin, and Mississippi) did not comply with Federal waiver and 
State requirements in overseeing adult day service centers (centers) and adult foster care homes 
(homes).  Our reviews found 1,141 instances of noncompliance with health and safety and 
administrative requirements at 96 of the 100 centers and homes reviewed. 
 
State officials in Minnesota, Wisconsin, and Mississippi said that most instances of noncompliance 
occurred because of low staffing levels that limited the States oversight and monitoring of facilities 
and because of insufficient training on State requirements.  State officials in Illinois and Minnesota 
said that the absence of templates for State-required administrative records and unclear State 
requirements contributed to noncompliance with numerous health and safety and administrative 
requirements. 
 
CMS concurred with our recommendations that it work with the States reviewed to ensure that the 
instances of noncompliance with health and safety and administrative requirements identified in 
this report are corrected; assist all States in ensuring the health and safety of vulnerable adults by 
offering technical assistance on staffing models in centers, homes, and other home and 
community-based services (HCBS) settings; review current training the States provide to centers 
and homes; and ensure the health and safety of vulnerable adults by offering technical assistance 
on possible templates for administrative records in centers, homes, and other HCBS settings. 
 
Alaska Did Not Fully Comply With Federal and State Requirements for Reporting and Monitoring 
Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities (A-09-17-02006), 
June 2019  
 
Alaska did not fully comply with Federal Medicaid waiver and State requirements for reporting and 
monitoring critical incidents involving Medicaid beneficiaries with developmental disabilities 
residing in community-based settings.  For the 303 judgmentally selected claims we reviewed,  
68 percent (205 claims) were not reported to Alaska as critical incidents. 
 
Alaska did not have a process, such as performing analytical procedures on Medicaid claims data, 
to determine whether there were unreported critical incidents.  Alaska cannot investigate and take 
appropriate action to protect the health and welfare of Medicaid beneficiaries with developmental 
disabilities when community-based providers do not report critical incidents.  As a result of not 
ensuring that providers reported all critical incidents, Alaska did not ensure proper responses to 
critical incidents or events as outlined in the safeguard assurances it provided to CMS in the 
Federal Medicaid waivers. 
31 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
Alaska did not indicate concurrence or nonconcurrence with our recommendations that it (1) work 
with community-based providers on processes to identify and report all critical incidents, and  
(2) perform analytical procedures, such as data matches, on Medicaid claims data to identify 
potential critical incidents that have not been reported and investigate as needed. 
 
Kentucky Did Not Comply With Federal Waiver and State Requirements at 14 of 20 Adult Day Health 
Care Facilities Reviewed (A-04-18-00123), July 2019 
 
Kentucky did not fully comply with Federal waiver and State requirements in overseeing providers 
that serve vulnerable adults receiving adult day healthcare services through the program.  Of the 
20 providers that we reviewed, 12 did not comply with 1 or more health and safety requirements, 
and 10 did not comply with 1 or more administrative requirements.  We found 63 instances of 
provider noncompliance, including 26 instances of noncompliance with health and safety 
requirements.  The remaining 37 instances related to administrative requirements, some of which 
could significantly affect health and safety. 
 
Kentucky did not fully comply with Federal waiver and State requirements because its annual 
inspections of facilities were insufficient to ensure a continuously safe and nonhazardous 
environment.  Officials stated, however, that Kentucky improved monitoring in April 2018 by 
modifying its provider recertification process to include annually reviewing all providers and 
completing a certification tool during an announced site visit to each provider. 
 
Kentucky did not indicate concurrence or nonconcurrence with our recommendation that it ensure 
that providers correct the 63 instances of provider noncompliance identified in this report.  
Kentucky concurred with our recommendations that it improve its oversight and monitoring of 
providers by considering unannounced site visits and by enhancing its certification tool as it 
pertains to reviewing participant records and that it work with providers to improve their facilities, 
staffing, and training. 
 
Oversight of Opioid Prescribing and Monitoring of Opioid Use: States Have Taken Action To Address 
the Opioid Epidemic (A-09-18-01005), July 2019 
 
We identified actions that selected States took related to their oversight of opioid prescribing and 
their monitoring of opioid use.  The selected States were Nebraska, Nevada, New Hampshire, 
Tennessee, Texas, Utah, Washington, and West Virginia.  This report summarizes and compares 
information provided by the eight States. 
 
The States have created policies and procedures and passed laws and regulations related to 
opioids.  The States are using opioid-related data to perform data analytics, as well as performing 
outreach to providers and patients.  The States have implemented a number of opioid-related 
32 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
prevention, detection, and treatment programs.  Finally, the States have taken many other actions 
to address the opioid epidemic. 
 
This report contains no recommendations. 
 
Many Medicaid-Enrolled Children Who Were Treated for ADHD Did Not Receive Recommended 
Followup Care (OEI-07-17-00170), August 2019 
 
OIG reviewed Medicaid claims data from all States and the District of Columbia and found over 
500,000 Medicaid-enrolled children newly prescribed an ADHD medication did not receive 
followup care within the timeframes outlined in the national quality measures.  Followup care is an 
important part of treatment for ADHD as the disorder can affect all aspects of a childs academic 
and health outcomes. 
 
CMS concurred with all of our recommendations, which were to: 
  collaborate with partners to develop strategies for improving rates of followup care for 
children treated for ADHD, 
  provide technical assistance to States to implement strategies for improving rates of 
followup care for children treated for ADHD, and 
  analyze the effectiveness of strategies for improving rates of followup care for children 
treated for ADHD. 
 
National Review of Opioid Prescribing in Medicaid Is Not Yet Possible (OEI-05-18-00480), 
August 2019 
 
We found that 32 States were missing data for variables needed to review opioid prescribing in 
Medicaid and that limitations of data from the national Medicaid claims databasethe 
Transformed Medicaid Statistical Information System (T-MSIS)impede identification of individual 
beneficiaries for national opioid analysis.  Until T-MSIS data are complete in all States and 
limitations across States are addressed, it will not be possible to conduct a national evaluation of 
Medicaid beneficiaries at risk of opioid misuse or overdose. 
 
CMS concurred with all of our recommendations, which were to: 
  work to ensure that individual beneficiaries can be uniquely identified at a national level 
using T-MSIS, 
  ensure the correct submission of National Provider Identifiers for prescribers, and 
  clarify requirements for diagnosis codes. 
 
National Background Check Program: Assessment of Concluded State Grant Programs in 2017 and 
2018 (OEI-07-18-00290), August 2019 
 
33 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
OIG reviewed the National Background Check Program for Long-Term-Care Providers (Program) 
and found that 9 of the 11 States that concluded their participation in 2017 and 2018 did not 
implement all of the selected Program requirements, primarily because of a lack of State legislative 
authority.  The findings of this report are consistent with our previous assessments of the Program 
and provide further support for one open OIG recommendation.  We strongly encourage CMS to 
implement the open recommendation to take appropriate actions to encourage States to obtain 
the necessary legislative authority to fully implement Program requirements. 
 
Provider Shortages and Limited Availability of Behavioral Health Services in New Mexico's Medicaid 
Managed Care (OEI-02-17-00490), September 2019 
 
New Mexicos Medicaid managed care program has limited availability of behavioral health 
services for its enrollees, including few behavioral health providers and difficulty arranging services.  
The challenges faced by New Mexicoincluding provider shortages and limited availability of 
behavioral health servicesare likely shared by other States and will require both State and 
national attention. 
 
Both CMS and the New Mexico Human Services Department concurred with our 
recommendations.  The first recommendation was made to CMS and the following 10 
recommendations were made to the State: 
  Identify States that have limited availability of behavioral health services and develop 
strategies and share information to ensure that Medicaid managed care enrollees have 
timely access to these services. 
  Take steps to expand New Mexicos overall behavioral health workforce. 
  Increase behavioral health providers participation in Medicaid managed care. 
  Review New Mexicos standards governing access to care and determine whether 
additional standards are needed for behavioral health providers. 
  Improve access to transportation for Medicaid managed care enrollees needing behavioral 
health services. 
  Work with State partners to strengthen access to broadband in rural and frontier counties. 
  Expand the use of telehealth to increase the availability of behavioral health services. 
  Take steps to increase adoption of electronic health records and participation in the State 
Health Information Exchange by behavioral health providers.  
  Identify and share information about strategies to improve care coordination. 
  Expand initiatives to integrate behavioral and primary healthcare. 
  Share information about open-access scheduling and the Treat First Clinical Model and 
promote expansion. 
 
Program Integrity 
Problems Remain for Ensuring All High Risk Medicaid Providers Undergo Criminal Background 
Checks (OEI-05-18-00070), July 2019 
34 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
We found that 13 States had not implemented fingerprint-based criminal background checks for 
their high-risk Medicaid providers as of January 1, 2019.  We also found that unscrupulous 
providers could exploit loopholes in the provider enrollment process to enroll in Medicaid without 
undergoing these checks.  If not all high-risk providers undergo criminal background checks, the 
Federal and State Governments are vulnerable to unscrupulous providers intent on defrauding the 
Medicaid program. 
 
CMS concurred with our recommendation to: 
  ensure that all States fully implement fingerprint-based criminal background checks for 
high-risk Medicaid providers.  
 
CMS did not concur with our recommendations to: 
  amend CMS guidance so that States cannot forgo conducting criminal background checks 
on high-risk providers applying for Medicaid that have already enrolled in Medicare unless 
Medicare has conducted the checks, and 
  compare high-risk Medicaid providers self-reported ownership information to Medicares 
provider ownership information to help States identify discrepancies. 
 
California Needs To Improve Oversight of Community-Based Adult Services Providers Compliance 
With Health and Safety and Administrative Requirements (A-09-18-02002), September 2019 
 
Californias oversight did not ensure that providers serving vulnerable adults who received services 
through the Community-Based Adult Services Program complied with Federal waiver and State 
requirements.  All 24 providers we reviewed did not comply with 1 or more health and safety or 
administrative requirements.  The 24 providers reviewed each had from 1 to 21 instances of 
noncompliance.  In total, we found 290 instances of noncompliance with health and safety and 
administrative requirements. 
 
According to State officials from the administering departments, relicensing surveys were not 
always conducted within the required 2-year timeframe because of competing priorities and 
staffing issues.  In addition, because recertification focuses on quality-of-care issues, some 
instances of noncompliance related to the centers physical environment were not always identified 
during inspections. 
 
California agreed with our recommendations that it (1) ensure that the 24 providers we reviewed 
correct the 290 instances of noncompliance identified in this report and (2) work with the other 
administering departments to improve the oversight of providers to ensure that relicensing surveys 
are conducted within the required 2-year timeframe and recertification inspections evaluate all 
applicable compliance areas. 
 
35 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Drug Pricing and Reimbursement 
Medicaid Could Save Hundreds of Millions by Excluding Authorized Generic Drug Transactions to 
Secondary Manufacturers from Brand Name Drugs Average Manufacturer Price Calculations 
(A-06-18-04002), April 2019 
 
By including authorized generic drug transactions to secondary manufacturers in the brand name 
drugs AMP calculations, Medicaid received 46 percent less in rebates than it otherwise would have 
for the nine brand-name drugs we reviewed, amounting to $595 million for CY 2017. 
 
CMS concurred with our recommendation that it seek legislative change to exclude authorized 
generic drug transactions to secondary manufacturers from the AMP calculation of the brand-
name drug, which may increase manufacturer Medicaid rebate obligations by hundreds of millions 
each year. 
 
Indiana Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-Administered 
Drugs (A-05-17-00038), April 2019 
 
New Jersey Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-Administered 
Drugs (A-02-16-01012), May 2019 
 
Illinois Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-Administered 
Drugs (A-05-18-00030), June 2019 
 
Connecticut Claimed Unallowable Federal Reimbursement for Medicaid Physician-Administered 
Drugs That Were Not Invoiced to Manufacturers for Rebates (A-07-18-06078), August 2019 
 
For a covered outpatient drug to be eligible for Federal reimbursement under the Medicaid 
programs drug rebate requirements, manufacturers must pay rebates to the States for the drugs.  
We reviewed four States compliance with Federal Medicaid requirements for invoicing 
manufacturers for rebates for physician-administered drugs.  These States internal controls did not 
always ensure that they invoiced manufacturers to secure rebates. 
 
Indiana did not invoice manufacturers for rebates associated with $710,420 (Federal share) in 
single-source and top-20 multiple-source physician-administered drugs.  Further, Indiana did not 
submit the drug utilization data necessary to secure rebates for other physician-administered drugs 
totaling $142,339 (Federal share). 
 
New Jersey did not invoice manufacturers for rebates associated with $8.1 million (Federal share) in 
single-source and top-20 multiple-source physician-administered drugs.  Further, New Jersey did 
not submit the drug utilization data necessary to secure rebates for other physician-administered 
36 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
drugs.  These drugs were included in claims totaling $7,889 (Federal share) that did not have drug 
codes and in claims totaling $1.1 million (Federal share) that contained drug codes. 
 
Illinois did not invoice manufacturers for rebates associated with $4.1 million (Federal share) in 
physician-administered drugs.  Further, Illinois did not submit the drug utilization data necessary to 
secure rebates for other physician-administered drugs, totaling $258,640 (Federal share). 
 
Connecticut did not invoice manufacturers for rebates associated with $1.1 million (Federal share) in 
physician-administered drugs.  Further, Connecticut did not submit the utilization data necessary to 
secure rebates for all other physician-administered drug claims totaling $2.8 million (Federal share). 
 
Indiana generally agreed with our recommendations that it refund $710,420 and work with CMS to 
determine the proper resolution of the $142,339 for the other drug claims in question. 
 
New Jersey concurred with our procedural recommendations and partially concurred with our 
recommendations that it refund to the Federal Government $8.1 million for single-source and top-
20 multiple-source physician-administered drugs and work with CMS to determine the unallowable 
portion of the $1.1 million for other drug claims in question. 
 
Illinois concurred with our recommendations that it refund $4.1 million and work with CMS to 
determine the proper resolution of the $258,640 for the other drug claims in question. 
 
Connecticut generally concurred with our recommendations that it refund to the Federal 
Government $1.07 million (Federal share) for claims for single-source physician-administered drugs, 
and $46,210 for claims for top-20 multiple-source physician-administered drugs, and work with 
CMS to determine the unallowable portion of the $2.8 million (Federal share) for other claims for 
outpatient physician-administered drugs that were at issue. 
 
One Percent of Drugs With Medicaid Reimbursement Were Not FDA-Approved (OEI-03-17-00120), 
May 2019 
 
We found that nearly all drugs with Medicaid reimbursement in 2016 were approved by FDA.  
However, 1 percent of drugs with Medicaid reimbursement were not FDA-approved, and we were 
unable to determine the FDA approval status for another 3 percent of drugs.  CMS concurred with 
all of our recommendations, which were to: 
  work with States to recoup any potentially inappropriate Federal reimbursement for drugs 
that it determines were not FDA approved and did not meet the criteria for an exception, 
  continue to improve its reporting system to prevent inappropriate reimbursement for drugs 
that are not FDA approved, and 
  work with States to ensure that they prevent inappropriate reimbursement for drugs that 
are not FDA approved and do not meet the criteria for an exception. 
 
37 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
New Jersey Did Not Bill Manufacturers for Tens of Millions of Dollars in Rebates for Drugs Dispensed 
to Enrollees of Medicaid Managed-Care Organizations (A-02-16-01011), August 2019 
 
Texas Did Not Bill Manufacturers for Some Rebates for Physician-Administered Drugs Dispensed to 
Enrollees of Medicaid Managed-Care Organizations (A-06-17-04001), August 2019 
 
New Jersey did not bill for and collect from manufacturers estimated rebates of $75.5 million 
(Federal share) for pharmacy and physician-administered drugs that were eligible or may have 
been eligible for rebates for our audit period.  Additionally, using data for our audit period, we 
estimated that the State did not bill for and collect $119.6 million (Federal share) in drug rebates 
from manufacturers for the nearly 4-year period before our audit period. 
 
Texas did not bill for and collect from manufacturers rebates of $4.4 million ($2.6 million Federal 
share) for physician-administered drugs.  In addition, Texas did not bill for rebates for 160,579 claim 
lines for other physician-administered drugs that may have been eligible for rebates. 
 
New Jersey agreed with our recommendations that it (1) bill for and collect from manufacturers 
rebates for single-source and top-20 multiple-source pharmacy and physician-administered drugs 
and refund the estimated $28.1 million (Federal share) and (2) work with CMS to determine 
whether the other pharmacy and physician-administered drugs were eligible for rebates and, if so, 
upon receipt of the rebates, refund up to an estimated $47.4 million (Federal share) for our audit 
period and $119.6 million (Federal share) for the nearly 4-year period before our audit period.  We 
also made procedural recommendations. 
 
Texas did not indicate concurrence or nonconcurrence with our recommendations that it (1) bill 
manufacturers for the $2.2 million (Federal share) in rebates for single-source and top-20 multiple-
source physician-administered drugs, and refund the Federal share of rebates collected; (2) work 
with CMS to determine whether the non-top-20 multiple-source physician-administered drugs 
were eligible for rebates and, if so, bill manufacturers for the rebates and refund the Federal share 
of rebates collected; (3) work with CMS to determine whether the other physician-administered 
drugs were eligible for rebates and, if so, determine the rebates due and refund the Federal share 
of the rebates collected; and (4) strengthen internal controls to ensure that all eligible physician-
administered drugs are billed for rebate. 
 
Reasonable Assumptions in Manufacturer Reporting of AMPs and Best Prices (OEI-12-17-00130), 
September 2019 
 
We found that under current practices, CMS never assesses the majority of the reasonable 
assumptions that it allows manufacturers to make when calculating average manufacturer price 
(AMP) and best price (BP).  Historically, CMS has provided little formalized oversight of the 
reasonable assumptions process, specifically instructing manufacturers not to submit their 
reasonable assumptions to CMS.  Ensuring the accuracy of manufacturer-reported AMPs and BPs is 
38 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
vital given that these prices are the primary benchmarks that the Federal Government uses to 
calculate the rebates and discounts available to Medicaid and certain safety-net providers. 
 
CMS concurred with all of our recommendations, which were to: 
  issue guidance related to the areas identified in the reportspecifically, value-based 
purchasing arrangements; 
  assess the costs and benefits of implementing a targeted process to review certain 
assumptions; and 
  implement a system to share responses to manufacturer inquiries for technical assistance. 
   
39 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Legal and Investigative Activities Related to 
Medicare and Medicaid  
OIG investigates allegations of fraud, waste, and abuse in all HHS programs.  Our largest body of work 
involves investigating matters related to the Medicare and Medicaid programs, such as patient harm; 
billing for services not rendered, medically unnecessary services, or upcoded services (i.e., services billed 
for at a level higher than warranted); illegal billing, sale, and diversion of prescription drugs; the marketing 
of off-label uses for prescription drugs; and solicitation and receipt of kickbacks, including illegal payments 
to patients for involvement in fraud schemes and illegal referral arrangements between physicians and 
medical companies. 
 
OIG also conducts investigations regarding organized criminal activity, including medical identity theft and 
fraudulent medical schemes established for the sole purpose of stealing Medicare dollars.  Investigators 
are opening an increasing number of cases against healthcare providers who engage in these healthcare 
fraud schemes.  Those who participate in the schemes may face heavy fines, jail time, and exclusion from 
participation in Federal health care programs. 
 
One of the most common types of fraud perpetrated against Medicare, Medicaid, and other Federal health 
care programs involves filing false claims for reimbursement.  False claims may be pursued under Federal 
and State criminal statutes and, when appropriate, under the FCA.  Depending on the types of fraud or 
other violations involved, OIG investigations may culminate in criminal or civil court judgments and 
decisions, administrative sanctions and decisions, and/or negotiated settlement agreements.  Investigative 
outcomes take many forms, including incarceration, restitution, fines, penalties, forfeitures, assessments, 
and exclusion of individuals or entities from participation in all Federal health care programs.  Frequently 
used exclusion and penalty authorities are described on our website at 
http://oig.hhs.gov/fraud/enforcement/cmp/. 
 
During this semiannual reporting period, we reported 353 criminal and 357 civil actions against individuals 
or entities that engaged in offenses related to healthcare.  We also reported over $1.47 billion in 
investigative receivables due to HHS and more than $1.13 billion in non-HHS investigative receivables, 
including civil and administrative settlements or civil judgments related to Medicare, Medicaid, and other 
Federal, State, and private healthcare programs.   
 
Criminal and Civil Enforcement Activities Related to Medicare and Medicaid 
The following recently completed actions and settlements are organized by the type of provider or entity 
involved.  Additional cases appear in the Medicare Fraud Strike Force Activities section below. 
 
40 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Pharmaceutical Companies 
The following case examples involve pharmaceutical companies: 
 
VirginiaReckitt Benckiser Group PLC and Reckitt Benckiser LLC (collectively "RB Group") 
entered into a $700 million civil FCA settlement with the United States in connection with 
the marketing and promotion of the opioid addiction treatment drug Suboxone.  The civil 
settlement agreement is part of a global criminal, civil, and administrative settlement under 
which RB Group agreed to pay a total of $1.4 billion.  The civil settlement agreement 
resolved FCA allegations that RB Group (directly and through its subsidiaries) caused false 
claims for Suboxone to be submitted to Federal health care programs. More specifically, 
the civil settlement resolved allegations that RB Group knowingly (1) promoted the sale and 
use of Suboxone to physicians who were writing prescriptions for the drug without any 
counseling or psychosocial support and for uses that were unsafe, ineffective and medically 
unnecessary and that were often diverted for uses that lacked a legitimate medical 
purpose; (2) promoted the sale or use of Suboxone film to physicians and State Medicaid 
agencies using false and misleading claims; and (3) submitted a Citizens Petition containing 
fraudulent claims about Suboxone tablet to the FDA in 2012 and took other steps to delay 
the entry of generic competition for Suboxone tablets. 
 
MassachusettsThree pharmaceutical companiesJazz Pharmaceuticals (Jazz), Lundbeck 
LLC (Lundbeck), and Alexion Pharmaceuticals Inc. (Alexion)agreed to pay a total of 
$122.6 million to resolve allegations that they each violated the FCA by illegally paying the 
Medicare or Civilian Health and Medical Program (ChampVA) copayments for their own 
products, through purportedly independent 501(c)3 foundations that the companies used 
as mere conduits for unlawful payments to patients.  The foundations operated funds that 
pay the copayments of certain patients, including Medicare patients.  The Federal anti-
kickback statute prohibits pharmaceutical companies from paying remuneration (either 
directly or indirectly) to induce Federal health care program beneficiaries to purchase the 
companies drugs.  Jazz and Lundbeck each entered into a CIA in connection with its 
respective settlement. 
 
Pharmacies 
The following case example involves a pharmacy: 
 
FloridaEliseo Dejesus Espaillat, owner and operator of AC National Pharmacy, Inc., was 
convicted of charges resulting from his involvement in a scheme to defraud Medicare Part 
D.  According to court documents, Espaillat and his co-conspirators submitted and caused 
the submission of fraudulent claims to healthcare benefit programs, concealed the 
submission of the fraudulent claims to healthcare benefit programs, concealed the receipt 
and transfer of fraud proceeds, and diverted the fraud proceeds for their personal use.  
41 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Specifically, Espaillat billed Medicare for drugs that it neither purchased nor dispensed, and 
opened multiple shell companies to launder the proceeds.  Espaillat was indicted in 
February 2017 and in April 2018 was apprehended by the United States Marshals Service 
deputies while attempting to enter a courthouse in the Dominican Republic.  Espaillat was 
extradited to Miami where he pleaded guilty and was sentenced to 4 years and 3 months in 
prison and ordered to pay $1.13 million in restitution, joint and several.  One defendant 
involved in the scheme was previously sentenced to 3 years and 10 months and ordered to 
pay $1.1 million in restitution, joint and several. 
 
Ambulance Transportation Companies 
The following case example involves an ambulance transportation company: 
 
TexasKeeble Lovall, owner of Your Health EMS (Your Health), was involved in a scheme 
to defraud Medicare out of more than $2.8 million.  Lovall knowingly and falsely billed 
Medicare and Medicaid for non-eligible transports.  Specifically, Lovall submitted claims for 
individual ambulance transports, when in fact, multiple patients were being transported via 
one ambulance.  Moreover, Your Health submitted claims for transporting Medicare 
patients via an ambulance to Partial Hospitalization Programs at various facilities, which is 
an unauthorized transport.  Additionally, Lovall billed Medicare through Your Health for 
ambulance transportation services when there was no medical necessity for the transport.  
As a result of Lovalls actions, Your Health falsely billed Medicare for approximately $2.8 
million in ambulance transports which were never provided or were not medically 
necessary, and Your Health was reimbursed approximately $1.0 million by Medicare.  Lovall 
pleaded guilty to conspiracy to commit healthcare fraud and was sentenced to 5 years and 
3 months in prison and was ordered to pay $1.3 million in restitution. 
 
Laboratories 
The following case example involves a laboratory: 
 
District of ColumbiaBoston Heart Diagnostics Corp (BHD) entered into a settlement 
agreement with the United States to resolve allegations that BHD submitted false claims to 
the Medicare, Medicaid, and TRICARE programs.  BHD agreed to pay $1,728,818 to resolve 
allegations that BHD engaged in a scheme to encourage physicians to order medically 
unnecessary clinical laboratory testing services for 26 tests. 
 
Home Health Agencies 
The following case examples involve home health agencies: 
 
42 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
CaliforniaTwo Los Angeles-area home health agency owners and operators, Angela 
Avetisyan and Ashot Minasyan, were sentenced to a total of 16 years and 6 months in 
prison for their roles in a scheme to bill Medicare for various items and services, including 
home health services, diagnostic testing, medical procedures and DME that were not 
medically necessary and/or were not provided.  The two were ordered to pay $4.2 million 
in restitution, jointly and severally.  In addition to Avetisyan and Minasyan, Robert Glazer 
and Marina Merino were also charged based on their involvement in the scheme and are 
awaiting sentencing.  Avetisyan and Minasyan each pleaded guilty to conspiracy to commit 
healthcare fraud.  As part of their guilty pleas, the two admitted that as co-owners and 
operators of Fifth Avenue Home Health (Fifth Avenue), they engaged in a conspiracy with 
Glazer, Merino, and others to recruit Medicare patients to Glazers clinic so that Glazer 
could use those patients information to bill for medically unnecessary outpatient clinic 
services and refer those patients for medically unnecessary home health services from Fifth 
Avenue and other home health agencies.  Avetisyan and Minasyan further admitted that 
they paid Merino and other patient recruiters illegal kickbacks to bring Medicare patients to 
the Glazer clinic.  A court found that Avetisyan and Minasyan, along with their co-
conspirators, submitted and caused the submission of false and fraudulent claims for home 
health services that were medically unnecessary, for services that were not provided, and 
for claims obtained by the payment of illegal kickbacks. 
 
TexasEgondu Kate Koko, a patient recruiter in Houston, was sentenced for her role in a 
$20 million scheme to pay illegal healthcare kickbacks to physicians and Medicare 
beneficiaries to fraudulently bill for medically unnecessary home health services, and to 
launder the proceeds.  Koko pleaded guilty to conspiracy to pay and receive healthcare 
kickbacks and conspiracy to launder monetary instruments.  As part of her guilty plea, Koko 
admitted to being a patient recruiter for Criseven Health Management, Beechwood Home 
Health, JMM Home Health and Trinity Healthcare Service, home health agencies that 
operated in the Houston area.  Koko was also the owner and operator of Circuit Wide 
Home Health Services, a home health company.  Koko admitted that she paid illegal 
kickbacks and bribes to physicians and patients for paperwork necessary for Criseven, 
Beechwood, JMM, Trinity, and Circuit Wide (collectively, the HHAs) to bill Medicare.  Koko 
admitted that she and her co-conspirators submitted and were paid more than $9.5 million 
in claims to Medicare for home health services purportedly provided by the HHAs.  Koko 
further admitted to committing money laundering by opening a bank account under the 
identity of Person A, a Nigerian national.  Koko transferred proceeds from her fraud on the 
United States from accounts controlled by Koko into the bank account of the Nigerian 
national.  To further the scheme, Koko purchased a home using the funds from the 
Nigerian nationals account, which were proceeds from the fraud.  Koko was sentenced to 
15 years and 8 months in prison and ordered to pay $12.9 million in restitution. 
 
43 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Physicians and Physician Practices 
The following case examples involve physicians and physician practices: 
 
MichiganDr. Zongli Chang and his co-conspirators engaged in an $18 million healthcare 
fraud scheme involving the illegal distribution of prescription drugs.  According to court 
documents, Chang wrote medically unnecessary and highly addictive controlled substance 
prescriptions, including prescriptions for hydrocodone-acetaminophen, oxycodone HCl, 
alprazolam, carisoprodol, and promethazine/codeine syrup, in return for cash payments.  
According to the indictment, Chang prescribed more than 2,700,000 dosage units of 
Schedule II, III, and IV controlled substances during the course of the conspiracy.  Chang 
used patient recruiters to bring fake patients to his office.  These recruiters paid cash to 
acquaintances to act as patients of Dr. Chang, and also paid Chang cash at each office visit 
for the prescriptions provided.  After a cursory examination or no examination at all, Chang 
always prescribed the requested controlled substances.  The patient recruiters ultimately 
took control of the controlled substances prescribed by Chang for illegal distribution in 
Michigan and elsewhere.  Dr. Chang pleaded guilty to conspiracy to distribute and possess 
with intent to distribute controlled substances and was sentenced to 11 years and 3 months 
in prison.  Six defendants involved in the scheme were previously sentenced to a combined 
8 years and 4 months in prison. 
 
KansasDr. Joseph P. Galichia and Galichia Medical Group, P.A. (GMED) entered into a 
settlement agreement with the United States and Relator Aly Gadalla, M.D., to resolve 
allegations that Dr. Galichia and GMED submitted, or caused to be submitted, false claims 
to Medicare, TRICARE, and the Federal Employees Health Benefits Program for cardiac 
stent procedures that were not medically necessary.  Galichia and GMED agreed to pay 
$5.8 million to resolve the allegations.  As a part of the settlement, Dr. Galichia also agreed 
to be excluded for 3 years. 
 
DME Companies 
The following case examples involve DME companies: 
 
MarylandACell, Inc., a small medical device manufacturer based in Maryland, entered 
into a $12 million civil settlement with the United States to resolve FCA liability associated 
with a wound dressing powder called MicroMatrix.  Through the civil settlement, ACell 
resolved allegations that it (1) promoted MicroMatrix in ways that were false and 
misleading, (2) provided inaccurate coding recommendations about MicroMatrix to 
hospitals, and (3) provided improper inducements to encourage healthcare providers to 
order ACell products.  The civil settlement was one component of a global resolution with 
ACell relating to MicroMatrix.  ACell also entered into a 5-year CIA with OIG as part of the 
resolution.  Finally, in June 2019, ACell pled guilty to criminal charges relating to its failure 
44 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
to notify the FDA about the removal of MicroMatrix product from hospitals and other 
healthcare centers in 2012.  In connection with the criminal plea, ACell agreed to pay a fine 
of $3 million. 
 
GeorgiaRoderic Bain, the CEO of a string of Savannah-based durable medical equipment 
companies was sentenced to 3 years and 4 months in prison for his role in a scheme that 
defrauded Medicare out of millions of dollars.  Bain, who had previously pled guilty to false 
statements relating to healthcare matters, was also ordered to pay more than $1.9 million in 
restitution.  Bain oversaw a multiyear scheme resulting in nearly $10 million in claims billed 
to Medicare.  Working with a number of others, Bain operated a network that paid 
kickbacks to obtain patient information, specifically that of Medicare patients.  Using a 
third-party biller, Bain would then bill Medicare Part B and Part C plans for medically 
unnecessary medical equipment and orthotics, including a variety of back and knee braces 
that were not ordered as medically necessary by a physician.  Bain also billed for equipment 
not provided and utilized sales representatives to promote equipment to Medicare patient 
utilizing the cold-calling method.  During the course of the investigation, agents 
determined Bain and his affiliates were linked to a larger nation-wide scheme, recently 
announced as Operation Brace Yourself.  Bain is the first defendant sentenced under the 
ongoing investigation. 
 
Inpatient Rehabilitation Facilities 
The following case example involves inpatient rehabilitation facilities: 
 
FloridaEncompass Health Corporation (formerly known as HealthSouth Corporation) 
(Encompass) entered into an FCA settlement agreement wherein Encompass agreed to pay 
$48 million to resolve allegations related to Encompasss submission of claims for care 
provided at inpatient rehabilitation facilities (IRFs) to Medicare and Medicaid.  Encompass 
owned and operated IRFs throughout the United States and provided care to beneficiaries 
covered by Medicare and Medicaid.  The United States alleged that: (1) Encompass 
provided inaccurate information on Patient Assessment Instrument forms (IRF-PAIs) for a 
class of patients Encompass improperly assigned to Impairment Group Code (IGC) 3.8, 
indicating the patients in that class required rehabilitation for neuromuscular disorders.  
Specifically, the United States alleged that certain patients were diagnosed with a 
myopathy, including disuse myopathy and proximal myopathy, and represented in IRF-PAIs 
by IGC 3.8 and etiologic diagnosis codes of 359.89 and G72.89, when not all such patients, 
in fact, had a myopathy.  The information contained on the IRF-PAI is used by CMS to 
determine whether or not IRFs are entitled to obtain or maintain classification as an IRF for 
reimbursement purposes.  As a result, the United States alleged that Encompass submitted 
false claims to Medicare and Medicaid by representing that some of the IRFs owned and/or 
operated by Encompass were appropriately classified as an IRF for Federal program 
reimbursement purposes when they were not; (2) Encompass, through its subsidiary IRFs, 
45 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
knowingly submitted false claims to Medicare and Medicaid by improperly causing the 
assignment of the class of patients described above to a Case Mix Group that provided 
reimbursement at a higher rate from Medicare than it was otherwise entitled to; and (3) 
Encompass knowingly submitted false claims to Medicare and Medicaid by admitting 
patients to its facilities for whom IRF services were not medically necessary pursuant to 42 
U.S.C.  1395y(a)(1)(A) and/or did not meet the IRF coverage criteria set forth in 42 C.F.R.  
412.622(a)(3); in particular, the United States alleged that Encompass IRFs admitted patients 
(1) who were too sick or disabled to be able to participate in and benefit from therapy; (2) 
for whom an intensive inpatient rehabilitation program was not medically necessary; (3) 
who did not require supervision by a rehabilitation physician at least three times a week; or 
(4) who did not need therapeutic intervention from multiple therapy disciplines. 
 
Skilled Nursing Facilities 
The following case examples involve skilled nursing facilities: 
 
CaliforniaFive Star Quality Care-CA, LLC, doing business as Van Nuys Healthcare Center 
(Van Nuys), entered into a settlement agreement with the Office of Inspector General (OIG) 
to resolve Van Nuys alleged liability under the Civil Monetary Penalties Law (CMPL) for its 
improper submission of claims to the Medicare and California Medicaid programs when its 
Director of Nursing and Minimum Data Set (MDS) Coordinator entered false Assessment 
Reference Dates on MDS reports required under 42 C.F.R.  413.343.  Van Nuys self-
disclosed this conduct pursuant to OIGs Provider Self-Disclosure Protocol, and agreed to 
pay $1,138,807.29 to resolve its CMPL liability. 
 
TennesseeVanguard Healthcare, LLC, and related facilities (collectively, Vanguard) 
entered into an FCA settlement to resolve allegations that from January 1, 2010, through 
December 31, 2015, Vanguard knowingly provided non-existent, grossly substandard, 
and/or worthless nursing home items and services to skilled nursing facility residents, and 
submitted claims for such items and services to Medicare and TennCare for reimbursement.  
The settlement agreement also resolves allegations that the settling parties submitted pre-
admission forms and resident reviews that contained forged physician and nurse signatures 
and certifications.  Vanguard agreed to pay over $18.8 million to resolve its potential 
liability and entered into a 5-year quality-of-care CIA. 
 
Medicare Fraud Strike Force Activities 
In 2007, Medicare Fraud Strike Force teams began an effort to combine resources of Federal, State, and 
local law enforcement entities to prevent and combat healthcare fraud, waste, and abuse.  These 
partnerships among OIG and HHS, DOJ, U.S. Attorneys Offices, the Federal Bureau of Investigation (FBI), 
and State and local law enforcement have a common goal: to successfully analyze healthcare fraud data 
and investigative intelligence to quickly identify fraud and bring prosecutions.  Strike Force teams operate 
46 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
in 11 areas: Miami and Tampa/Orlando, Florida; Dallas and Houston, Texas; Los Angeles, California; Detroit, 
Michigan; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; and Newark, 
New Jersey/Philadelphia, Pennsylvania; along with a Corporate Strike Force located in Washington, DC.  
During this semiannual reporting period, Strike Force efforts resulted in the filing of charges against 163 
individuals or entities, 79 criminal actions, and more than $130.2 million in investigative receivables. 
 
In April 2019, OIG and our law enforcement partners announced an investigation (known as Operation 
Brace Yourself) that dismantled a healthcare fraud scheme involving over $1.2 billion in losses.  In the 
alleged scheme, medical professionals working with fraudulent telemedicine companies received illegal 
kickbacks and bribes from medical equipment companies.  In exchange, the medical equipment 
companies obtained prescriptions for medically unnecessary orthotic braces and used them to fraudulently 
bill Medicare.  The operation led to charges against 24 defendants across 17 Federal districts. 
 
In April 2019, OIG and our law enforcement partners also led the first Appalachian Regional Opioid Strike 
Force Takedown.  The takedown resulted in enforcement actions involving 60 charged defendants across 
11 Federal districts, including 31 doctors, 7 pharmacists, 8 nurse practitioners, and 7 other licensed medical 
professionals, for their alleged participation in the illegal prescribing and distributing of opioids and other 
dangerous narcotics and for healthcare fraud schemes.  To ensure that patients impacted by law 
enforcement operations maintain continuity of care, this takedown coordinated an unprecedented public 
health response in partnership with the Drug Enforcement Administration, the Substance Abuse and 
Mental Health Services Administration (SAMHSA), CDC, and all impacted State Departments of Health. 
 
In September 2019, OIG and our Federal and State law enforcement partners announced Strike Force 
efforts in dismantling one of the largest healthcare fraud schemes ever charged.  The takedown has 
resulted in charges in 5 Federal districts against 35 defendants associated with dozens of telemedicine 
companies and cancer genetic testing (CGx) laboratories for their alleged participation.  According to the 
charges, these defendants fraudulently billed Medicare more than $2.1 billion for CGx tests.  Among those 
charged are 10 medical professionals, including 9 doctors.  The alleged scheme involved the payment of 
illegal kickbacks and bribes by CGx laboratories in exchange for the referral of Medicare beneficiaries by 
medical professionals working with fraudulent telemedicine companies for expensive cancer genetic tests 
that were medically unnecessary. 
 
During this semiannual reporting period, Strike Force efforts led to the following 11 regional takedowns: 
 
Operation  Date  Subject  Stastistics 
Telemedicine Takedown  4/11/2019  Orthotic Braces  24 criminal defendants 
(Operation Brace Yourself)  $1.2 billion in losses 
Appalachian Regional Opioid  4/17/2019  Opioids  60 criminal defendants 
Takedown  Over 32 million pills involved 
Houston Opioid Takedown  8/28/2019  Opioids and Medical  41 criminal defendants 
Professionals 
47 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
West Coast (L.A.) Takedown  9/18/2019  Healthcare Fraud  34 criminal defendants 
$258 million in losses 
Texas Strike Force/Rocky  9/18/2019  Opioids and Medical  58 criminal defendants 
Mountain Takedown  Professionals  $66 million in losses 
6.2 million pills involved 
Appalachian Regional Opioid  9/24/2019  Opioids    13 criminal defendants 
Takedown  Over 17 million pills involved 
Gulf Coast Takedown  9/25/2019  Compounding  33 criminal defendants 
Pharmacies  Over $515 million in losses 
Florida/Georgia Takedown   9/25/2019  Medical Professionals  83 criminal defendants 
Over $161 million in losses 
Northeast Regional  9/26/2019  Opioids and Medical  48 criminal defendants 
Takedown  Professionals  $800 million in losses 
3.25 million pills involved 
Midwest Takedown  9/27/2019  Medical Professionals  53 criminal defendants 
$250 million in losses 
Genetic Testing Takedown  9/27/2019  Genetic Testing and  35 criminal defendants 
Telemedicine  $2.1 billion in losses 
Professionals 
 
The following case examples involve Strike Force cases: 
 
FloridaPhilip Esformes and Arnaldo Carmouze were convicted for their role in the largest 
healthcare fraud scheme ever charged by DOJ, involving $1.3 billion in fraudulent claims.  
According to the investigation, Esformes led an extensive healthcare fraud conspiracy involving a 
network of assisted living facilities and SNFs that he owned.  Esformes bribed physicians to admit 
patients into his facilities, and then cycled the patients through his facilities, where they often failed 
to receive appropriate medical services, or received medically unnecessary services, which were 
then billed to Medicare and Medicaid.  Several witnesses testified to the poor conditions in the 
facilities and the inadequate care patients received, which Esformes was able to conceal from 
authorities by bribing an employee of a Florida state regulator for advance notice of surprise 
inspections scheduled to take place at his facilities.  Carmouze worked as a physicians assistant 
and facilitated the fraud scheme by prescribing medically unnecessary prescriptions for treatment 
at SNFs.  Carmouze pleaded guilty to conspiracy to commit healthcare fraud and wire fraud.  He 
was sentenced to 6 years and 8 months in prison, and was ordered to pay $12.5 million in 
restitution.  Six defendants involved in the scheme were previously sentenced to a combined 2 
years and 3 months in prison and ordered to pay $425,470.29.  Esformes was convicted by jury and 
was sentenced to 20 years in prison.  The amount of restitution due has not been determined yet. 
 
New YorkSvetlana Mazina and her co-conspirators engaged in a scheme to defraud Medicare.  
Mazina was an employee at Neponsit Medical PC, a medical clinic in New York City.  Mazina and 
others billed Medicare for medically unnecessary services and services not rendered.  Medicare 
48 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
beneficiaries were given cash payment, a kickback, to induce them to undergo medically 
unnecessary procedures, services, and tests.  Mazina pleaded guilty to conspiracy to defraud the 
United States and pay healthcare kickbacks, and was sentenced to time served.  Mazina was 
ordered to pay $3.6 million in restitution, joint and several.  Four defendants involved in the 
scheme were previously sentenced and ordered to pay $5.3 million, joint and several. 
 
Compliance Trainings 
Healthcare Provider Compliance Training  
OIG provides free training on our website for healthcare providers, compliance professionals, and 
attorneys.  OIGs Provider Compliance Training was an initiative developed in 2011 that continues to 
reach the healthcare community with OIGs message of compliance and prevention via free 
downloadable comprehensive training materials and podcasts.  OIGs provider compliance training 
resources can be accessed at https://oig.hhs.gov/compliance/compliance-guidance/index.asp. 
 
Indian Health and Human Services Compliance Training 
In addition to the May 2018 compliance and quality training held in Oklahoma for more than 200 
individuals representing IHS, Tribes, and Tribal healthcare and human services organizations, OIG 
participated throughout this semiannual reporting period in various HHS-sponsored conferences, 
providing training on fraud prevention, internal controls, and compliance.  OIG Indian health and 
human hervices compliance training resources can be accessed at https://oig.hhs.gov/AIAN. 
 
Most Wanted Fugitives List 
The OIG Most Wanted Fugitives website continues to garner national and international attention and has 
greatly assisted in helping to capture fugitives charged with defrauding Federal health care programs and 
stealing millions of taxpayer dollars.  The Most Wanted Fugitives website is continually updated and 
features a profile for each fugitive as well as an online tip form and a hotline number for individuals to 
report fugitive-related information to OIG, in English or Spanish, 24 hours a day, 365 days a year.  The 
Most Wanted Fugitives list can be accessed at https://oig.hhs.gov/fraud/fugitives/.  During this semiannual 
reporting period, six fugitives were captured. 
 
The following is a case example involving a captured fugitive: 
 
One of OIGs Most Wanted Fugitives, Juan Carlos Jaime, was captured during this reporting period.  
Jaime was involved in a scheme to fraudulently bill Medicare for services that were not medically 
necessary and were never provided.  Jaime has been a fugitive since 2016 and was believed to have 
absconded to his native Cubahe was recently picked up at Miami International Airport.  He is 
currently in U.S. custody and will face charges stemming from his indictment. 
 
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According to court documents, on or around April 2015 Juan Carlos Jaime became the Registered 
Agent, Secretary, and sole Director of A-Superior Home Health Agency (A-Superior) located in 
Miami, Florida.  Jaime obtained the names and Medicare numbers of Medicare beneficiaries so that 
he could submit fraudulent claims for home health services that were not medically necessary and 
were never provided.  Jaime also obtained the names and provider numbers of physicians to 
submit false claims to Medicare purportedly prescribed by a licensed physician.  As a result of 
these fraudulent claims, Medicare paid approximately $1.4 million to A-Superior.  In June 2016, 
Jaime was indicted on charges of healthcare fraud, and later pled guilty. 
 
HHS-OIG Hotline 
Part of OIGs Office of Investigations, the hotline is the public-facing division for OIGs intake and 
evaluation of fraud tips.  The mission of the HHS-OIG Hotline is to support OIGs oversight responsibilities 
in safeguarding the integrity of all programs and personnel under HHSs purview and protecting them 
from fraud, waste, and abuse.  The hotline achieves its mission through its staffs dedication to timely 
intake and analysis of information received from various sources, such as the Report Fraud link on the 
HHS-OIG website.  During this semiannual reporting period, the OIG Hotline reported expected recoveries 
of $8 million as a direct result of cases originating from hotline complaints. 
 
OIG Hotline Activity (4/1/20199/30/2019) 
Contacts to 1-800-HHS-TIPS phone line, including  81,762 
callers seeking information 
Total tips evaluated  21,146 
Tips referred for action  15,419 
Closed; no basis provided for further action  5,850  
Closed; no HHS violation  716 
 
Sources of tips referred for action 
Phone  5,431 
OIG website  7,695 
Letters or faxes  1,112 
Other  1,181 
 
50 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
State Medicaid Fraud Control Units 
OIG Oversight of State Medicaid Fraud Control Units 
State Medicaid Fraud Control Units (MFCUs) are key partners with OIG in the fight against fraud, 
waste, and abuse in State Medicaid programs.  OIG has oversight responsibility for MFCUs and 
administers grants that provide Federal funding for their operations.  Currently, all 50 States, the 
District of Columbia, Puerto Rico, and the U.S. Virgin Islands operate MFCUs.  In this reporting 
period, OIG certified a new MFCU in the State of North Dakota.  The Federal Government 
reimburses 90 percent of a MFCUs total expenditures during the first 3 years of operation and 
75 percent thereafter.  MFCUs investigate and prosecute Medicaid provider fraud and patient 
abuse and neglect in healthcare facilities or board and care facilities. 
 
OIG Onsite Reviews of MFCUs 
In addition to an annual recertification review of each MFCU, OIG conducts reviews of a sample of 
MFCUs.  OIG evaluates MFCU operations based on 12 performance standards and assesses 
compliance with laws, regulations, and OIG policy guidance.  During the reporting period, OIG 
issued reports of onsite reviews of the following MFCUs: 
 
Nevada State Medicaid Fraud Control Unit: 2018 Onsite Review (OEI-06-18-00190), June 2019 
 
Kansas State Medicaid Fraud Control Unit: 2018 Onsite Review (OEI-12-18-00210), July 2019 
 
Idaho Medicaid Fraud Control Unit: 2018 Onsite Inspection (OEI-12-18-00320), August 2019 
 
Utah Medicaid Fraud Control Unit: 2018 Onsite Inspection (OEI-09-18-00170), August 2019 
 
OIG Joint Casework with MFCUs 
The following case example involves OIGs joint efforts with MFCUs: 
 
West VirginiaCRC Health, LLC (CRC) and its parent corporation, Acadia Healthcare 
Corporation, (Acadia) agreed to pay $17 million to resolve allegations of a billing scheme 
that defrauded Medicaid of $8.5 million.  Specifically, the United States alleged that 
specified CRC outpatient drug treatment centers submitted claims to West Virginia 
Medicaid for moderate- to high-complexity urine drug tests as if they were performed by 
the CRC outpatient drug treatment centers when those centers did not have the proper 
laboratory certifications to perform that testing.  OIG partnered with the West Virginia 
MFCU in both the investigation and analysis of this matter.  Leveraging the cooperation 
and combined knowledge and expertise of OIG and West Virginias MFCU allowed the case 
to progress quickly and achieved an optimal outcome.  The settlement represents the 
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  Department of Health and Human Services Office of Inspector General 
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largest healthcare fraud settlement in the history of West Virginia.  CRC and Acadia agreed 
to enter into a Corporate Integrity Agreement with OIG as an element of the settlement. 
 
Advisory Opinions and Other Industry Guidance  
Advisory opinions, which are developed in consultation with DOJ, are issued to requesting parties 
regarding the interpretation and applicability of certain statutes relating to Federal health care programs.  
The Health Insurance Portability and Accountability Act of 1996 (HIPAA),  205, allows OIG to provide case-
specific formal guidance on the application of the anti-kickback statute and safe harbor provisions and 
other OIG healthcare fraud and abuse sanctions.  During FY 2019, OIG received 45 requests for advisory 
opinions and issued 9 advisory opinions.  
 
Sanction Authorities and Other Administrative Actions  
Various Federal laws provide authorities the ability to impose administrative sanctions for fraud and abuse 
as well as other activities that pose a risk to Federal health care programs and their beneficiaries.  
Sanctions include the exclusion of individuals and entities from Federal health care programs and the 
imposition of CMPs for submitting false and fraudulent claims to a Federal health care program or for 
violating the anti-kickback statute, the physician self-referral law (commonly referred to as the Stark Law), 
or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the patient dumping 
statute.  Sanctions also include referrals for suspension and debarment in cases of grant and contract 
fraud. 
 
During this semiannual reporting period, OIG imposed 1,452 administrative sanctions in the form of 
program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk 
to Federal health care programs and their beneficiaries.  
 
Exclusion and penalty authorities are described in Appendix D and on our website at 
http://oig.hhs.gov/fraud/enforcement/cmp/index.asp. 
 
Program Exclusions 
During this semiannual reporting period, OIG excluded 1,347 individuals and entities from 
Medicare, Medicaid, and other Federal health care programs.  Most of the exclusions resulted from 
convictions for crimes relating to Medicare or Medicaid, patient abuse or neglect, financial 
misconduct, controlled substances, or as a result of license revocation.  OIG completed the 
deployment of a new service for MFCUs to report convictions through a central web-based portal 
for exclusion.  OIG is also responsible for reinstating providers who apply and have met the 
requirements of their exclusions.  For a list of excluded individuals and entities, see 
https://exclusions.oig.hhs.gov/. 
 
The following are case examples of program exclusions: 
52 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
PennsylvaniaPediatrician Johnnie Barto was excluded for a minimum period of 75 years 
based on his conviction for indecent assault, corruption of minors, endangering the welfare 
of children, unlawful contact with minors and aggravated indecent assault.  Dr. Barto 
sexually assaulted 31 minor victims, most of them patients.  The court sentenced Dr. Barto 
to serve 79 to 158 years in prison.  In addition, the Pennsylvania State Board of Medicine 
suspended his license to practice as a medical doctor. 
 
TexasDaniela Gozes-Wagner, an employee of several testing facilities, was excluded for a 
minimum period of 50 years based on her conviction for conspiracy to commit healthcare 
fraud and conspiracy to commit money laundering.  Gozes-Wagner conspired with others 
to defraud Medicare and Medicaid by submitting claims for services that had not been 
performed or were not medically necessary.  As part of the scheme, Gozes-Wagner rented 
offices for testing facilities but kept the actual spaces empty.  No patients were seen, and 
no testing was performed at the offices.  To further deceive Medicare and Medicaid, Gozes-
Wagner hired people to pose as patients to sit in the empty offices and answer the phones 
as though the facility was open and operational.  The court sentenced Ms. Gozes-Wagner 
to 20 years in prison and ordered her to pay approximately $15.2 million in restitution.  
 
Suspensions and Debarments  
Suspensions and debarments are administrative tools used by HHS and other Federal agencies to 
protect the Government from individuals and entities that have engaged in contract fraud, have 
misused grant funds, or are otherwise not presently responsible.  Because these are 
Government-wide sanctions, an individual or entity that has been suspended or debarred by HHS 
or any other agency is ineligible to participate in any future funding opportunities across the 
Federal Government for a specified period of time. 
 
OIG refers individuals and entities that have potentially engaged in grant or contract fraud or 
misconduct to the HHS Suspension and Debarment Official, who is responsible for determining 
whether to impose a suspension or debarment.  OIG continues to develop a robust Suspension 
and Debarment program and uses this tool to protect Government programs against fraud, waste, 
poor performance, and noncompliance with contract provisions or applicable law.  
 
The following case examples involve debarment:  
 
MinnesotaFozia Shiek Ali was the controlling agent and program director of Salama 
Child Care Center (Salama).  Investigators found that Ali overbilled the State of Minnesota 
through the Child Care Assistance Program (CCAP), which receives funding from HHS.  It 
was found that Ali, through Salama, overbilled CCAP for more children than were actually 
receiving services or for more hours of services than were actually being provided.  Ali pled 
guilty to aiding and abetting theft of public funds and was sentenced to 2 years in prison 
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  Department of Health and Human Services Office of Inspector General 
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and ordered to pay $1.4 million in restitution.  Ali was debarred for a 3-year period based 
on an OIG referral to the Department. 
 
MissouriJames Shields II was the owner of Endless Possibilities and was licensed to 
provide childcare for 47 children.  OIs review of the single months attendance records 
obtained by OAS showed an overpayment of 38 percent.  The investigative review revealed 
that the center billed for (1) authorized children who were not in attendance on the dates 
claimed, (2) non-authorized children who were signed in at the center (and likely substituted 
for authorized children who were absent), and (3) weekend attendance on days the center 
was not open for business.  Shields also violated a number of program requirements for 
contractors approved by the State of Missouri to provide services to eligible families.  Shields 
pled guilty to false statements related to healthcare matters and was ordered to pay 
restitution of $52,265.  Shields was also barred from engaging in any employment involving 
accounting or financial responsibilities without prior approval from the Probation Office.  
Shields was debarred for a 3-year period based on an OIG referral to the Department. 
 
Civil Monetary Penalties Law 
The CMPL authorizes OIG to impose administrative penalties, assessments, and exclusions 
against a person who, among other things, submits, or causes to be submitted, claims to a 
Federal health care program that the person knows, or should know, are false or fraudulent.  
The exclusions statute also authorizes OIG to exclude a person who violates the CMPL.  During 
this semiannual reporting period, OIG concluded cases involving more than $30 million in 
CMPs and assessments. 
 
Affirmative Litigation 
The CMPL authorizes OIG to use its administrative remedies to affirmatively pursue cases.  OIG 
may also exclude under the exclusions statute for engaging in conduct that violates the CMPL.  
When OIG excludes under the exclusions statute for engaging in conduct that violates the 
CMPL, it is known as an affirmative exclusion. 
 
The following case examples involve affirmative litigation under the CMPL: 
   
KentuckyOn June 28, 2019, Ethos Laboratory (Ethos) entered into a $1,345,959.74 CMPL 
settlement agreement with OIG.  The settlement agreement resolves allegations that Ethos 
submitted claims to Medicare for specimen validity testing (SVT), a non-covered service.  
SVT is a quality control process that evaluates a urine drug screen sample to determine if it 
is consistent with normal human urine and to ensure that the sample has not been 
substituted, adulterated, or diluted.  
 
54 
 
 
  Department of Health and Human Services Office of Inspector General 
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FloridaMidland Medical, Inc., and its subsidiary, Midland Medical-Broward, Inc. 
(collectively, "Midland) entered into a $102,204 CMPL settlement agreement with OIG.  The 
settlement agreement resolves allegations that Midland received remuneration from 
laboratory companies Health Diagnostic Laboratory, Inc. (HDL) and Singulex, Inc. (Singulex), 
in the form of "process and handling" payments related to the collection of blood.  OIG 
alleged that Midland received the remuneration from HDL and Singulex in exchange for 
Midland and Midland employees referring patients for laboratory testing services to HDL 
and Singulex, for which the Medicare program paid. 
 
Patient Dumping  
Some of the CMPL cases that OIG resolved during this semiannual reporting period were pursued 
under EMTALA, a statute designed to prevent hospitals from denying emergency care to patients 
and to ensure patient access to appropriate emergency medical services. 
 
The following case examples involve EMTALA: 
 
FloridaOn May 6, 2019, Park Royal Hospital (Park Royal) entered into a $52,414 
settlement agreement with OIG.  The settlement agreement resolves allegations that, based 
on OIG's investigation, Park Royal violated EMTALA when it failed to accept a transfer of a 
patient with an unstablilized emergency medical condition, from the emergency 
department of another hospital.  The patient presented to that hospital's emergency 
department following a suicide attempt and was diagnosed with lacerations to the wrist 
and an emergency psychiatric condition.  Park Royal is a hospital with specialized 
psychiatric capabilities.  OIG alleged that Park Royal refused to accept a transfer of the 
patient, despite having the specialized capabilities to stabilize the patient and the capacity 
at the time of transfer, because the patient's insurance was out of network. 
 
North CarolinaOn June 26, 2019, Transylvania Regional Hospital (TRH), MH Transylvania 
Regional Hospital, LLLP, and Transylvania Community Hospital, Inc., entered into a $25,000 
settlement agreement with OIG.  The settlement agreement resolves allegations that, based 
on OIG's investigation, TRH violated the EMTALA when it failed to provide an adequate 
medical screening examination and stabilizing treatment for a patient.  The patient 
presented to TRH's emergency department complaining of abdominal pain and pain 
radiating bilaterally to his lower extremities.  In addition, the patient had an elevated blood 
pressure and respiratory rate.  Despite this presentment, TRH discharged the patient 
without providing an adequate medical screening examination or stabilizing treatment.  
The patient returned to TRH's emergency department later the same day via ambulance, 
complaining of paralysis of the lower extremities, leg pain, and leg swelling.  TRH ultimately 
transferred the patient to another hospital.  Under EMTALA, the maximum penalty for 
hospitals with fewer than 100 beds at time of this alleged violation was $25,000. 
 
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  Department of Health and Human Services Office of Inspector General 
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Self-Disclosure Programs  
Healthcare providers, suppliers, or other individuals or entities subject to CMPs can apply for 
acceptance into the Provider Self-Disclosure Protocol, a program created in 1998 for voluntary 
disclosure of self-discovered evidence of potential fraud.  The self-disclosure program may give 
providers the opportunity to avoid costs or disruptions associated with Government-directed 
investigations and civil or administrative litigation.  
 
Application processes for two additional self-disclosure programs were recently added to the OIG 
website for HHS contractors and grantees.  The OIG contractor self-disclosure program provides 
contractors the opportunity to self-disclose when they have potentially violated the FCA or other 
Federal criminal laws prohibiting fraud, conflict of interest, bribery, or gratuity.  This self-disclosure 
process is available only to those with a FAR-based contract with HHS.  The OIG Grant Self-
Disclosure Program is available for application by HHS grantees or HHS grant subrecipients and 
provides the opportunity for voluntary disclosure to OIG of potential fraud.  OIG evaluates the 
reported results of each internal investigation under the provider self-disclosure protocol to 
determine the appropriate course of action.  The self-disclosure guidelines are available on the OIG 
website at https://oig.hhs.gov/compliance/self-disclosure-info/index.asp.  During this semiannual 
reporting period, provider self-disclosure cases resulted in more than $28.6 million in HHS 
receivables. 
 
The following case example pertains to provider self-disclosure settlements: 
 
IowaAfter they self-disclosed conduct to OIG, Great River Health System, Inc. (GRHS), 
Great River Foundation (GRF), Riverview System, Inc. (RSI), Great River Medical Center 
(GRMC), and Great River Physicians and Clinics, Inc. (GRPC) agreed to pay $3,008,326.50 for 
allegedly violating the CMPL, including provisions applicable to kickbacks.  OIG alleged that 
GRHS, GRF, RSI, and GRPC paid remuneration to a physician in the form of excessive 
compensation in exchange for referrals.  OIG also alleged that GRHS, GRMC, and GRPC 
submitted or caused to be submitted false claims to Medicare, Medicaid, and Tricare for 
medically unnecessary and improperly coded hyperbaric oxygen therapy and wound care 
services provided by the physician. 
 
Corporate Integrity Agreements  
Many healthcare providers elect to settle their cases before litigation.  As part of the settlements, 
providers often agree to enter into CIAs with OIG to avoid exclusions from Medicare, Medicaid, 
and other Federal health care programs.  Under a CIA, a provider commits to establishing a 
program and taking other specified steps to ensure future compliance with Medicare and Medicaid 
rules.  The compliance programs are designed, in part, to prevent future fraud.  OIG monitors 
providers compliance with these agreements and may impose penalties on entities that fail to 
comply with the requirements of their CIAs. 
56 
 
 
  Department of Health and Human Services Office of Inspector General 
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The following case examples involve CIA enforcement: 
 
IndianaThe OIG excluded Tri-County Ambulance (Tri-County), for a period of 5 years 
based on a material breach of its CIA.  On November 9, 2018, OIG issued a letter 
demanding stipulated penalties of $25,000 based on Tri-County's failure to submit its 
Annual Report. After Tri-County failed to pay the stipulated penalties and cure the breach 
or request a hearing by an HHS Administrative Law Judge, OIG issued a notice of material 
breach and intent to exclude in January 2019.  Under the terms of the CIA, Tri-County had 
25 days to request a hearing with an Administrative Law Judge.  Tri-County did not request 
a hearing. OIG excluded Tri-County effective April 3, 2019.  
 
FloridaEffective August 31, 2015, North Broward Hospital District d/b/a Broward Health 
(Broward Health) entered into a CIA with HHS-OIG to promote compliance with the 
statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal 
health care programs.  On June 28, 2019, Broward Health paid a stipulated penalty of 
$690,000 for failing to comply with certain CIA requirements.  Specifically, Broward Health 
failed to (1) develop and implement written policies designed to promote compliance with 
the anti-kickback statute and the Stark Law, (2) provide all employees with general 
compliance training, (3) implement and comply with all of the arrangements procedures 
and arrangements requirements of the CIA, and (4) comply with certain disclosure program 
requirements. 
   
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Public Health and Human Service Agency 
Reports and Reviews  
Public Health Agency Reports and Reviews 
Agency for Healthcare Research and Quality 
Patient Safety Organizations: Hospital Participation, Value, and Challenges (OEI-01-17-00420), 
September 2019 
 
Nearly all hospitals that participate in the Patient Safety Organization (PSO) program find it 
valuable, but challenges with the program have slowed progress toward a national system of 
learning to improve patient safety.  Our findings can help the Agency for Healthcare Research and 
Quality (AHRQ) identify ways to strengthen its support and promotion of the PSO program. 
 
AHRQ concurred with our first and third recommendations and partially concurred with our second 
recommendation, which were to:  
  develop and execute a communications strategy to increase hospitals awareness of the 
program and its value to participants;  
  take steps to encourage PSOs to participate in the Network of Patient Safety Databases 
(NPSD), including accepting data into the NPSD in other formats in addition to the 
Common Formats; and  
  update guidance for PSOs on the processes for being approved by AHRQ for initial listing 
as a PSO and continued listing. 
 
Centers for Disease Control and Prevention 
The Centers for Disease Control and Preventions South Africa Office Generally Implemented Our 
Prior Audit Recommendation (A-04-18-01009), April 2019 
 
CDC-South Africa (CDC-SA) generally implemented corrective actions for the recommendation 
from our prior audit report.  CDC-SA provided documentation supporting that it had monitored 
most of its recipient cooperative agreements (CoAgs).  However, CDC-SA was still missing some 
documentation supporting its remaining monitoring activities.  In our current audit, three of the six 
CoAgs that CDC-SA monitors contained five monitoring activities that were not supported by 
documentation. 
 
The documentation deficiencies we identified occurred primarily because CDC-SA did not always 
use a CoAg tracking process, such as a grant file checklist, that staff members could fill out at the 
end of a CoAg budget period to ensure that CDC-SA had completed and filed in a timely manner 
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  Department of Health and Human Services Office of Inspector General 
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all required documentation of reviews.  Additionally, CDC-SA did not periodically review and 
update its standard operating procedures to include changes and specific procedures for 
monitoring the recipient CoAgs. 
 
CDC-SA concurred with our recommendations that it continue to strengthen its CoAg tracking 
process by consistently completing a grant file checklist at the end of the CoAgs budget period 
and update and review its SOPs annually to include specific and clear procedures when changes in 
control activities occur for monitoring recipient CoAgs. 
 
Food and Drug Administration 
The Food and Drug Administration Generally Complied With Federal Requirements for the 
Preparation and Receipt of Select Agent Shipments (A-03-16-00354), June 2019 
 
Generally, FDA has designed and put in place controls to ensure that select agent shipments are 
prepared and received in accordance with Federal regulations and related supporting laboratory 
guidance and instruction.  However, 8 of FDAs 11 registered entities security plans did not include 
certain procedures for notifying the Federal Select Agent Program (FSAP) if a select agent 
shipment is not received on time or receives damage, and none of FDAs registered entities 
security plans included certain procedures for notifying FSAP if an authorization for a select agent 
transfer expires or becomes void before the shipment is completed.  In addition, we found that 
FDAs registered entities did not always maintain required select agent training documentation and 
did not ensure compliance with all new requirements for shipping select agents that have 
undergone inactivation. 
 
FDA concurred with our recommendations that it update its registered entities security plans to 
include procedures for notifying FSAP if a select agent (1) shipment is not received within 48 hours 
after the expected time of delivery, (2) package is received damaged to the extent that a release of 
the select agent may have occurred, (3) shipment will not be completed within 30 calendar days 
after transfer authorization issuance, or (4) transfer authorization becomes void because the facts 
supporting the authorization changed.  We also made recommendations regarding FDAs select 
agent training documentation and policies for shipping inactivated select agents. 
 
Most Hospitals Obtain Compounded Drugs From Outsourcing Facilities, Which Must Meet FDA 
Quality Standards (OEI-01-17-00090), June 2019 
 
Most hospitals that obtained non-patient-specific compounded drugs from outside compounders 
obtained them from compounders registered with the FDA, known as outsourcing facilities.  
Factors associated with quality, including registration with FDA as an outsourcing facility, are 
among the most important factors considered when hospitals decide where to obtain their non-
patient-specific compounded drugs.  Few hospitals consider registering their own pharmacies as 
outsourcing facilities.  Patient safety is advanced when hospitals obtain compounded drugs from 
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  Department of Health and Human Services Office of Inspector General 
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outsourcing facilities that are registered with FDA because those facilities are subject to regular 
FDA oversight and must adhere to current good manufacturing practices. 
 
FDA concurred with all of our recommendations, which were to: 
  further communicate with hospitals about the importance of obtaining their NPS 
compounded drugs from outsourcing facilities, and  
  take appropriate followup actions with unregistered compounding facilities on a list that we 
provided based on our survey of hospitals. 
 
The Food and Drug Administration Did Not Submit Clearance Documents for Any Audit 
Recommendations During Fiscal Years 2015 and 2016 but Has Since Made Significant Progress 
(A-07-18-03231), August 2019 
 
FDAs audit resolution guidelines did not address the submission of clearance documents to OIG.  
As a result, FDA did not submit any clearance documents within the required 6-month resolution 
period.  Also, FDA did not perform periodic, formal reconciliations between OIGs stewardship 
reports and its own audit resolution records. 
 
Without resolving all audit recommendations in a timely manner, FDA runs the risk of 
noncompliance with Federal requirements and mismanagement of Federal funds.  The prompt 
resolution of audit recommendations helps ensure that Federal funds are effectively and efficiently 
used to carry out the activities for which they were authorized. 
 
FDA concurred with all of our recommendations that it finalize and implement formal policies and 
procedures for the resolution of audit recommendations, promptly resolve the 32 remaining 
recommendations that were past due as of September 30, 2016, and reconcile each month OIGs 
audit resolution information with FDAs audit resolution records and follow up on any differences 
noted.  Since our audit period, FDA has made significant progress in resolving audit 
recommendations. 
 
Indian Health Service 
IHS Needs To Improve Oversight of Its Hospitals Opioid Prescribing and Dispensing Practices and 
Consider Centralizing Its Information Technology Functions (A-18-17-11400), July 2019 
 
The IHS hospitals we reviewed did not always follow the Indian Health Manual when prescribing 
and dispensing opioids.  Through our patient record review, we found that hospitals did not always 
review the course of patient treatment and causes of pain within required timeframes, perform the 
required urine drug screenings within recommended time intervals, review patient health records 
before filling a prescription from a non-IHS provider, or maintain pain management documents to 
support that provider responsibilities had been performed.  We also found that these IHS hospitals 
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  Department of Health and Human Services Office of Inspector General 
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did not fully use the States prescription drug monitoring programs when prescribing or dispensing 
opioids. 
 
IHSs decentralized IT management structure led to vulnerabilities and weaknesses in implementing 
security controls at all five hospitals.  IHSs controls were not effective at preventing or detecting 
our penetration test cyberattacks.  In addition, the hospitals implemented IT security controls to 
protect health information and patient safety differently.  As a result, IHS hospital operations and 
delivery of patient care could have been significantly affected. 
 
IHS concurred with our procedural recommendations and our recommendations that it work with 
hospitals to ensure that they follow the Indian Health Manual when prescribing and dispensing 
opioids and that it consider centralizing its IT systems, services, and functions by conducting a 
cost-benefit analysis of adopting a cloud computing policy, including centralization of IT systems, 
services, and functions. 
 
Case Study: Indian Health Service Management of Rosebud Hospital Emergency Department Closure 
and Reopening (OEI-06-17-00270), July 2019 
 
We found that IHS closed the Rosebud Hospital emergency department in December 2015, due to 
immediate jeopardy (IJ) deficiencies and staffing shortages.  IHS diverted Rosebud patients to the 
nearest hospitals but did not provide the hospitals or the emergency medical services (EMS) 
adequate time to prepare.  IHS reopened the emergency department in July 2016, but Rosebud 
Hospital was again cited with an IJ-related deficiency in the emergency department in July 2018.  
Longstanding problems at Rosebud Hospital remain a concern, including difficulty recruiting and 
retaining staff and frequent changes in leadership. 
 
IHS concurred with all of our recommendations, which were to: 
  develop and implement, as a management priority, a staffing program for recruiting, 
retaining, and transitioning staff and leadership to remote hospitals; 
  enhance training and orientation for new hospital leaders to ensure that they follow IHS 
directives and continue improvement efforts; 
  continue to take steps to ensure early and effective intervention when IHS identifies 
problems at hospitals; and 
  develop procedures for temporary emergency department closures and communicate 
those procedures with receiving hospitals and EMS. 
 
Organizational Challenges to Improving Quality of Care in Indian Health Service Hospitals 
(OEI-06-16-00390), August 2019 
 
We found three core organizational challenges that, if not addressed, could continue to limit the 
IHSs ability to improve hospital operations and quality of care.  First, IHS lacks formal structure, 
policies, and roles.  IHS officials reported that they were often uncertain about their roles and those 
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of other officials, including the authority to act in correcting problems.  The absence of clear roles 
was especially problematic with regard to the roles of IHS headquarters and Area Offices.  Second, 
IHS lacks awareness and insight about Area Office and hospital performance, and IHSs 
organizational culture does not always encourage candid discussion of problems.  Third, IHS 
officials lack confidence in the agencys ability to succeed.  IHS officials consistently expressed a 
deep commitment to and passion for the agencys mission and beneficiaries, but also expressed 
doubt in the agencys ability to make sustained improvements. 
 
To address these underlying organizational challenges, IHS should incorporate the strategies we 
outline as it implements its new plans to improve hospital quality and agency operations.  
Specifically, IHS officials need to support an agency structure that outlines policies and roles; 
cultivate a culture of continuous learning to support sustained improvements; and inspire greater 
confidence in the agencys capacity to overcome longstanding challenges.  Additionally, in other 
evaluations OIG has recommended specific actions for improving quality in IHS hospitals, such as 
establishing a comprehensive compliance program focused on quality of care.  We continue to 
urge IHS to implement those recommendations. 
 
National Institutes of Health 
The National Institutes of Health Could Improve Its Monitoring To Ensure That an Awardee of the All 
of Us Research Program Had Adequate Cybersecurity Controls To Protect Participants Sensitive Data 
(A-18-17-09304), June 2019 
 
The Participant Technology Systems Center (PTSC) did not have adequate controls to protect the 
sensitive data of participants in the All of Us Research Program (All of Us).  NIH did not adequately 
monitor the PTSC to ensure that the PTSC had implemented adequate cybersecurity controls to 
protect the participants sensitive data.  On the basis of the results of our penetration testing at the 
PTSC, we identified vulnerabilities that could expose personally identifiable information, including 
personal health information of the All of Us participants, and allow access to their data.  These 
vulnerabilities could have allowed an attacker with limited technical knowledge to exploit and 
compromise the PTSCs systems, as most of the vulnerabilities did not require significant technical 
knowledge to exploit.  In addition, the PTSC failed to encrypt its cloud storage.  The PTSC did not 
have policies and procedures to address remediating source code vulnerabilities and timely 
disabling of network access.  Finally, the PTSC did not adequately scan its network.  We did not 
identify any general control vulnerabilities at the Data and Research Center. 
 
During the audit, NIH and the PTSC addressed and remediated all of the vulnerabilities we 
identified. 
 
NIH generally concurred with our recommendations that it revise its All of Us cooperative 
agreements and cooperative agreements with security and privacy requirements to include a 
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  Department of Health and Human Services Office of Inspector General 
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detailed description of how NIH will monitor cybersecurity and ensure that future awardees 
adequately implement security controls to protect sensitive data. 
 
The National Institutes of Health Administered Superfund Appropriations During Fiscal Year 2016 in 
Accordance With Federal Requirements (A-04-18-04065), June 2019 
 
During FY 2016, NIH administered Superfund appropriations in accordance with applicable Federal 
requirements.  NIH obligated and disbursed Superfund appropriations in accordance with Federal 
requirements and in similar proportions to prior years.  In addition, the Institutes monitoring of 
Superfund grants generally ensured that grantees met requirements for financial, performance, 
and audit reporting.  This report contains no recommendations. 
 
The National Institutes of Health Has Limited Policies, Procedures, and Controls in Place for Helping 
To Ensure That Institutions Report All Sources of Research Support, Financial Interests, and Affiliations 
(A-03-19-03003), September 2019 
 
NIH has limited policies, procedures, and controls in place for helping to ensure that institutions 
report all sources of research support, financial interests, and affiliations.  Although no Federal 
regulation requires NIH to proactively ensure that each investigator has disclosed all sources of 
research support, financial interests, and affiliations, NIH is responsible for overseeing institutional 
compliance with the regulations. 
   
Not all NIH-funded investigators may be aware that they are required to disclose FCOIs with 
regards to research support, financial interests, and affiliations.  Although NIH has conducted 
outreach and provided technical assistance regarding FCOI policy requirements, some institutions 
stated that they were not aware of their responsibility to create and maintain FCOI policies. 
 
NIH stated the report conflated reporting requirements for research support and affiliations with 
reporting requirements for FCOIs but concurred with our recommendations that it (1) ensure that 
the 1,013 institutions identified by this review as not having FCOI policies on their website post 
those FCOI policies as required, (2) enhance its FCOI monitoring program to ensure that 
institutions resolve identified deficiencies and to review all grantee websites to ensure that FCOI 
policies are publicly accessible, and (3) implement procedures to ensure that all institutions that are 
required to have FCOI policies have FCOI policies. 
 
NIH Has Made Strides in Reviewing Financial Conflicts of Interest in Extramural Research, but Could 
Do More (OEI-03-19-00150), September 2019 
 
Over the past decade, NIH has strengthened its reporting requirements and developed an online 
system for collecting, reviewing, and storing the FCOIs that extramural grantee institutions report 
for their research investigators.  Overall, 3 percent of NIH grants in FY 2018 had investigators with 
financial conflicts.  These grants received $1 billion in funding during FY 2018, and institutions 
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reported a total of 2,755 financial conflicts.  Although NIH has made substantial strides in reviewing 
the financial conflicts that institutions report, we found inconsistencies in the depth of its oversight 
reviews.  Across the three NIH Institutes and Centers that we reviewed, staff differed in the level of 
scrutiny they applied to their review of financial conflicts.  Furthermore, NIH lacks quality assurance 
procedures in its review process.  Lastly, NIH cannot identifyand does not plan to identify
whether investigators financial conflicts involve foreign interests; instead, it is identifying foreign 
affiliations through a clarification of its requirements for pre-award reporting. 
 
NIH concurred with both of our recommendations, which were to: 
  perform periodic quality assurance reviews of the financial-conflict information in its online 
system to ensure the adequacy of its oversight, and   
  use information regarding foreign affiliations and support that it collects during the pre-
award reporting process to decide whether to revise its financial-conflict review process to 
address concerns regarding foreign threats. 
 
Vetting Peer Reviewers at NIHs Center for Scientific Review: Strengths and Limitations 
(OEI-01-19-00160), September 2019 
 
NIHs Center for Scientific Review (CSR) has strengths in its approach to vetting peer reviewer 
nominees ability to be effective peer reviewers.  However, beyond requiring a justification for 
reviewers who are not based in North America, CSR gives little attention to foreign affiliation in its 
vetting of peer reviewer nominees.  In August 2018, the Director of NIH raised concerns that peer 
reviewers were, in some cases, inappropriately sharing confidential information with foreign 
entities.  NIH concurred with our recommendations, which were to: 
  update its guidance on vetting peer reviewer nominees to identify potential foreign threats 
to research integrity, in consultation with national security experts, as needed; and 
  work with the HHS Office of National Security to develop a risk-based approach for 
identifying those peer reviewer nominees who warrant additional vetting. 
 
Substance Abuse and Mental Health Services Administration 
The Substance Abuse and Mental Health Services Administration Resolved Approximately One-Third 
of Its Audit Recommendations, None in Accordance With Federal Timeframe Requirements (A-07-19-
03233), July 2019 
 
SAMHSA did not resolve audit recommendations in a timely manner during FYs 2015 and 2016.  
SAMHSA resolved 104 of the 292 audit recommendations that were outstanding during FYs 2015 
and 2016.  However, it did not resolve any of the 104 recommendations within the required 6-
month resolution period.  In addition, as of September 30, 2016, SAMHSA had not resolved 188 
audit recommendations that were past due for resolution.  These 188 past-due recommendations 
were procedural; none of them involved dollar amounts such as recommended disallowances. 
 
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  Department of Health and Human Services Office of Inspector General 
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As of July 1, 2015, SAMHSA had draft policies and procedures in place (which were orally conveyed 
to its staff before that date) to ensure that audit recommendations were resolved in compliance 
with Federal requirements but did not generally follow them.  As a result, SAMHSA did not issue 
any management decisions (and submit the related clearance documents to OIG) within the 
required 6-month resolution period.  In addition, SAMHSAs policies and procedures had not been 
finalized at the time of our audit work, and SAMHSA did not perform periodic reconciliations with 
OIGs stewardship reports. 
 
SAMHSA concurred with our recommendations that it finalize and follow its policies and 
procedures related to the audit resolution process, promptly resolve the 188 outstanding audit 
recommendations that were past due as of September 30, 2016, and reconcile each month the 
appropriate OIG or HHS records with SAMHSAs audit resolution records and follow up on any 
differences noted. 
 
Human Services Agency Reports and Reviews 
Administration for Children and Families 
The Childrens Village, Inc., an Administration for Children and Families Grantee, Did Not Always 
Comply with Applicable Federal and State Policies and Requirements (A-02-16-02013), April 2019 
 
The Childrens Village, Inc. (Childrens Village), a UAC Program grantee responsible for caring for 
children in ORR custody, failed to meet or properly document that it had met certain requirements 
for the care and release of children in its custody in 46 of the 50 case files reviewed.  Additionally, 
the files for 2 of 20 employees did not contain evidence that Childrens Village had performed all 
required background checks. 
 
In addition, Childrens Village claimed unallowable expenditures totaling at least $2.6 million 
related to transactions that were not properly approved, allocated, or supported.  Finally, Childrens 
Village did not disburse drawdowns of Federal funds in a timely manner, drew down funds from 
one UAC Program grant to cover expenditures related to its other UAC Program grant, and did not 
separately track expenditures for its two UAC grants. 
 
Childrens Village generally concurred with our procedural recommendations, including that it 
ensure that its facility is free from potentially harmful conditions and implement improvements to 
its financial management system.  Childrens Village did not concur with our recommendation that 
it refund to the Federal Government $2.6 million in unallowable grant expenditures. 
 
Southwest Key Did Not Have Adequate Controls in Place To Secure Personally Identifiable 
Information Under the Unaccompanied Alien Children Program (A-18-18-06001), August 2019 
 
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  Department of Health and Human Services Office of Inspector General 
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Southwest Key had not implemented an adequate information systems security program to protect 
the personally identifiable information (PII) of UAC.  Southwest Key officials explained that they 
were unaware of information systems security requirements from ORR or other Federal 
requirements.  Based on the control areas we reviewed, we determined that Southwest Keys 
security program lacked several fundamental security controls needed to protect the 
confidentiality, integrity, and availability of UAC Program PII.  Without fundamental information 
systems security controls (e.g., having an information systems security officer, a risk assessment, 
and an information systems security awareness training program), Southwest Key management 
cannot ensure that it has established a control environment that meets minimal information 
security requirements as required by Federal regulations to safeguard the UAC Program PII from 
both internal and external threats. 
 
Southwest Key, while disputing the corresponding findings, generally concurred with the spirit of 
our recommendations that it develop and implement an information systems security program in 
accordance with Federal requirements and that it communicate with ORR, ACF, and HHS to obtain 
Federal security requirements and guidance to improve its security posture and protect UAC PII. 
 
Southwest Key Programs Did Not Always Comply With Health and Safety Requirements for the 
Unaccompanied Alien Children Program (A-06-17-07005), August 2019 
 
Southwest Key did not meet or properly document that it met certain safety standards for the care 
or release of some children in its custody.  Additionally, we found that Southwest Key was unable 
to support the number of reunifications reported to ORR for FFY 2016. 
 
Based on our UAC case file sample review results, we estimated that Southwest Key did not 
properly document the care or release of 38 percent of all children released to sponsors in FY 2016.  
Without adequate documentation in the UAC case files, ORR could not be assured that for 8,323 
children, Southwest Key had followed ORR policies regarding sponsor background checks and 
prompt care or that DHS was notified about a childs release to a sponsor.  Finally, we determined 
that some Southwest Key employee and volunteer files we reviewed were missing evidence of 
required background checks. 
 
Southwest Key generally concurred with our recommendations that it comply with ORR regulations 
pertaining to (1) video monitoring in common areas, (2) sponsor and other household members 
background checks, (3) admission/intake assessments and medical exams, (4) discharge 
notifications to DHS and other stakeholders, and (5) safety and well-being followup calls.  We also 
recommended that Southwest Key ensure that information reported to ORR is accurate.  The 
report also contains other procedural recommendations for Southwest Key to operate its UAC 
Program in accordance with Federal and State requirements. 
 
States Payment Rates Under the Child Care and Development Fund Program Could Limit Access to 
Child Care Providers (OEI-03-15-00170), August 2019 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
 
We found that the majority of child care providers charge more for infant care than States 
payment rates, which could limit access to care for Child Care and Development Fund (CCDF) 
families.  Operating with finite resources, States must balance competing priorities and perform 
tradeoffs between raising payment rates to providers, serving eligible families, and ensuring 
compliance with program requirements.  ACF does not evaluate States payment rates, nor does it 
determine whether States have ensured equal access to child care services for eligible families.  
Only seven States set payment rates at the level that ACF recommends for ensuring equal access.  
The majority of States have implemented provider-friendly payment practices, such as paying 
providers timely, to incentivize providers to participate in the CCDF program and ensure access for 
eligible families.  However, some providers still report concerns about payment amounts, payment 
frequencies, and other administrative burdens associated with CCDF program participation. 
 
ACF concurred with all of our recommendations, which were to: 
  evaluate whether States are ensuring equal access for CCDF families, as required; 
  ensure that States comply with the new requirement to use the results of the most recent 
market-rate survey, or alternative methodology, to set CCDF payment rates; 
  establish a forum for States to share strategies regarding how they set payment rates to 
ensure equal access for eligible families while balancing competing program priorities; and 
  encourage States to minimize administrative burdens for CCDF providers, with a goal of 
expanding access for eligible families. 
 
Unaccompanied Alien Children Care Provider Facilities Generally Conducted Required Background 
Checks but Faced Challenges in Hiring, Screening, and Retaining Employees (A-12-19-20001), 
September 2019 
 
ORR, a Program Office of ACF, manages the UAC Program.  In general, facilities serving UAC met a 
range of background checks and qualification requirements designed to keep individuals who may 
pose a risk to the safety and well-being of children from having direct access to children.  However, 
some facilities did not have evidence of the required the FBI fingerprint or Child Protective Services 
(CPS) check results and did not always ensure that the out-of-State CPS checks were conducted.  In 
addition, we found that over half of the facilities we reviewed allowed employees to begin 
employment before receiving the results of the FBI fingerprint check, the CPS check, or both.  (ORR 
issued guidance to address this in March 2019.)  In addition to the compliance-related issues, ORR 
granted six facilities a waiver from conducting the CPS check for employees with direct access to 
children.  
From our review of employee qualifications, we found that most facilities hired mental health 
clinicians who met ORR education requirements; however, many facilities hired case managers who 
did not.  In addition, facilities had difficulty maintaining required staffing ratios because of 
challenges experienced in screening, hiring, and retaining qualified employees. 
 
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  Department of Health and Human Services Office of Inspector General 
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We made several recommendations to ORR to improve UAC Program operations related to 
background checks, education requirements, staffing ratios, and waivers of CPS checks.  ACF 
concurred with our recommendations and outlined corrective actions it had taken or plans to take 
to address the findings identified in the report. 
 
Care Provider Facilities Described Challenges Addressing Mental Health Needs of Children in HHS 
Custody (OEI-09-18-00431), September 2019 
 
OIG found that facilities struggled to address the mental health needs of children who had 
experienced intense trauma and had difficulty accessing specialized treatment for children who 
needed it.  Facilities reported that challenges employing mental health clinicians resulted in high 
caseloads and limited their effectiveness in addressing children's needs.  Facilities also reported 
challenges accessing external mental health care providers and transferring children to facilities 
within ORR's network that provide specialized treatment.  Policy changes in 2018 exacerbated these 
concerns, as they resulted in longer stays in ORR custody and a rapid increase in the number of 
younger children-many of whom had been separated from their parents after entering the United 
States. 
 
ACF concurred with our six recommendations for practical steps that ORR can take to assist 
facilities.  ORR should provide facilities with evidence-based guidance on addressing trauma in 
short-term therapy.  ORR should also develop strategies for overcoming obstacles to hiring and 
retaining qualified mental health clinicians and consider maximum caseloads for individual 
clinicians.  Finally, ORR should address gaps in options for children who require more specialized 
treatment and take all reasonable steps to minimize the amount of time that children remain in 
ORR custody. 
 
The Next Door Foundation Claimed Unallowable Indirect Costs and Did Not Document the Funding 
Source of Program Expenditures in Accordance With Federal Requirements (A-05-18-00008), 
September 2019 
 
The Next Door Foundation (NDF) did not always claim and account for HHS grant funds in 
accordance with Federal requirements.  We identified unallowable claims for indirect costs totaling 
$142,104.  We also identified other costs totaling $15,618 that did not fully meet Federal 
requirements but were related to the purpose of the grant.  These costs included $9,968 for 
contractual services and $5,650 for cost transfers.  In addition, NDFs financial management system 
was not in compliance with Federal regulations.  NDF claimed unallowable costs because it did not 
always follow its policies and procedures for claiming and accounting for HHS grant funds.   
 
NDF partly agreed and partly disagreed with our recommendations that it (1) refund $142,104 in 
unallowable indirect costs and work with its HHS funding agencies to ensure proper claiming of 
indirect costs, (2) ensure that contractual agreements are signed and in place before services are 
provided, (3) ensure that cost transfers meet applicable criteria and are fully documented, and (4) 
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  Department of Health and Human Services Office of Inspector General 
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ensure that the financial management system accurately matches expenditures with the source of 
funds. 
 
Safety of Children in Foster Care 
All Six States Reviewed Had Partially Implemented New Criminal Background Check Requirements 
for Childcare Providers, and Five of the States Anticipate Full Implementation by Fiscal Year 2020  
(A-05-19-00015), August 2019 
 
All six States reviewed (Colorado, Georgia, Illinois, Nevada, New Hampshire, and New York) had 
implemented some of the new criminal background check requirements established under the 
Child Care and Development Block Grant Act of 2014 as of March and October 2018.  Five of the six 
States anticipate full implementation by FY 2020.  However, certain criminal background check 
requirements for childcare providers remained unimplemented, and significant challenges may 
delay full implementation.  These challenges included data system limitations, insufficient funds 
and staff to process the criminal background checks, and delays associated with making required 
changes to State laws or policies and procedures. 
 
ACF concurred with our recommendations that it (1) continue to monitor the States actions and 
progress toward implementation of the new background check requirements and (2) continue to 
work with States and Federal partners to ensure that all remaining background check requirements 
are implemented. 
 
Low-Income Home Energy Assistance Program 
The Administration for Children and Families Should Improve the Oversight of Tribal Grantees Low-
Income Home Energy Assistance Programs (A-07-17-04105), August 2019 
 
ACFs oversight of the Low-Income Home Energy Assistance Program (LIHEAP) did not ensure that 
grant funds were (1) used to provide the maximum available LIHEAP benefits to eligible households 
and (2) consistently administered in accordance with Federal laws, regulations, and guidance.  
ACFs oversight of Tribal grantees focused on the reporting of obligated funds and not on whether 
the grantees had adequate policies and procedures to ensure that they used obligated funds to 
provide the maximum available LIHEAP benefits to eligible households.  Furthermore, ACF selected 
only a limited number of Tribal grantees for onsite compliance reviews each year.  These reviews 
did not ensure that grantees complied with Federal regulations.  ACF did not have adequate 
policies and procedures to effectively oversee the Tribal grantees LIHEAP grants. 
 
We made a series of procedural recommendations to ACF, including that it enhance its policies and 
procedures for the Tribal grantees use of obligated funds, review the grantees reports and their 
policies and procedures, and expand its program monitoring activities. 
 
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  Department of Health and Human Services Office of Inspector General 
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ACF concurred with most of our recommendations.  It did not concur with part of one 
recommendation that dealt with the timing of the return of grant funds from home energy 
suppliers to the Tribal grantees and with our recommendation to continue to expand its program 
monitoring activities. 
 
Administration for Community Living 
Although the Administration for Community Living Resolved Nearly All Audit Recommendations, 
It Did Not Always Do So in Accordance With Federal Timeframe Requirements (A-07-18-03232),  
April 2019 
ACL did not always resolve audit recommendations in a timely manner during FYs 2015 and 2016.  
Specifically, it did not resolve 34 of the 65 recommendations (52.3 percent) within the required 6-
month resolution period.  In addition, as of September 30, 2016, ACL had not resolved six audit 
recommendations that were past due for resolution.  These recommendations were procedural in 
nature; none of them involved dollar amounts such as recommended disallowances. 
ACL did not always follow policies and procedures in place to ensure that audit recommendations 
were resolved in compliance with Federal requirements.  Although ACL did not always issue 
management decisions and submit the related clearance documents to OIG within the required 6-
month resolution period, ACL has made progress in this respect by increasing the percentage of 
audit recommendations that were resolved in a timely manner. 
ACL concurred with our recommendation that it follow its policies and procedures related to the 
audit resolution process.  ACL did not directly concur with our recommendation that it promptly 
resolve the six outstanding audit recommendations that were past due as of September 30, 2016, 
but it described corrective actions that it had taken related to both recommendations. 
The Administration for Community Living Failed To Conduct Any of the Required Onsite Compliance 
Reviews of Independent Living Programs (A-05-18-00034), August 2019 
 
ACL did not appropriately oversee the activities of two independent living programs.  Specifically, 
as of the audit date, ACL had not conducted any onsite compliance reviews of either the Centers 
for Independent Living program or the Independent Living Services program since beginning its 
oversight of the programs in July 2014. 
 
Although ACL conducted some monitoring activities, ACLs comprehensive and targeted desk 
reviews did not include any onsite compliance reviews of the programs as of December 31, 2018.  
ACL was appropriated $156.6 million for independent living program services during the audit 
period.  Of this amount, ACL awarded $151.4 million to grantees for independent living program 
services.  However, ACL did not allocate sufficient funds to support onsite compliance reviews. 
 
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  Department of Health and Human Services Office of Inspector General 
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ACL officials said that they were unable to conduct onsite compliance reviews because of limited 
travel funding.  Without the required onsite compliance reviews, there is no assurance that 
independent living programs are effectively working to maximize the independence, well-being, 
and health of older adults, people with disabilities, and the families and caregivers of both. 
 
ACL generally did not state whether it concurred with our recommendations that it determine 
whether it can allocate its funds differently to enable onsite compliance reviews, seek additional 
department funding or resources to conduct the onsite compliance reviews, and perform required 
onsite compliance reviews of independent living programs. 
 
Health Resources and Services Administration 
The Health Resources and Services Administration Resolved All of Its Audit Recommendations, With 
Over 99 Percent Resolved in Accordance With Federal Timeliness Requirements (A-07-19-03235), 
August 2019 
 
HRSA resolved all of its audit recommendations during FYs 2015 and 2016, nearly all of them in a 
timely manner.  Of the 1,434 audit recommendations that HRSA resolved during FYs 2015 and 2016, 
1,427 (99.5 percent) were resolved within the required 6-month period.  All of the other seven 
recommendations (0.5 percent) that were not resolved within the 6-month resolution period were 
resolved within 21 days or less of the end of that resolution period. 
 
HRSA had policies and procedures in place to ensure that audit recommendations were resolved in 
compliance with Federal requirements, which require resolution of audit recommendations within 6 
months of the audit reports issuance date.  HRSA consistently followed these policies and 
procedures, and as a result, it issued nearly all management decisions and submitted nearly all of 
the related clearance documents to OIG within the required 6-month resolution period.  In 
addition, HRSA performed reconciliations between its records and the OIG stewardship reports and 
followed up with OIG on differences when they were noted.  According to HRSA officials, timely 
audit resolution is a very high priority. 
 
Because HRSA was substantially in compliance with Federal audit resolution requirements, this 
report contains no recommendations. 
   
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Legal and Investigative Activities Related to 
Public Health and Human Service Agencies 
Health Education Assistance Loan Program Exclusions 
OIG excludes from Federal health care programs individuals who have defaulted on Health Education 
Assistance Loan (HEAL) loans.  Under the HEAL program, which stopped making loans in 1998, the Health 
Resources and Services Administration (HRSA) guaranteed commercial loans to students seeking 
education in health-related fields.  The students can defer repayment of the loans until after they graduate 
and begin to earn income.  Although HHSs Program Support Center (PSC) takes steps to ensure 
repayment, some loan recipients do not resolve their debt.  After PSC has exhausted efforts to secure 
repayment of a debt, it declares an individual in default.  The Social Security Act permits that thereafter, 
such individuals may not receive reimbursement under Medicare, Medicaid, and all other Federal health 
care programs for nonpayment of the loans. 
 
During this semiannual reporting period, 16 individuals and related entities were excluded because of a 
PSC referral of their cases to OIG.  Individuals who have been excluded because of default may enter into 
settlement agreements whereby the exclusions are stayed while they pay specified amounts each month to 
satisfy their debts.  If they default on these settlement agreements, they may be excluded until the entire 
debt is repaid, and they may not appeal the exclusions.  Of that amount, one individual was excluded as a 
result of a default on a settlement agreement.   
 
After being excluded for nonpayment of their HEAL debts, 2,802 individuals chose to enter into settlement 
agreements or completely repay their debts.  That figure includes 23 individuals who entered into such 
settlement agreements or completely repaid their debts.  More than $224.7 million is being repaid through 
settlement agreements or through complete repayment.  Of that amount, more than $3.2 million is 
attributable to this semiannual reporting period. 
 
The following examples are settlement agreements.  These practitioners entered into settlement 
agreements to repay the amounts indicated: 
 
New YorkRenee Wasserman, Podiatrist$886,827 
 
AlabamaRussell Douglas Alexander, Medical Doctor$86,432 
 
72 
 
 
  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
Child Support Enforcement Activities 
OIG Investigations 
OIG investigates noncustodial parents who violate 18 U.S.C.  228 by failing to pay court-ordered 
child support.  OIG works with ACFs Office of Child Support Enforcement; DOJ; U.S. Attorneys 
Offices; the U.S. Marshals Service; and Federal, State, and local partners to address egregious child 
support enforcement cases with appropriate law enforcement and prosecutorial action.  During this 
semiannual reporting period, OIG investigations of child support enforcement cases nation-wide 
resulted in 6 criminal actions and court-ordered restitution and settlements of $648,240.   
 
The following case examples involve child support enforcement: 
 
New JerseyIn August 2002, Robert Whitley was ordered to pay child support payments 
of $229.50 per week for support of two children.  Whitley only sporadically made payments 
to the custodial parent of his children, and last made a payment in 2011.  Whitley pleaded 
guilty to failure to pay legal child support obligations and was ordered to pay $191,673.83 
in restitution. 
 
South DakotaIn October 2003, Joseph Mesteth was ordered to pay child support 
payments of $455 per month for support of three children.  Mesteth only sporadically 
made payments to the custodial parent of his children.  Mesteth pleaded guilty to failure to 
pay legal child support and was ordered to pay $104,160.81 in restitution. 
 
Engaging the Public in Capturing Deadbeat Parents 
Because of the success of OIGs Most Wanted Fugitives website, OIG launched its Most Wanted 
Deadbeat Parents website.  The site identifies parents who fail to pay court-ordered child support 
for their children and thereby put an unnecessary strain on the custodial parents and the children 
as well as on agencies that enforce these matters.  The site, which is updated frequently, includes 
information on OIGs role in pursuing parents who fail to pay court-ordered child support.  OIGs 
Most Wanted Deadbeat Parents website can be found at https://oig.hhs.gov/fraud/child-support-
enforcement/index.asp. 
   
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  Department of Health and Human Services Office of Inspector General 
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Other HHS-Related Reviews and Investigative 
Activities 
General Departmental 
HHS Did Not Always Efficiently Plan and Coordinate Its International Ebola Response Efforts 
(A-04-16-03567), August 2019 
 
HHS made significant contributions to controlling the Ebola crisis during 2014 and 2015 and was 
ultimately effective in helping to stop the spread of Ebola.  However, HHS had no strategic 
framework in place to coordinate global health security at the international or departmental levels 
before the Ebola outbreak, was not prepared to deploy the resources needed for a large-scale 
international response, and did not have in place internal or external communication channels for 
responding to an international public health emergency. 
 
HHSs response efforts were further complicated by external factors: the World Health 
Organization did not declare the epidemic an emergency until well after the epidemic had 
significantly expanded in West Africa, and Congress did not provide supplemental funding until 
HHSs response was well underway. 
 
Without effective internal controls that include a department-wide strategic framework for 
responding to an international health crisis, HHS may continue to inefficiently plan and coordinate 
its international response efforts in future health crises. 
 
HHS concurred with our recommendations that it (1) develop department-wide objectives and a 
strategic framework for responding to international public health emergencies, (2) develop policies 
and procedures that clearly define HHS components roles and responsibilities for responding to 
international public health emergencies, (3) develop large-scale international response plans, (4) 
develop various means of obtaining and using quality data for decision making, and (5) work with 
other U.S. Government agencies to develop a flexible multiagency international response 
framework. 
 
Department of Health and Human Services Had Email Requirements for Political Appointees, but 
Office of the Secretary Lacked Effective Monitoring and Enforcement (A-18-18-11050),  
September 2019 
 
HHS had some controls in place to restrict and monitor the use of personal email accounts to 
conduct government business, in accordance with Federal laws and regulations, as well as policies 
and procedures to preserve all government emails on official email systems.  However, three of the 
five HHS agencies or offices we audited did not have automated controls in place to block 
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  Department of Health and Human Services Office of Inspector General 
Semiannual Report to CongressApril 1, 2019, through September 30, 2019
 
 
employees from accessing personal email accounts while logged into HHS, Office of the Secretary 
(OS), or OpDiv networks.  In addition, we found that OS did not ensure that all political appointees 
received security awareness training due to improper listing and classification of the political 
appointees. 
 
HHS concurred with our recommendations that (1) HHS implement a policy requiring all HHS 
agencies and offices to implement automated controls to block employees from accessing 
personal email accounts from HHS networks; (2) OS implement a process to ensure that all OS 
political appointees, employees, and contractors complete the required security awareness 
trainings in a timely manner; and (3) OS implement procedures to ensure that its staff are properly 
listed and classified as political appointees, employees, contractors, and supervisors. 
 
Grants and Contracts 
HHS is the largest grant-making organization and one of the largest contracting agencies in the Federal 
Government.  In FY 2019, HHS awarded more than $559 billion in grants and over $26 billion in contracts 
across all program areas.  OIGs direct annual discretionary appropriation funding is used to conduct 
program integrity and enforcement activities with regard to the more than 100 public health and human 
services programs carried out by more than 80,00 employees around the world.  The size and scope of 
departmental awards make their operating effectiveness crucial to the success of programs designed to 
improve the health and well-being of the public. 
 
Grant Fraud Investigations 
The following case example relates to misuse of grant funds: 
 
New MexicoPecos Valley Medical Center, Inc. (PVMC) entered into a settlement 
agreement with OIG to resolve its liability under the CMPL, 42 U.S.C.  1320a-7a(o), 
stemming from allegations that PVMC knowingly presented to HHS a specified claim under 
an HHS grant that PVMC knew or should have known was false or fraudulent.  Specifically, 
PVMC made seven drawdowns from a HRSA Health Infrastructure Investment Grant 
between October and December 2017 and used the funds for unallowable operating costs 
not related to the grant. 
 
Contract Fraud Investigations 
The following case example relates to misuse of contract funds: 
 
MarylandCuram Software Ltd. and Curam Software, Inc. (collectively, Curam), and 
International Business Machines Corporation (IBM) (Curam and IBM are collectively referred 
to as Curam-IBM) entered into a settlement agreement with the United States.  In 
December 2011, in response to a request for proposals (RFP) from the State of Maryland, 
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acting through the Maryland Health Benefit Exchange (MHBE), Noridian Administrative 
Services, LLC (Noridian) submitted a proposal to support the Maryland Health Insurance 
Exchange (HIX) eligibility and enrollment system.  The proposal was drafted in part by 
Curam and included Curam as a subcontractor providing software and services.  IBM 
acquired Curam on December 19, 2011, after Noridian made its proposal but before the 
subcontract was awarded.  The proposal (and information provided in subsequent 
meetings) included statements regarding the commercial off-the-shelf (COTS) status of 
Curam software and its existing and intended functionality to meet specific requirements 
listed in the RFP.  The State of Maryland, through the MHBE, awarded the contract to 
Noridian on February 22, 2012, and Curam-IBM served as Noridians subcontractor.  After 
repeated problems following the launch of the HIX website in October 2013, the State of 
Maryland terminated the Noridian contract and replaced the HIX website and IT platform, 
including the Curam software.  The United States alleges that Curam-IBM has FCA liability 
for fraudulently inducing an award of the contract by misrepresenting the functionality of 
the software.  It is alleged that Curam-IBM represented that they had a COTS product that 
could be implemented in a timely manner with minimal modification.  Instead, the product 
did not have the functionality that was promised and required a lot more work, time, and 
money to implement. 
 
Small Business Innovative Research Program  
The National Defense Authorization Act for Fiscal Year 2012,  5143, requires OIG to report annually 
on the number of cases referred to OIG to fraud, waste, or abuse in the Small Business Innovation 
Research/Small Business Technology Transfer (SBIR/STTR) program.  OIG must also report on the 
actions taken in each case; justification for not taking action on a case; and an accounting of funds 
used to address waste, fraud, and abuse in this program.  In our December 2018 report delivered to 
the three congressional oversight committees, we reported that OIG spent approximately $392,837 
in salaries on oversight related to the SBIR/STTR program. 
 
Recovery Act Retaliation Complaint Investigations  
The Recovery Act,  1553, prohibits non-Federal employers that have received Recovery Act 
funding from retaliating against employees who disclose evidence of mismanagement of Recovery 
Act funds or any violation of law related to Recovery Act funds.  OIGs are required to include in 
their Semiannual Report the retaliation complaint investigations that they decided not to conduct 
or continue during the reporting period.  During this semiannual reporting period, OIG did not 
close, decline, or give extensions on any investigations of whistleblower retaliation. 
 
Contract Audits 
Pursuant to the National Defense Authorization Act for FY 2008,  845, OIGs appointed under the 
Inspector General Act of 1978 are required to submit, as part of their semiannual report, pursuant 
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to section 5 of the Inspector General Act, information on final completed contract audit reports 
issued during the period to the contracting activity.  This information must contain significant audit 
findings. 
 
OIG Reviews of Non-Federal Audits  
OIG reviews audits conducted by non-Federal auditors of entities receiving Federal awards.  During 
this semiannual reporting period, OIGs National External Audit Review Center reviewed 158 reports 
covering $2.1 trillion in audited costs.  Federal dollars covered by these audits totaled $674 billion, 
of which about $377 billion were HHS funds. 
Office of Management and Budget (OMB) Circular A-133 and the more recent uniform guidance at 
2CFR200 Subpart F establishes audit requirements for State and local governments, colleges and 
universities, and nonprofit organizations receiving Federal awards.  Under the circular and uniform 
guidance, covered entities must conduct annual organization-wide single audits of all Federal 
money they receive.  These audits are conducted by non-Federal auditors, such as public 
accounting firms and State auditors.  OIG reviews the quality of these audits and assesses the 
adequacy of the entities management of Federal funds. 
OIGs oversight of non-Federal audit activity informs Federal managers about the soundness of 
management of Federal programs and identifies any significant areas of internal control weakness, 
noncompliance, and questioned costs for resolution or followup.  We identify entities for high-risk 
monitoring, alert program officials to any trends that could indicate problems in HHS programs, 
and profile non-Federal audit findings of a particular program or activity over time to identify 
systemic problems.  We also provide training and technical assistance to grantees and members of 
the auditing profession.  OIG maintains a process to assess the quality of the non-Federal reports 
received and the audit work that supports the selected reports. 
OIGs reports on non-Federal audits reviewed during this reporting period are categorized in the 
following table. 
 
Non-Federal Audits, April 1, 2019, Through September 30, 2019 
 
Not requiring changes or having minor changes   156 
Requiring major changes  1 
Having significant technical inadequacies  1 
Total Number of Non-Federal Audits  158 
 
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Other Reporting Requirements and Reviews  
Legislative and Regulatory Reviews  
Pursuant to the Inspector General Act,  4(a)(2), OIG is required to review existing and proposed 
legislation and regulations relating to HHSs programs and operations and make recommendations 
concerning their impact on economy and efficiency or the prevention and detection of fraud and 
abuse.  Most audits and other reviews that we conduct are designed to test compliance with 
and/or assess the administration and oversight of existing laws and regulations.  Our reports of 
such reviews describe findings, which include questioned costs, inefficiencies, vulnerabilities to 
fraud, inconsistencies, errors in application, or weaknesses in oversight or supporting systems.  Our 
corresponding recommendations tell HHS and its operating or staff divisions what administrative, 
regulatory, or legislative actions we believe are needed to effectively respond to the findings.  Our 
regularly published core publications reflect the relationship between our work and laws and 
regulations. 
 
  Our Semiannual Report to Congress describes findings and recommendations from recently 
completed reviews, many of which focus on existing laws and regulations.   
  Our Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations describes priority findings and recommendations from past periods that 
remain to be implemented.   
  Our Work Plan provides citations to laws and regulations that are the subject of ongoing or 
future reviews. 
We also review proposed legislation and regulations related to HHS programs and operations.  In 
addition, we provide independent, objective technical assistance on a bipartisan, bicameral basis to 
congressional committees and members who request it. 
   
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Appendix A: Questioned Costs and Funds To 
Be Put to Better Use 
The following tables summarize OIGs monetary recommendations and HHS responses to them.  This 
information is provided in accordance with the Inspector General Act,  5(a)(8) and (a)(9) (5 U.S.C. App.  
5(a)(8) and (a)(9)), and the Supplemental Appropriations and Rescissions Act of 1980.  
 
Audit Reports With Questioned Costs 
As defined by the IG Act, the term questioned cost means a cost that is questioned by OIG because of: 
(1) an alleged violation of a provision of law, regulation, contract, grant, cooperative agreement, or other 
agreement or document governing the expenditure of funds; (2) a cost that is not supported by adequate 
documentation at the time of the audit; or (3) the expenditure of funds for the intended purpose is 
unnecessary or unreasonable.  Questioned costs that HHS program officials have, in a management 
decision, sustained or agreed should not be charged to the Government are disallowed costs. 
 
Table 1: Audit Reports With Questioned Costs 
Number of  Dollar Value  Dollar Value 
Description  Reports  Questioned  Unsupported 
Section 1          
Reports for which no management decisions had 
been made by the beginning of the reporting 
period1  124  $1,895,594,000  $512,492,000 
Issued during the reporting period  32  $666,549,000  $51,163,000 
Total Section 1  156  $2,562,143,000  $563,655,000 
Section 2        
Reports for which management decisions were 
made during the reporting period2, 3        
Disallowed costs  95  *$322,724,000  $495,000 
Costs not disallowed  6  $33,449,000  $0 
Total Section 2  101  $356,173,000  $495,000 
*Audit receivables (expected recoveries)       
Section 3       
Reports for which no management decisions had 
been made by the end of the reporting period 
(Section 1 minus Section 2)  55  $2,205,970,000  $563,160,000 
Section 4       
Reports for which no management decisions were   
made within 6 months of issuance4  27  $1,608,663,000  $511,997,000 
 
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Table 1 End Notes 
1 The opening balance was adjusted upward by $127.7 million because of a reevaluation of previously 
issued recommendations.  
2 Revisions to previously reported management decisions: 
  A-01-14-00001, Review of Medicaid Payments for Targeted Case Management Services in Connecticut.  
Subsequent review by CMS determined that the original finding amount was mitigated through rate 
adjustments resulting in a decreased previously sustained amount by $20,049,886. 
 
  A-07-14-06050, Physician Administered Drug Rebate ReviewColorado.  Subsequent review by CMS 
determined that the original sustained cost should have been $317,343.  The dissallowed cost was 
reduced by $6,420,952 due to a CMS miscalculation. 
 
  A-10-14-25191, State of Oregon.  ACF increased the sustained amount by $3,393,350 due to the receipt 
of additional documentation. 
 
  A-05-16-00064, Medicare Compliance Review of the University of Michigan Health System for 2014 and 
2015.  OIG and CMS agreed to re-calculate the overpayment estimates based on already known 
settlement results.  As a result, the sustained amount was reduced by $2,800,850.  
 
  Not detailed are reductions to previously disallowed management decisions totaling $3.7 million.   
3 Included are management decisions to disallow $119 million in questioned costs that were identified by 
non-Federal auditors in audits of State and local governments, colleges and universities, and nonprofit 
organizations receiving Federal awards conducted in accordance with Office of Management and Budget 
Circular A-133.  OIG is currently ensuring that work performed by these non-Federal auditors complies with 
Federal audit standards; accordingly, OIG tracks, resolves, and reports on recommendations in these audits. 
4 Because of administrative delays, some of which were beyond management control, resolution of the 
following 27 audits were not completed within 6 months of issuance of the reports; however, agency 
management has informed us that the agency is working to resolve the outstanding recommendations 
before the end of the next semiannual reporting period. 
 
Audits Not Completed Within 6 Months of Issuance 
Audit CIN  Audit Title 
A-02-15-02013  CMS Did Not Always Accurately Authorize Financial Assistance Payments to Qualified 
Health Plan Issuers in Accordance With Federal Requirements During the 2014 Benefit 
Year, August 2018, $939,287,686 
A-02-15-01010  New Jersey Claimed Hundreds of Millions in Unallowable or Unsupported Medicaid 
School-Based Reimbursement, November 2017, $300,452,930 
A-02-14-02017  New York Misallocated Costs to Establishment Grants for A Health Insurance 
Marketplace, November 2016, $149,654,512 
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A-09-17-03035  Medicare Improperly Paid Suppliers for Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies Provided to Beneficiaries During Inpatient Stays, 
November 2018, $34,014,796 
  A-02-16-02007  Lincoln Hall Boys Haven, an Administration for Children and Families Grantee, Did Not 
  Always Comply With Applicable Federal and State Policies and Requirements, 
February 2019, $29,807,160 
A-01-14-02503  Maryland Misallocated Millions to Establishment Grants for a Health Insurance 
Marketplace, March 2015, $28,400,000 
A-04-14-07050  Kentucky Misallocated Millions to Establishment Grants for a Health Insurance 
Marketplace, February 2017, $25,530,429 
A-02-15-02008  New York Did Not Comply With Federal Grant Requirements for Allocating and 
Claiming Marketplace Contract Costs, December 2017, $20,415,344 
A-01-17-00506  Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility 
Consolidated Billing Requirements, February 2019, $19,979,573 
A-07-15-04226  Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal and 
State Requirements, November 2017, $19,076,167 
A-01-15-02500  Vermont Did Not Properly Allocate Millions to Establishment Grants for A Health 
Insurance Marketplace, September 2016, $11,243,006 
A-02-14-02024  Newark Preschool Council, Inc., Did Not Always Comply With Head Start Requirements, 
February 2017, $9,950,556 
A-02-16-02012  CDC Reimbursed Contractors For Some Unallowable World Trade Center Health 
Program Administrative Costs, February 2019, $8,066,551 
A-07-17-02808  The Colorado Health Insurance Marketplaces Financial Management System Did Not 
Always Comply With Federal Requirements, July 2018, $2,567,604 
A-02-17-02009  New York Did Not Provide Adequate Stewardship of Substance Abuse Prevention and 
Treatment Block Grant Funds, March 2019, $1,800,212 
A-07-11-06013  The University of Colorado Denver Did Not Always Claim Selected Costs Charged 
Directly to Department of Health and Human Services Awards In Accordance With 
Federal Regulations, June 2013, $1,419,524 
A-05-14-00045  The Minnesota Marketplace Misallocated Federal Funds and Claimed Unallowable 
Costs, November 2016, $1,279,677 
A-07-16-04230  The Three Affiliated Tribes Improperly Administered Low-Income Home Energy 
Assistance Program Funds for FYs 2010 through 2014, July 2017, $1,221,425 
A-09-14-01007  Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to Its 
Establishment Grants, February 2016, $893,464 
  A-05-16-00038  Heartland Human Care Services, Inc. Generally Met Safety Standards, but Claimed 
Unallowable Rental Costs, September 2018, $768,460 
A-06-16-07007  BCFS Health and Human Services Did Not Always Comply With Federal Requirements 
Related to Less-Than-Arm's Length Leases, February 2018, $658,248 
A-07-16-04233  The Turtle Mountain Band of Chippewa Indians Improperly Administered Some Low-
Income Home Energy Assistance Program Funds for Fiscal Years 2010 Through 2013, 
September 2017, $587,248 
A-07-18-04106  The Fort Peck Assiniboine and Sioux Tribes Improperly Administered Some Low-Income 
Home Energy Assistance Program Funds for Fiscal Years 2011 Through 2015, 
August 2018, $436,765 
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A-04-13-01024  The University Of North Carolina at Chapel Hill Did Not Always Claim Selected Costs 
Charged Directly to Department of Health and Human Services Awards in Accordance 
With Federal Requirements, June 2014, $352,843 
A-09-17-01002  Florence Crittenton Services of Orange County, Inc., Did Not Always Claim Expenditures 
in Accordance With Federal Requirements, October 2018, $342,263 
A-12-17-00002  The Office of the Secretary of Health and Human Services Did Not Comply With 
Federal Regulations for Chartered Aircraft and Other Government Travel Related to 
Former Secretary Price, July 2018, $341,616 
A-06-11-00058  Crowley's Ridge Development Council, Inc., Claimed Unallowable Costs Under a 
Recovery Act Grant, August 2012, $115,420 
TOTAL CINS: 27  
TOTAL AMOUNT: $1,608,663,000 
 
 
Audit Reports With Funds Recommended To Be Put to Better Use 
The phrase recommendations that funds be put to better use means that funds could be used more 
efficiently if management took action to implement an OIG recommendation through reductions in 
outlays, deobligation of funds, and/or avoidance of unnecessary expenditures.  Table 2 reports HHS 
program officials decisions to take action on these audit recommendations.   
 
Table 2: Audit Reports With Funds Put to Better Use 
Number of 
Description  Reports  Dollar Value 
Section 1       
Reports for which no management decisions had been made by 
the beginning of the reporting period1  6  $15,275,825,000 
Reports issued during the reporting period  6  $573,037,000 
Total Section 1  12  $15,848,862,000 
Section 2     
Reports for which management decisions were made during the 
reporting period     
Value of recommendations agreed to by management     
Based on proposed management action  2  $223,749,000 
Based on proposed legislative action  0  $0 
Value of recommendations not agreed to by management    $0 
Total Section 2  2  $223,749,000 
Section 3     
Reports for which no management decisions had been made by 
the end of the reporting period2 (Sec. 1 minus Sec. 2)  10  $15,625,113,000 
 
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Table 2 End Notes 
1 The opening balance was adjusted down by $37 million because of a reevalution of previously issued 
recommendations. 
2 Because of administrative delays, some of which were beyond management control, 4 of the 10 audits open at end 
of the period were not resolved within 6 months of issuance of reports.  OIG is working with management to reach 
resolution on these recommendations before the end of the next semiannual reporting period. 
 
Audits Open at End of the Period 
 
Audit CIN  Audit Title 
  A-05-12-00020  Medicare And Beneficiaries Could Save Billions If CMS Reduces Hospital Outpatient 
Department Payment Rates for Ambulatory Surgical Center-Approved Procedures to 
 
Ambulatory Surgical Center Payment Rates, April 2014, $15,000,000,000 
  A-03-13-03002  HHS Did Not Identify and Report Antideficiency Act Violations, May 2017, $49,445,025 
 
A-05-13-00015  The Minnesota Medicaid Program Could Significantly Lower Payment Rates For Select 
 
Durable Equipment and Medical Supplies, January 2014, $2,268,928 
  A-02-16-02012  CDC Reimbursed Contractors for Some Unallowable World Trade Center Health 
Program Administrative Costs, February 2019, $362,324 
 
TOTAL CINS: 4 
 
TOTAL AMOUNT: $15,052,076,000 
 
   
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Appendix B: Savings Decisions Supported by 
OIG Recommendations 
The table below lists policy decisions reflected in legislation, regulations, or other directives from prior 
years that are supported by OIG recommendations and for which cost savings were estimated, usually by 
third parties, such as the Congressional Budget Office (CBO) or HHS actuaries.  Of the $150.5 billion in 
savings estimated for the decisions below, $27.5 billion was attributed to FY 2019.  This figure reflects the 
most recent available savings estimates issued by the third-party appraiser; actual savings may be higher 
or lower.   
 
After laws involving HHS programs are enacted, OIG analyzes the laws to identify the provisions that 
comport with our prior recommendations, that is, whether our recommendations support the decisions 
that were made.  A similar process occurs with respect to administrative decisions in regulations or other 
directives or agreements (e.g., modifications to Medicaid State Plans).  Most of the decisions reported in 
this appendix reflect ways in which funds could be put to better use, such as reductions in Federal 
spending or the avoidance of unnecessary or inappropriate expenditures, or both.   
 
To quantify the value of administrative decisions, we use estimates developed by, or in consultation with, 
HHS operating or staff divisions.  To quantify the value of legislative decisions, we generally use estimates 
developed by CBO.  CBO projects the annual increases or reductions in Federal spending that it expects 
would result from enacting the legislation.  The policy decisions shown on the table beginning on the next 
page mirror not only OIGs recommendations but also the contributions of others, such as HHS staff and 
OpDivs, congressional committees, and the GAO.  
 
Centers for Medicare & Medicaid Services Programs 
OIG Recommendations  Policy Decisions  Estimated 
Savings 
(millions) 
Hospital Transfer Policy for Early  Section 53109 of the Bipartisan Budget Act of 2018  $485 
Discharges to Hospice Care  modified existing law to require that, beginning in 
Change regulations or pursue a  FY 2019, discharges to hospice care would also 
legislative change, if necessary, to  qualify as a postacute care transfer and be subject 
establish a hospital transfer payment  to payment adjustments. 
policy for early discharges to hospice 
care.  The recommendation reflected 
findings in OIG report A-01-12-00507. 
Medicare Part C Prepayments  Section 3201 of the ACA changed the Medicare  $25,000  
Modify monthly capitated payments to  Advantage benchmark percentages that are applied 
a level fully supported by empirical  to Medicare fee-for-service and imposed a cap on 
the benchmarks, resulting in cost savings for 
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data.  The recommendation reflected  Medicare Part C as compared to prior law.  CBO 
findings in OIG report A-14-00-00212.   estimated Part C savings through FY 2019, including 
$23.2 billion for FY 2018.  CBO produced its 
estimate in 2010, prior to two significant 
implementation decisions by HHS that affect the 
actual savings; however, neither CBO nor HHS has 
calculated a revised estimate. 
Reductions in Medicare Bad Debt  Section 3201 of the Middle Class Tax Extension and  $1,300 
Reimbursement    Job Creation Act of 2012 applied percentage 
Seek legislative authority to eliminate  reductions in bad debt reimbursement to all 
(or reduce) Medicare payments to  providers eligible to receive bad debt 
hospitals for bad debt associated with  reimbursement.  CMS estimated savings to 
beneficiaries failure to pay their  Medicare of $10.92 billion over 10 years with $1.21 
deductibles and coinsurance.  The  billion attributed to FY 2018.  (77 Fed. Reg. 67450, 
recommendations reflected findings in  67523 (November 9, 2012)) 
OIG report A-14-90-00339 and 
subsequent reviews. 
Payments for Prescription Drugs  CMS issued a final rule about the Contract Year  $152 
Provided to Incarcerated  2015 Policy and Technical Changes to the Medicare 
Beneficiaries    Advantage and the Medicare Prescription Drug 
Work with prescription drug plan  programs.  The eligibility requirements to enroll in 
sponsors to identify and resolve  Medicare Advantage and Part D are outlined in 
improper Medicare Part D payments  Sections 1851(a)(3)(B) and 1860D-1(a)(3)(A) of the 
made for prescription drugs provided  Act.  To enroll in Medicare Advantage, a beneficiary 
to incarcerated beneficiaries.  The  must be entitled to Part A and enrolled in Part B.  
recommendation reflected findings in  To enroll in Part D, a beneficiary must be entitled to 
OIG report A-07-12-06035.  Part A and/or enrolled in Part B.  An incarcerated 
beneficiary is not precluded from meeting the 
eligibility requirements for Part A and Part B, but in 
general, no Medicare Payment is made for these 
individuals.  CMS promulgated regulations to 
require Part D plans to disenroll incarcerated 
beneficiaries.  CMS estimated savings of $1.6 billion 
over 10 years with $129 million attributed to FY 
2018.  (79 Fed. Reg. 29844, 29953 (May 23, 2014)) 
Medicare Payments for Vacuum  Section 203 of the Achieving A Better Life  $44.4 
Erection Systems    Experience Act of 2014 implements changes to treat 
Seek legislative authority to include  VES prosthetic devices and related accessories as 
vacuum erection systems (VES) in the  statutorily noncovered in the same manner that 
Competitive Bidding program and then  erectile dysfunction drugs are treated in Medicare 
implement a National Mail-Order  Part D.  CBO estimated savings of $444 million over 
Competitive Bidding Program for VES.   10 years. 
The recommendation reflected 
findings in OIG report A-07-12-05024. 
Additional Rebates for Brand-Name  Section 2501(d) of the ACA, as amended by section  $300 
Drugs with Multiple Versions    1206(a) of the Health Care and Education 
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OIG recommended that CMS continue  Reconciliation Act of 2010, addresses this issue.  
to seek legislative authority to modify  CBO estimated savings of $300 million for FY 2018.   
the rebate formula calculation to 
ensure that manufacturers cannot 
circumvent additional rebates by 
bringing new versions of existing 
brand-name drugs to market.  The 
recommendation reflected findings in 
OIG report A-06-09-00033. 
Medicaid Provider Reimbursement  In December 2015, the Consolidated Appropriations  $95 
for Durable Medical Equipment  Act, 2016 section 503, Congress added section 
OIG recommended that CMS seek  1903(i)(27) to the Social Security Act (the Act) which 
legislative authority to limit State  prohibits federal Medicaid reimbursement to States 
Medicaid DME reimbursement rates to  for certain DME expenditures that are, in the 
Medicare program rates and  aggregate, in excess of what Medicare would have 
encourage further reduction of  paid for such items.  The requirement was 
Medicaid reimbursement rates through  scheduled to effect January 1, 2019.  The 21st 
competitive bidding or manufacturer  Century Cures Act Section 5002 moved up the 
rebates.  OIG also recommended that  effective date to January 1, 2018, when it was passed 
that CMS work with State Medicaid  in December 2016.  CBO estimated savings of $275 
agencies to determine whether the use  million for FY 2018. 
of manufacturer rebates and lower   
provider reimbursement rates could 
achieve net savings for the purchase of 
test strips.  The recommendations 
reflected findings in OIG reports A-05-
15-00025 and A-05-13-00033. 
Excessive Medicaid Payments to New  Agreement between CMS and the State of  $100 
York State  New York, dated March 20, 2015, to repay 
Ensure that expenditures related to  $1.95 billion over 12 years with $100 million 
developmental centers and other  attributed to FY 2018. 
intermediate care facilities and any 
revised payment methodology be 
consistent with efficiency and 
economy.  The recommendation 
reflected findings in OIG reports 
A-02-11-01029, A-02-13-01008, and 
other reviews.   
 
 
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Appendix C: Peer-Review Results 
The Inspector General Act of 1978, as amended, requires OIGs to report the results of peer reviews of their 
operations conducted by other OIGs, the date of the last peer review, outstanding recommendations from 
peer reviews, and peer reviews conducted by an OIG of other OIGs in the semiannual period.  Peer reviews 
are conducted by member organizations of the Council of the Inspectors General on Integrity and 
Efficiency (CIGIE).  Recently, CIGIE has approved a new peer-review process for Inspection and Evaluation 
units within OIGs across the Federal Government, including at HHS-OIG, the implementation of which will 
begin in 2018. 
 
Office of Audit Services  
During this semiannual reporting period, one peer review involving OAS was completed.  Information 
concerning OASs peer-review activity during a prior reporting period is also listed below. 
 
OAS  Date  Reviewing Office  Office Reviewed 
April 2019  HHS-OIG, OAS  U.S. Department of 
Transportation (DOT) OIG 
The system of quality control for the audit organization of DOT OIG in effect for the year ending 
September 30, 2018, has been suitably designed and complied with to provide DOT OIG with 
reasonable assurance of performing and reporting in conformity with applicable professional 
standards in all material respects.  Federal audit organizations can receive a rating of pass, pass 
with deficiencies, or fail.  DOT OIG received a peer-review rating of pass. 
 
OAS  Date  Reviewing Office  Office Reviewed 
March 2018  U.S. Postal Service OIG  HHS-OIG, OAS 
The system of quality control for the audit organization of HHS-OIG in effect for the year ending 
September 30, 2017, has been suitably designed and complied with to provide HHS-OIG with 
reasonable assurance of performing and reporting in conformity with applicable professional 
standards in all material respects.  Federal audit organizations can receive a rating of pass, pass 
with deficiencies, or fail.  HHS-OIG received a peer-review rating of pass. 
 
 
Office of Investigations 
During this semiannual reporting period, no peer review involving OI was completed.  Listed below is 
information concerning OIs peer-review activities during prior reporting periods.  
 
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OI  Date  Reviewing Office  Office Reviewed 
  October 2018  SSA OIG  HHS-OIG, OI 
The system of internal safeguards and management procedures for the investigative function of 
HHS-OIG in effect for the year ending September 30, 2018, was in full compliance with the quality 
standards established by CIGIE and the Attorney Generals guidelines. 
 
OI  Date  Reviewing Office  Office Reviewed 
  August 2017  HHS-OIG, OI  U.S. Postal Service OIG 
The system of internal safeguards and management procedures for the investigative function of 
the U.S. Postal Service OIG in effect for the year ending September 30, 2015, was in full compliance 
with the quality standards established by CIGIE and the Attorney Generals guidelines.  
 
Office of Evaluation and Inspections 
During this semiannual reporting period, one peer review involving OEI was completed.  Information 
concerning OEIs peer-review activity during a prior reporting period is also listed below. 
 
OEI  Date  Reviewing Office  Office Reviewed 
September 2019  HHS-OIG, OEI  U.S. Department of Interior 
(DOI) OIG 
The DOI OIG Inspection and Evaluation components policies and procedures mostly met CIGIEs 
Quality Standards for Inspection and Evaluation (Blue Book) standards.  We reviewed four reports: 
two fully met the applicable Blue Book standards and two did not.  DOI OIG concurred with 
recommendations related to Evidence, Planning, and Data Collection and Analysis but did not 
concur with recommendations related to Reporting. 
 
OEI  Date  Reviewing Office  Office Reviewed 
September 2018  HHS-OIG, OEI  U.S. Department of Defense 
(DoD) OIG 
The DoD OIG Inspection and Evaluation components policies and procedures generally met 
CIGIEs Quality Standards for Inspection and Evaluation (Blue Book) standards.  In addition, the 10 
reports reviewed generally met the applicable Blue Book standards.  Onsite visits for these reviews 
 
were conducted from October 2 through November 17, 2017. 
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Appendix D: Summary of Sanction Authorities 
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made 
to the HHS Secretary for transmittal to Congress.  A selection of other authorities appears below.  
 
Program Exclusions 
The Social Security Act,  1128 (42 U.S.C.  1320a-7), provides several grounds for excluding individuals and 
entities from participation in Medicare, Medicaid, and other Federal health care programs.  Exclusions are 
required (mandatory exclusion) for individuals and entities convicted of the following types of criminal 
offenses: (1) Medicare or Medicaid fraud; (2) patient abuse or neglect; (3) felonies for other healthcare 
fraud; and (4) felonies for illegal manufacture, distribution, prescription, or dispensing of controlled 
substances.   
 
OIG is authorized (permissive exclusion) to exclude individuals and entities on several other grounds, 
including misdemeanors for other healthcare fraud (other than Medicare or Medicaid); suspension or 
revocation of a license to provide healthcare for reasons bearing on professional competence, professional 
performance or financial integrity; provision of unnecessary or substandard services; submission of false or 
fraudulent claims to a Federal health care program; or engaging in unlawful kickback arrangements.  
 
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to 
be made, any false statements or omissions in any application, bid, or contract to participate as a provider 
in a Federal health care program, including managed care programs under Medicare and Medicaid, as well 
as Medicares prescription drug program.  
 
Providers subject to exclusion are granted due process rights.  These include a hearing before an 
administrative law judge and appeals to the HHS Departmental Appeals Board and Federal district and 
appellate courts regarding the basis for and the length of the exclusion.  
 
Civil Monetary Penalties Law 
The CMPL of the Social Security Act, 1128A (42 U.S.C.  1320a 7a), imposes penalties, assessments, and 
exclusion from participation in Federal health care programs for engaging in certain activities.  For 
example, a person who submits, or causes to be submitted, to a Federal health care program a claim for 
items and services that the person knows, or should know, is false or fraudulent is subject to a penalty of 
up to $15,270 for each item or service falsely or fraudulently claimed, an assessment of up to three times 
the amount falsely or fraudulently claimed, and exclusion.  
 
For the purposes of the CMPL, should know is defined to mean that the person acted in reckless 
disregard or deliberate ignorance of the truth or falsity of the claim.  The law and its implementing 
regulations also authorize actions for a variety of other violations, including submission of claims for items 
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or services furnished by an excluded person; requests for payment in violation of an assignment 
agreement; violations of rules regarding the possession, use, and transfer of biological agents and toxins; 
and payment or receipt of remuneration in violation of the anti-kickback statute (42 U.S.C.  1320a 7b (b)).   
 
The ACA added more grounds for imposing CMPs.  These include, among other types of conduct, 
knowingly making, or causing to be made, any false statements or omissions in any application, bid, or 
contract to participate as a provider in a Federal health care program (including Medicare and Medicaid 
managed care programs and Medicare Part D); the ACA authorizes a penalty of up to $55,262 for each 
false statement, as well as activities relating to fraudulent marketing by MCOs, their employees, or their 
agents.   
 
The 21st Century Cures Act (enacted on December 13, 2016) added more grounds for imposing CMPs, 
assessments, and exclusion from Federal health care programs for fraudulent conduct in an HHS grant, 
contract, or other agreement.  OIG may assess CMPs of up to $10,000 per claim and assessments of up to 
three times the amount claimed for knowingly presenting a false or fraudulent claim.  In addition, OIG may 
impose a penalty of up to $50,000 and assessments of up to three times the amount of funds at issue: 
(1) for each instance of knowingly making a false statement in a document required to be submitted in 
order to receive funds under an HHS contract, grant, or other agreement; (2) for knowingly making or 
using a false record or statement that is material to a false or fraudulent claim; and (3) for knowingly 
making or using a false record or statement material to an obligation to pay or transmit funds or property 
owed to HHS.  OIG may impose a penalty of up to $10,000 per day and assessments of up to three times 
the amount at issue for knowingly concealing, or knowingly and improperly avoiding or decreasing, an 
obligation owed to HHS with respect to an HHS grant, contract, or other agreement.  Finally, HHS-OIG may 
impose a penalty of up to $15,000 per day for failing to grant timely access to OIG upon reasonable 
request for audits or to carry out other statutory functions in matters involving an HHS grant, contract, or 
other agreement.   
 
Patient Dumping 
The Social Security Act, 1867 (42 U.S.C.  1395dd), provides that when an individual goes to the ER of a 
Medicare-participating hospital, the hospital must provide an appropriate medical screening examination 
to determine whether that individual has an emergency medical condition.  If an individual has such a 
condition, the hospital must provide either treatment to stabilize the condition or an appropriate transfer 
to another medical facility.  
 
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of 
transfer and must ensure that the receiving hospital agrees to the transfer and has available space and 
qualified personnel to treat the individual.  In addition, the transferring hospital must effect the transfer 
through qualified personnel and transportation equipment.  Further, a participating hospital with 
specialized capabilities or facilities may not refuse to accept an appropriate transfer of an individual who 
needs services if the hospital has the capacity to treat the individual.  
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OIG is authorized to collect CMPs of up to $53,484 against small hospitals (fewer than 100 beds) and up to 
$106,965 against larger hospitals (100 beds or more) for each instance in which the hospital negligently 
violated any of the section 1867 requirements.  In addition, OIG may collect a penalty of up to $106,965 
from a responsible physician for each negligent violation of any of the section 1867 requirements and, in 
some circumstances, may exclude a responsible physician.  
 
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities 
The Anti-Kickback Statute 
The anti-kickback statute authorizes penalties against anyone who knowingly and willfully solicits, 
receives, offers, or pays remuneration, in cash or in kind, to induce or in return for: (1) referring an 
individual to a person or an entity for the furnishing, or arranging for the furnishing, of any item or 
service payable under the Federal health care programs; or (2) purchasing, leasing, or ordering, or 
arranging for or recommending the purchasing, leasing, or ordering, of any good, facility, service, 
or item payable under the Federal health care programs (Social Security Act,  1128B(b) (42 U.S.C.  
1320a-7b(b)).  
 
Individuals and entities that engage in unlawful referral or kickback schemes may be subject to 
criminal penalties under the general criminal anti-kickback statute; a CMP under OIGs authority 
pursuant to the Social Security Act,  1127(a)(7) (42 U.S.C.  1320a-7a); and/or program exclusion 
under OIGs permissive exclusion authority under the Social Security Act,  1128(b)(7) (42 U.S.C.  
1320a-7(b)(7)).  
 
The False Claims Act 
Under the FCA, as amended by the False Claims Amendments Act of 1986 (31 U.S.C.  37293733), 
a person or an entity is liable for up to treble damages and a penalty between $11,181 and $22,363 
for each false claim it knowingly submits, or causes to be submitted, to a Federal program.  
Similarly, a person or an entity is liable under the FCA if it knowingly makes or uses, or causes to be 
made or used, a false record or statement to have a false claim paid.  The FCA defines knowing 
to include not only the traditional definition but also instances in which the person acted in 
deliberate ignorance or reckless disregard of the truth or falsity of the information.  Under the FCA, 
no specific intent to defraud is required.  Further, the FCA contains a qui tam, or whistleblower, 
provision that allows a private individual to file a lawsuit on behalf of the United States and entitles 
that whistleblower to a percentage of any fraud recoveries.  The FCA was again amended in 2009 
in response to recent Federal court decisions that narrowed the laws applicability.  Among other 
things, these amendments clarify the reach of the FCA to false claims submitted to contractors or 
grantees of the Federal Government.   
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Appendix E: Reporting Requirements in the 
Inspector General Act of 1978 
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following 
table along with the location of the required information.  
 
Section  Requirement  Location 
Section 4 
(a)(2)  Review of legislation and regulations  Other HHS-Related 
Reviews and 
Investigations section   
Section 5 
(a)(1)  Significant problems, abuses, and deficiencies  Throughout this report 
(a)(2)  Recommendations with respect to significant problems,  Throughout this report 
abuses, and deficiencies 
(a)(3)  Prior significant recommendations on which corrective  Solutions To Reduce Fraud, 
action has not been completed  Waste, and Abuse in HHS 
Programs: Top 
Unimplemented 
Recommendations 
(previously known as the 
Compendium of 
Unimplemented 
Recommendations) 
(a)(4)  Matters referred to prosecutive authorities  Legal and Investigative 
Activities Related to the 
Medicare and Medicaid 
Programs section 
(a)(5)  Summary of instances in which information requested by  None for this reporting 
OIG was refused  period 
(a)(6)  List of audit reports  Submitted to the Secretary 
under separate cover 
(a)(7)  Summary of significant reports  Throughout this report 
(a)(8)  Statistical Table 1Reports With Questioned Costs  Appendix A 
(a)(9)  Statistical Table 2Funds Recommended To Be Put to  Appendix A 
Better Use 
(a)(10)  Summary of previous audit reports without management  Appendix A 
decisions, in which no establishment comment was returned 
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Section  Requirement  Location 
within 60 days, and in which there are any outstanding 
unimplemented recommendations 
(a)(11)  Description and explanation of revised management  Appendix A 
decisions 
(a)(12)  Management decisions with which the Inspector General  None for this reporting 
disagrees  period 
(a)(13)  Information required by the Federal Information Security  Reported annually in the 
Management Act.   spring Semiannual Report, 
Other HHS-Related 
Reviews and 
Investigations section 
(a)(14)-(16)  Results of peer reviews of HHS-OIG conducted by other  Appendix B 
OIGs or the date of the last peer review, outstanding 
recommendations from peer reviews, and peer reviews 
conducted by HHS-OIG of other OIGs 
(a)(17)  Investigative statistical tables  Appendix E 
(a)(18)  Metrics description for statistical tables  Appendix E 
(a)(19)  Investigations on senior Government employees  Appendix E 
(a)(20)  Description of whistleblower retaliation instances  Appendix E 
(a)(21)  Description of attempts to interfere with OIG independence  Appendix E 
(a)(22)  Description of closed and nondisclosed reports and  Appendix E 
investigations regarding senior Government employees 
 
Other Reporting Requirements 
Section  Requirement  Location 
845  Significant contract audits required to be reported pursuant  Other HHS-Related 
to the National Defense Authorization Act for FY 2008  Reviews and 
(P.L. No. 110-181),  845.  Investigations section 
205  Pursuant to HIPAA (P.L. No. 104-191),  205, the Inspector  Reported annually in the 
General is required to solicit proposals annually via a Federal  fall Semiannual Report, 
Register notice for developing new and modifying existing  Appendix G 
safe harbors to the anti-kickback statute of the Social   
Security Act,  1128(b) and for developing special fraud 
alerts.  The Inspector General is also required to report 
annually to Congress on the status of the proposals received 
related to new or modified safe harbors. 
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Section  Requirement  Location 
1553  Pursuant to the American Recovery and Reinvestment Act of  Other HHS-Related 
2009, P.L. No. 111-5,  1553, OIG reports to Congress the  Reviews and 
retaliation complaint investigations it decided not to 
Investigations section 
conduct or continue during the period. 
 
 
 
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Appendix F: Reporting Requirements in the 
Inspector General Empowerment Act of 2016 
The Inspector General Empowerment Act of 2016 (IGEA) establishes new reporting requirements for the 
Semiannual Reports.  These requirements amend portions of  5 of the Inspector General Act.  The 
requirements are below in italics, followed by OIGs responses.  
 
Each Inspector General shall, not later than April 30 and October 31 of each year, prepare 
semiannual reports summarizing the activities of the Office during the immediately preceding six-
month periods ending March 31 and September 30.  Such reports shall include, but need not be 
limited to- 
(10) A summary of audit, inspection, and evaluation reports issued before the commencement of the 
reporting period- 
(A) for which no management decision has been made by the end of the reporting period (including 
the date and title of each such report), an explanation of the reasons such management decision has 
not been made, and a statement concerning the desired timetable for achieving a management 
decision on each such report;  
 
For audit, inspection, and evaluation reports issued from FY 2011 through FY 2019, OIG had 92 
reports with overdue final management decisions.1 
 
OIG is unable to provide reasons and timetables for each of these overdue management decisions, 
due to the volume and that OIG did not historically track this information.  
 
(B) for which no establishment comment was returned within 60 days of providing the report to the 
establishment; and  
 
For draft reports that include recommendations, OIG typically requests establishment comments 
within 30 days.  In some instances, OIG grants extensions when requested and appropriate.  When 
OIG does not receive establishment comments or a request for extension within the 30-day 
timeframe, OIG typically issues the report and notes the lack of establishment comments.   
 
For this semiannual reporting period, OIG had no reports with comments exceeding 60 days.   
 
 
 
1 OIG can track the status of management decisions for all reports back to FY 2011.  OIG can track the status of management 
decisions for audit reports back to FY 1990.  We have identified three additional audit reports with overdue management decisions 
from FY 1990 through FY 2010.   
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(C) for which there are any outstanding unimplemented recommendations, including the aggregate 
potential cost savings of those recommendations.  
 
OIG is actively tracking 1,235 unimplemented open recommendations made in reports issued since 
FY 2011.  Given the volume of recommendations OIG makes each year, the table below reflects 
summary data by FY: 
 
FY (2011 Number of Reports  Number of  Dollar Value of   
2019)  with Unimplemented  Unimplemented  Aggregate 
 
Recommendations  Recommendations  Potential Cost 
 
Savings 
2011  14  22  $434,404,003   
2012  25  31  $397,437,195 
 
2013  36  62  $238,018,798 
 
2014  34  58  $15,140,127,422 
2015  37  66  $333,957,018   
2016  37  85  $195,448,338   
2017  49  164  $1,119,790,864 
 
2018  71  236  $2,235,268,673 
 
2019  131  511  $1,418,992,826 
 
Totals  434  1,235  $21,513,445,137 
 
OIG annually produces a Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations (previously known as the Compendium of Unimplemented Recommendations) 
which constitutes OIGs response to a specific requirement of the Inspector General Act, as 
amended ( 5(a)(3)).  It identifies significant recommendations with respect to problems, abuses, or 
deficiencies for which corrective actions have not been completed.  It also includes an appendix 
listing OIGs significant unimplemented recommendations, which represent opportunities to 
achieve expected impact through cost savings, improvements in program effectiveness and 
efficiency, or increasing quality of care and safety of beneficiaries.  In OIGs view, these 
recommendations would most positively impact HHS programs in terms of cost savings and/or 
quality improvements and should therefore be prioritized for implementation.   
 
 (17) Statistical tables showing- 
(A) the total number of investigative reports issued during the reporting period; 
(B) the total number of persons referred to the Department of Justice for criminal prosecution during 
the reporting period; 
(C) the total number of persons referred to State and local prosecuting authorities for criminal 
prosecution during the reporting period; and 
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(D) the total number of indictments and criminal informations during the reporting period that 
resulted from any prior referral to prosecuting authorities; 
 
Total number of investigative reports issued during the reporting period,  0 
including Management Implication Reports and Investigative Advisories 
Total number of persons referred2 to Federal prosecuting authorities for  1,346 
criminal prosecution during the reporting period3   
Total number of persons referred to State and local prosecuting authorities  150 
for criminal prosecutions during the reporting period  
Total number of Federal indictments and criminal informations during the  537 
reporting period that resulted from any prior referral to prosecuting 
authorities 
Total number of State and local indictments and criminal informations during  41 
the reporting period that resulted from any prior referral to prosecuting 
authorities 
 
(18) A description of the metrics used for developing the data for the statistical tables under 
paragraph (17);  
 
Regarding (17)(A), OIG considers Investigative Reports as Management Implication Reports 
and Investigative Advisories.  A Management Implication Report identifies systemic 
weaknesses or vulnerabilities within HHS programs, which are generally identified during the 
course of an OIG investigation and could lead to fraud, waste, or abuse.  It provides 
recommendations to correct or minimize the problem.  Corrective actions may require 
administrative, procedural, policy, regulatory, or legislative change.  When a Management 
Implication Report is issued to an HHS OpDiv or Staff Division, it is generally signed by the 
Inspector General.  Investigative Advisories are similar documents that bring renewed attention 
to an identified HHS issue and are generally signed by the Deputy Inspector General for 
Investigations.  
 
Regarding (17)(B) and (C), OIG defines this measure as the term "presentations" to both 
Federal and State/local prosecuting jurisdictions as the representation of the work we do.  For 
example, when OIG opens an investigation, it evaluates the complaint and decides whether to 
"present" the matter for prosecution.  Generally, if the case has prosecutorial merit, and is 
accepted for Federal prosecution, OIG works with DOJ as the primary investigative agency, as 
opposed to referring the matter to DOJ without further involvement on OIG's part.  OIG works 
with State and local prosecutorial authorities in addition to working with DOJ.  
 
 
2 A referral includes OIG presentations to DOJ and/or State/local prosecutorial authorities.   
3 OIG counts persons as both individuals and entities.   
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Regarding (17)(D), the table above provides the number of indictments/criminal informations 
during the semiannual reporting period, including sealed indictments/criminal informations.  
However, the information cannot be limited to only those that occurred as a result of a 
presentation in a previous period.  In certain situations, the presentation and charging dates 
are in the same reporting period.  
 
 (19) A report on each investigation conducted by the Office involving a senior Government employee 
where allegations of misconduct were substantiated, including a detailed description of- 
(A) the facts and circumstances of the investigation; and 
(B) the status and disposition of the matter, including- 
(i) if the matter was referred to the Department of Justice, the date of the referral; and 
(ii) if the Department of Justice declined the referral, the date of the declination; 
 
To respond fully to this subparagraph, OIG would need to make a finding of misconduct.  However, 
OIG does not make findings regarding its investigations relating to substantiated allegations of 
departmental employee misconduct.  Our reports relay the facts obtained during the investigations 
(e.g., parties involved, dates of events) related to any substantiated allegations.  At the conclusion 
of an OIG investigation related to substantiated allegations concerning possible employee 
misconduct, OIG provides a report to management in the employing agency.  The agency 
management makes determinations of employee misconduct.  The disposition of the matter and 
any resulting administrative actions are taken by the agency.   
 
However, we request from the agency a copy of an SF-50 documenting a personnel action, if one is 
taken.  To the extent that we have information regarding subsequent administrative action, OIG can 
provide that information.  However, because there are sometimes settlement agreements that may 
impact the final action, OIG may not have a complete record of the disposition of the investigation.  
Accordingly, such information might be more efficiently and effectively provided directly by the 
employing agency.   
 
For this section, OIG describes investigations during this reporting period, both criminal and 
administrative, involving senior Government employees for whom allegations of misconduct were 
substantiated.  The descriptions below include a level of detail appropriate for each investigation, 
depending on whether the case details were available in public documents.  During this reporting 
period, OIG investigated one senior Government employees for misconduct, and OIG determined 
the allegations to be substantiated, but no prosecution resulted.  A description of the investigation 
is below.  
 
 
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DOJ  DOJ 
DOJ  Referral  DOJ  Declination 
Description of Investigation  Status  Disposition  Referral  Date  Declination  Date 
OI was advised of a 
suspected computer misuse 
case involving the employee.  
It had been alleged that the 
employee may have accessed 
Closed  Closed  No  None  None  None 
databases and systems for 
purposes that were not 
authorized.  OI examined the 
matter and found no criminal 
activity. 
 
20) A detailed description of any instance of whistleblower retaliation, including information about 
the official found to have engaged in retaliation and what, if any, consequences the establishment 
imposed to hold that official accountable; 
 
For departmental agencies, OIG conducts investigations and gathers facts related to whistleblower 
complaints.  Before 2015, OIG made no determinations as to whether retaliatory action had been 
taken.  However, to better facilitate the report review process, OIG changed its process in 2015 to 
include findings in its reports as to whether it was more likely than not that whistleblower 
retaliation had occurred.  Although OIG now includes these findings in its reports, it does not make 
recommendations as to what, if any, corrective action(s) should be taken.   
 
During the time period from April 1, 2019, through September 30, 2019, OIG did not issue any 
reports that included findings of retaliation. 
 
When determining the level of detail to provide for a description of any instance of whistleblower 
retaliation, OIG is always mindful of the risk that a detailed description of the allegation could 
inadvertently reveal the whistleblowers identity, thus having a chilling effect on future 
whistleblowers.  
 
(21) A detailed description of any attempt by the establishment to interfere with the independence of 
the Office, including- 
(A) with budget constraints designed to limit the capabilities of the Office; and 
(B) incidents where the establishment has resisted or objected to oversight activities of the Office 
or restricted or significantly delayed access to information, including the justification of the 
establishment for such action; and 
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Although there have been instances in which HHS agencies have questioned OIG oversight 
activities or have not provided all information in the precise content, format, and timeline as 
requested, OIG has not identified any instances in which HHS interfered with the independence of 
OIG during this reporting period.  OIG would immediately notify Congress if it were unable to 
resolve these issues within HHS.   
 
(22) Detailed descriptions of the particular circumstances of each- 
(A) inspection, evaluation, and audit conducted by the Office that is closed and was not 
disclosed to the public; and 
 
The table below lists evaluation and audit reports for this semiannual reporting period that did not 
result in public reports.  However, in some circumstances, a public summary of these nonpublic 
reports was published.   
 
Nonpublic Reports by Category, April 1, 2019, to September 30, 2019 
 
Number of 
Category/Description 
Reports 
IT security reviews (involve IT systems, e.g., penetration test audits)  0 
Homeland security issues (involve particularly sensitive topics, e.g., bioterrorism, 
0 
emergency preparedness, and classified or potentially classified information) 
Recipient Capability Audits (primarily in Head Start/Early Head Start programs)  0 
Reimbursable audits performed for other Federal agencies (primarily contract 
0 
audits) 
Confidential or proprietary information (e.g., Medicare Part B drug 
0 
claims/imaging services, Medicare investment income) 
Medicare Adverse Event Reviews (required by law not to disclose)  0 
Medicare Prescription Drug Event Reviews  0 
Other  0 
HHS technical assistance reports4  0 
Finance-related attestation reviews  2 
   Total  2 
 
 
 
4 OIG routinely provides technical assistance to HHS.  Generally, that technical assistance is not part of a formal report and is not 
formally tracked.  However, in some limited circumstances, OIG does provide technical assistance in a formal report, and only that 
category of technical assistance is reflected in this table.   
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(B) Investigation conducted by the Office involving a senior Government employee that is closed and 
was not disclosed to the public.  
 
In section 5(a)(19), we detail investigations of senior Government employees in which allegations 
were substantiated.  Those investigations are all closed and none have been disclosed to the 
public.  OIG interprets section 5(a)(22)(B) as requiring reporting on investigations with either 
substantiated or unsubstantiated allegations.  As such, we refer to our section 5(a)(19) response to 
address investigations of senior Government employees in which allegations were substantiated 
that were closed and not disclosed to the public.  Our section 5(a)(22)(B) response describes 
investigations during this reporting period, both criminal and administrative, involving a senior 
Government employee in which OIG did not substantiate allegations of misconduct.   
 
When determining the level of detail to provide for the investigations described above, OIG is 
mindful of the risk that a detailed description of the investigation could inadvertently reveal the 
subjects identity.  During this reporting period, OIG investigated one senior Government 
employees for misconduct, but OIG determined the allegations to be unsubstantiated.  
Descriptions of the investigations are below.  
 
Description of Investigation  Status  Disposition  DOJ  DOJ  DOJ  DOJ 
Referral  Referral  Declination  Declination 
Date  Date 
Allegations of conflict of interest 
No evidence 
and post-employment violations 
Closed  to support  No  N/A  N/A  N/A 
were received regarding a senior 
allegations. 
government employee. 
 
 
 
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Appendix G: Anti-Kickback StatuteSafe 
Harbors 
Pursuant to the Health Insurance Portability and Accountability Act (HIPAA),  205, the Inspector General is 
required to solicit proposals annually via a Federal Register notice for developing new and modifying 
existing safe harbors to the anti-kickback statute, section 1128B(b) of the Social Security Act and for 
developing special fraud alerts.  The Inspector General is also required to report annually to Congress on 
the status of the proposals received related to new or modified safe harbors.  In 2018, the Office of 
Inspector General (OIG) did not publish its typical December annual solicitation in the Federal Register.5    
 
For 2018, OIG issued a request for information (OIG RFI) regarding the Federal anti-kickback statute and 
beneficiary inducements CMP, which published in the Federal Register on August 27, 2018.6  In the OIG RFI, 
we sought feedback on ways in which OIG might modify or add new safe harbors to the Federal anti-
kickback statute and exceptions to the beneficiary inducements CMP definition of remuneration to foster 
arrangements that would promote care coordination and advance the delivery of value-based care while 
also protecting patients and taxpayer dollars against harms caused by fraud and abuse.  Consequently, 
below OIG reports on proposals responding to the OIG RFI. 
 
In crafting safe harbors for a criminal statute, it is incumbent upon OIG to engage in a complete and 
careful review of the range of factual circumstances that may fall within the proposed safe harbor subject 
area to uncover all potential opportunities for fraud and abuse by unscrupulous providers.  Having done 
so, OIG must then determine, in consultation with DOJ, whether it can develop effective regulatory 
limitations and controlsnot only to foster beneficial or innocuous arrangements but also to protect the 
Federal health care programs and their beneficiaries from abusive practices. 
 
Public proposals for new and modified safe harbors  
In response to the OIG RFI, OIG received 359 comments from a variety of individuals and organizations.  
Due to the number and variety of proposals for new and modified safe harbors set forth in the comments 
received in response to the OIG RFI, we highlight some of the most common proposals below.      
 
Although most commenters to the OIG RFI strongly asserted the need for regulatory reform to the anti-
kickback statute safe harbors, a number of commenters acknowledged that increased regulatory flexibility 
 
 
5 See, e.g., OIG, Notification of intent to develop regulations, 81 Fed. Reg. 95,551 (Dec. 28, 2016), available at 
https://www.govinfo.gov/content/pkg/FR-2016-12-28/pdf/2016-31170.pdf; OIG, Notification of intent to develop regulations, 82 
Fed. Reg. 61,229 (Dec. 27, 2017), available at https://www.govinfo.gov/content/pkg/FR-2017-12-27/pdf/2017-27117.pdf. 
6 OIG, Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute 
and Beneficiary Inducements CMP, 83 Fed. Reg. 43,607 (Aug. 27, 2018), available at 
https://oig.hhs.gov/authorities/docs/2018/RFI_Regarding_AKS_Beneficiary_Inducements_CMP.pdf. 
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could create program integrity vulnerabilities or increase the risk of harms associated with fraud and abuse 
and urged OIG to exercise caution and include adequate safeguards in any regulatory proposals.  
Comments supporting regulatory reform encompassed a number of themes, including requests for:   
 
  new safe harbors protecting financial arrangements among parties participating in alternative 
payment models (APMs), value-based arrangements, and care coordination activities;  
  safe harbor protection for financial arrangements with entities not participating in Innovation 
Center models, including commercial and self-pay APM arrangements;  
  additional protection for patient tools and supports, such as in-kind items and services to support 
patient compliance with discharge and care plans, services and supports to address unmet social 
needs affecting health, and expanded protections under the local transportation safe harbor;  
  enhanced safe harbor protection for transfers of information technology, data, and cybersecurity 
tools;  
  modifications to the current patchwork fraud and abuse waiver framework for Innovation Center 
models and the Medicare Shared Savings Program; and 
  a variety of protections for pharmaceutical and medical device manufacturer arrangements, 
including broad protections for drug and medical device manufacturer participation in value-based 
contracts, pricing arrangements, warranty arrangements, and APMs, as well as protection for 
coupons and other means of direct copayment assistance to Medicare Part D beneficiaries in 
certain situations. 
In the October 17, 2019, Federal Register, OIG issued a Notice of Proposed Rulemaking, Revisions to the 
Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary 
Inducements (the OIG NPRM).7  The OIG NPRM includes proposals that may be responsive to certain of 
the abovementioned requests for additional protections included in comments responding to the OIG RFI.  
 
In particular, among other proposals, and subject to the proposed definitions and conditions set forth in 
the OIG NPRM, the OIG NPRM includes the following proposals:  
 
  three proposed new safe harbors for certain remuneration exchanged between or among 
participants in a value-based arrangement (as further defined) that fosters better coordinated and 
managed patient care: (i) care coordination arrangements to improve quality, health outcomes, 
and efficiency (1001.952(ee)); (ii) value-based arrangements with substantial downside financial risk 
(1001.952(ff)); and (iii) value-based arrangements with full financial risk (1001.952(gg)).  These 
proposed safe harbors vary, among other ways, by the types of remuneration protected (in-kind or 
in-kind and monetary), the level of financial risk assumed by the parties, and the types of 
safeguards included as safe harbor conditions; 
 
 
7 OIG, Medicare and State Healthcare Programs: Fraud and Abuse; Revisions To Safe Harbors Under the Anti-Kickback Statute, and 
Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 84 Fed. Reg. 55,694 (Oct. 17, 2019), available at 
https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.  
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  a proposed new safe harbor (1001.952(hh)) for certain tools and supports furnished under patient 
engagement and support arrangements to improve quality, health outcomes, and efficiency; 
  a proposed new safe harbor (1001.952(ii)) for certain remuneration provided in connection with a 
CMS-sponsored model, which should reduce the need for OIG to issue separate and distinct fraud 
and abuse waivers for new CMS-sponsored models; 
  a proposed new safe harbor (1001.952(jj)) for donations of cybersecurity technology and services;  
  proposed modifications to the existing safe harbor for electronic health records items and services 
(1001.952(y)) to add protections for certain cybersecurity technology included as part of an 
electronic health records arrangement, to update provisions regarding interoperability, and to 
remove the sunset date; 
  proposed modifications to the existing safe harbor for personal services and management 
contracts (1001.952(d)) to add flexibility with respect to outcomes-based payments and  part-time 
arrangements; 
  proposed modifications to the existing safe harbor for warranties (1001.952(g)) to revise the 
definition of warranty and provide protection for warranties for one or more items and related 
services; and  
  proposed modifications to the existing safe harbor for local transportation (1001.952(bb)) to expand 
and modify mileage limits for rural areas and for transportation for discharged patients. 
 
Comments to the OIG NPRM are due December 31, 2019, and will be considered at that time.  No final 
determination has been made that the arrangements described in the OIG NPRMs proposals are, or 
should be, exempt from liability under the anti-kickback statute.  In addition, any final safe harbors would 
provide only prospective protection.  In the meantime, questions about the application of the anti-kickback 
statute to specific arrangements should be addressed on a case-by-case basis, such as under the advisory 
opinion process. 
 
 
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