Department of Health and Human Services 
 
 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
S D S
OUTH  AKOTA  TATE 
 
 
M F C
EDICAID  RAUD  ONTROL 
 
 
U : 2016 O R  
NIT    NSITE  EVIEW
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
Suzanne Murrin 
Deputy Inspector General  
for Evaluation and Inspections 
 
September 2016 
OEI-07-16-00170   
   
EXECUTIVE SUMMARY:  SOUTH DAKOTA STATE MEDICAID FRAUD 
CONTROL UNIT:  2016 ONSITE REVIEW 
OEI-07-16-00170 
 
WHY WE DID THIS STUDY  
The Office of Inspector General (OIG) administers the Medicaid Fraud Control Unit 
(MFCU or Unit) grant awards, annually recertifies the Units, and oversees the Units 
performance in accordance with the requirements of the grant.  As part of this oversight, 
OIG conducts periodic reviews of all Units and prepares public reports based on these 
reviews.  These reviews assess the Units adherence to the 12 MFCU performance 
standards and compliance with applicable Federal statutes and regulations. 
 
HOW WE DID THIS STUDY 
We conducted an onsite review of the South Dakota Unit in April 2016.  We based our 
review on an analysis of data from six sources:  (1) policies, procedures, and 
documentation related to the Units operations, staffing, and caseload; (2) financial 
documentation for fiscal years (FYs) 2013 through 2015; (3) structured interviews with 
key stakeholders; (4) structured interviews with the Units staff; (5) a review of files for 
cases that were open at some point during FYs 2013 through 2015; and (6) observation of 
Unit operations. 
 
WHAT WE FOUND 
For FYs 2013 through 2015, the South Dakota Unit reported 5 criminal convictions, 
12 civil judgments and settlements, and combined criminal and civil recoveries of 
$7 million.  We found that the South Dakota Unit was generally in compliance with 
applicable laws, regulations, and policy transmittals, with some exceptions.  Specifically, 
the Unit did not report program income properly in FY 2013; and a Unit investigator 
performed non-Unit duties, for which associated costs were not subtracted from claimed 
Unit expenditures.  With respect to adherence to the Performance Standards, we found 
that the Unit did not always document periodic supervisory reviews in its case files.  
Further, the Unit did not report all convictions and adverse actions to Federal partners 
within required timeframes.  In addition, we noted that only a small portion of Unit fraud 
referrals8 percentcame from the State Medicaid agencys Program Integrity Unit.  
We also noted that the Unit uses peer education as a means of deterring fraudulent 
conduct. 
 
WHAT WE RECOMMEND  
We recommend that the South Dakota Unit (1) deduct the Federal share for the 
unallowable withdrawal from current expenditures and ensure that all program income is 
reported properly on its Federal financial reports, (2) reimburse the Federal share of 
unallowable personnel costs related to non-Unit duties and ensure that the Unit claims 
Federal reimbursement only for appropriate Unit-related duties, (3) implement processes 
to ensure that all case files include documentation of periodic supervisory reviews, and 
(4) implement processes to ensure that convictions and adverse actions are reported to 
   
   
Federal partners within required timeframes.  The Unit concurred with all four 
recommendations. 
   
   
TABLE OF CONTENTS 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................4 
Findings........................................................................................................5 
For FYs 2013 through 2015, the South Dakota Unit reported 
5 criminal convictions, 12 civil judgments and settlements, and 
combined criminal and civil recoveries of $7 million. ....................5 
In FY 2013, the Unit did not report program income properly ........6 
Unit professional staff performed non-Unit duties, and the 
associated costs were not subtracted from claimed Unit 
expenditures .....................................................................................7 
Half of the Units case files lacked documentation of periodic 
supervisory reviews; however, the supervisor documented the 
opening and closing of all cases.......................................................7 
The Unit did not report all convictions and adverse actions to 
Federal partners within required timeframes ...................................8 
Other observation:  Only a small portion of Unit fraud referrals
8 percentcame from the State Medicaid agencys Program 
Integrity Unit ....................................................................................9 
Other observation:  The Unit uses peer education as a fraud 
deterrent ...........................................................................................9 
Conclusion and Recommendations ............................................................ 11 
Unit Comments and Office of Inspector General Response ..........13 
Appendixes ................................................................................................14 
A:  2012 Performance Standards ...................................................14 
B:  Unit Referrals by Referral Source for FYs 2013 Through 
2015................................................................................................18 
C:  Detailed Methodology ..............................................................19 
D:  Unit Comments ........................................................................22 
Acknowledgments......................................................................................25 
 
   
OBJECTIVE 
To conduct an onsite review of the South Dakota State Medicaid Fraud 
Control Unit (MFCU or Unit). 
BACKGROUND 
The mission of MFCUs is to investigate and prosecute Medicaid provider 
fraud and patient abuse or neglect under State law.1   The SSA requires 
each State to operate a MFCU, unless the Secretary of Health and Human 
Services (HHS) determines that (1) operation of a Unit would not be 
cost-effective because minimal Medicaid fraud exists in a particular State 
and (2) the State has other adequate safeguards to protect Medicaid 
beneficiaries from abuse and neglect.2  Currently, 49 States and the 
District of Columbia (States) have MFCUs.3  
Each Unit must employ an interdisciplinary staff that consists of at least an  
investigator, an auditor, and an attorney.4 Unit staff review referrals of 
potential fraud and patient abuse or neglect to determine their potential for 
criminal prosecution and/or civil action.  In fiscal year (FY) 2015, the 
50 Units collectively reported 1,553 convictions, 795 civil settlements or 
judgments, and approximately $745 million in recoveries.5, 6  
Units must meet a number of requirements established by the SSA and 
Federal regulations.  For example, each Unit must: 
   be a single, identifiable entity of State government, distinct from  
the single State Medicaid agency;7    
   develop a formal agreement, such as a memorandum of 
understanding (MOU), which describes the Units relationship 
with the State Medicaid agency;8 and 
______________________________________________________ 
1 Social Security Act (SSA)    1903(q).  Regulations at 42 CFR   1007.11(b)(1) add that 
the Units responsibilities may include reviewing complaints of misappropriation  of  
patients private funds in  residential health care facilities. 
2  SSA  1902(a)(61).    
3 North Dakota and the territories of American Samoa, Guam, the Northern Mariana 

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

4  SSA  1903(q)(6); 42  CFR 1007.13. 

5  Office of  Inspector General (OIG),  MFCU  Statistical Data for Fiscal Year 2015. 
 
Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2015-statistical-chart.htm on February 16, 2016. 
6  All FY  references in this  report are based on the Federal  FY (October 1 through     
September 30).  
7  SSA  1903(q)(2); 42  CFR  1007.5  and 1007.9(a). 
8  42  CFR  1007.9(d).  
South Dakota State Medicaid Fraud Control Unit:  2015 Onsite Review  (OEI-07-15-00360)   1 
   
   
  have either statewide authority to prosecute cases or formal 
procedures to refer suspected criminal violations to an agency with 
such authority.9   
MFCU Funding 
Each MFCU is funded jointly by its State and the Federal government.  
Federal funding for the MFCUs is provided as part of the Federal 
Medicaid appropriation, but it is administered by OIG.10  Each Unit 
receives Federal financial participation equivalent to 75 percent of its total 
expenditures, with State funds contributing the remaining 25 percent.11  In 
FY 2015, combined Federal and State expenditures for the Units totaled 
approximately $251 million, $188 million of which represented Federal 
funds.12   
Administration and Oversight of the MFCU Program 
The Secretary of HHS delegated to OIG the authority to administer the 
MFCU grant program.13  To receive Federal reimbursement, each Unit must 
submit an initial application to OIG for approval and be recertified each year 
thereafter. 
In annually recertifying the Units, OIG evaluates Unit compliance with 
Federal requirements and adherence to performance standards.  The Federal 
requirements for Units are contained in the SSA, regulations, and policy 
guidance.14  In addition, OIG has published 12 performance standards that it 
uses to assess whether a Unit is effectively performing its responsibilities.15  
The standards address topics such as staffing, maintaining adequate referrals, 
and cooperation with Federal authorities.  Appendix A contains the 
Performance Standards.  
OIG also performs periodic onsite reviews of the Units, such as this review 
of the South Dakota MFCU.  During these onsite reviews, OIG evaluates 
Units compliance with laws, regulations, and policies, as well as adherence 
to the 12 performance standards.  OIG also makes observations about best 
practices, provides recommendations to the Units, and monitors the 
______________________________________________________ 
9 SSA  1903(q)(1). 
10 SSA  1903(a)(6)(B). 
11 Ibid. 
12 OIG, MFCU Statistical Data for Fiscal Year 2015.  Accessed at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2015-statistical-chart.htm on February 16, 2016. 
13 The SSA authorizes the Secretary of HHS to award grants to the Units 
(SSA  1903(a)(6)(B)); the Secretary delegated this authority to the OIG. 
14 On occasion, OIG issues policy transmittals to provide guidance and instructions to 
MFCUs.   
15 77 Fed. Reg. 32645 (June 1, 2012). 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   2 
     
   
implementation of the recommendations.  These evaluations differ from 
other OIG evaluations as they support OIGs direct administration of the 
MFCU grant program.  These evaluations are subject to the same internal 
quality controls as other OIG evaluations, including internal peer review. 
OIG provides additional oversight including the collection and dissemination 
of performance data, training, and technical assistance.  
South Dakota Medicaid Program 
In 2013, South Dakotas Medicaid program provided health coverage to 
approximately 116,000 beneficiaries, which was approximately 14 percent of 
the States population.16, 17  In FY 2015, combined Federal and State 
expenditures for South Dakotas Medicaid program were approximately 
$860 million.18 
South Dakota MFCU 
The Unit, a division of the South Dakota Office of the Attorney General, 
investigates and prosecutes cases of Medicaid fraud and patient abuse.  At 
the time of our review, the Unit employed five staff members including the 
director, the senior investigator, an investigator, an auditor, and an 
administrative analyst. 
Referrals.  The Unit receives referrals from a variety of sources, including 
the State Medicaid agency, health care providers, local law enforcement, and 
OIG.  Appendix B depicts Unit referrals by referral source for 
FYs 2013 through 2015.   
Generally, referrals provided to the Unit are received and reviewed by the 
administrative analyst.  The administrative analyst also gathers any 
additional information needed before forwarding the referral to the director.  
The Unit director reviews all referrals and ultimately decides whether to 
open a case. 
Investigations and prosecutions.  The Unit uses a team approach to 
investigate and prosecute cases.  Typically, the team is comprised of at least 
one investigator, an auditor, and the director (who serves as the attorney).  
For each case, either an investigator or auditor is assigned as the team leader.  
The team leader is responsible for coordinating case activities, including 
collecting, reviewing, and analyzing documents; interviewing witnesses; 
______________________________________________________ 
16 CMS, South Dakota Comprehensive Program Integrity Review:  Final Report, January 
2015. 
17 World Population Statistics, South Dakota Population 2013.  Accessed at 
http://www.worldpopulationstatistics.com/south-dakota-population-2013/ on 
June 10, 2016. 
18 OIG, MFCU Statistical Data for Fiscal Year 2015.  Accessed at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2015-statistical-chart.htm on February 16, 2016. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   3 
     
   
serving subpoenas; assisting in search warrants; and preparing factual 
findings.  The director provides legal expertise and guidance to the 
investigative team and, as appropriate, prepares the case for prosecution. 
Previous OIG Onsite Review 
In 2009, OIG conducted an onsite review of the South Dakota Unit.  The 
review found that although the Unit investigator worked under the direction 
of the Unit director; the Unit director did not personally approve or sign the 
investigators performance evaluation.  OIG policy requires that all MFCU 
staff work under the supervision and direction of the Unit.19  As a result, 
OIG recommended that the Unit director or the senior investigator should 
approve and sign the investigators performance evaluation.  The Unit 
concurred with the recommendation.  For the current review, we confirmed 
with the Unit director that all Unit staff work under his supervision.20 
METHODOLOGY 
We conducted an onsite review in April 2016.  We based our review on an 
analysis of data from six sources:  (1) policies, procedures, and 
documentation related to the Units operations, staffing, and caseload; 
(2) financial documentation for FYs 2013 through 2015; (3) structured 
interviews with key stakeholders; (4) structured interviews with the Units 
staff; (5) a review of files for cases that were open at some point during 
FYs 2013 through 2015; and (6) observation of Unit operations.  
Appendix C provides details of our methodology.   
Standards 
These reviews are conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
______________________________________________________ 
19 OIG, State Fraud Policy Transmittal No. 2014-1, Employment and Reimbursement of 
Full- and Part-Time Staff and Performance of Non-MFCU Duties, June 3, 2014. 
20 During our onsite review in April 2016, the Unit director stated that prior to 2016, the 
South Dakota Attorney Generals Office did not conduct formal performance evaluations 
of its staff.  The MFCU is located within the South Dakota Attorney Generals Office and 
as a result, formal performance evaluations were not conducted for any MFCU staff.  The 
Attorney Generals Office began conducting formal performance evaluations in 2016. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   4 
     
   
FINDINGS 
For FYs 2013 through 2015, the South Dakota Unit 
reported 5 criminal convictions, 12 civil judgments 
and settlements, and combined criminal and civil 
recoveries of $7 million 
For FYs 2013 through 2015, the Unit reported 5 criminal convictions and 
12 civil judgments and settlements.  See Table 1 for yearly convictions 
and civil judgments and settlements.  Of the Units five convictions over 
the 3-year period, four involved provider fraud, and one involved patient 
abuse or neglect. 
Table 1:  South Dakota MFCU Criminal Convictions and Civil 
Judgments and Settlements, FYs 20132015 
3-Year 
Outcomes  FY 2013  FY 2014  FY 2015  Total 
Criminal Convictions  2  1  2  5 
Civil Judgments and Settlements  0  6  6  12 
Source:  OIG analysis of Unit-submitted documentation, 2016. 
For the same period, the Unit reported combined criminal and civil 
recoveries of approximately $7 million.  See Table 2 for the Units yearly 
recoveries and expenditures.  The majority of the recoveries were obtained 
from global cases, which accounted for 86 percent of all recoveries 
during the 3-year review period.21 
Table 2:  South Dakota MFCU Recoveries and Expenditures, 
FYs 20132015* 
Type of Recovery  FY 2013  FY 2014  FY 2015  3-Year Total 
Global Civil  $2,673,918  $3,386,939  $75,100  $6,135,958 
Nonglobal Civil  $14,790  $466,251  $87,047  $568,088 
Criminal  $365,165  $566  $27,680  $393,411 
     Total Recoveries  $3,053,873  $3,853,756  $189,827  $7,097,457 
     Total Expenditures  $396,605  $409,564  $423,691  $1,229,861 
Source:  OIG analysis of Unit-submitted documentation, 2016. 
* Due to rounding, dollar amounts for each category of recoveries do not always sum to the total recovery amount. 
South Dakotas global recoveries declined from more than $3 million in 
FY 2014 to approximately $75,000 in FY 2015.  This is consistent with a 
______________________________________________________ 
21 Global cases are civil false claims actions involving the U.S. Department of Justice and 
other State MFCUs.  The National Association of Medicaid Fraud Control Units 
facilitates the settlement of global cases. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   5 
     
   
national trend of declining civil health care fraud complaints and 
settlements, especially those involving pharmaceutical companies.22 
In FY 2013, the Unit did not report program income 
properly 
The Unit did not report as program income $1,000 it received for 
investigative costs incurred while investigating a patient abuse case in 
FY 2013.  Consistent with Federal regulation, OIG policy states that any 
funds received by the Unitincluding reimbursements for expenses 
incurred during patient abuse investigationsthat meet the definition of 
program income must be reported on the Units Federal financial 
expenditure reports.23  The terms and conditions of the grant award and 
OIG policy require that these funds be deducted from total costs under the 
grant.24, 25  Because the Unit did not follow OIG policy of reporting and 
deducting this program income, the Unit withdrew $750 more from the 
HHS Payment Management System than it was entitled to receive.26  Since 
our review, the Unit has worked with OIG to reimburse the overdrawn 
funds. 
Unit professional staff performed non-Unit duties, and 
the associated costs were not subtracted from 
claimed Unit expenditures 
For FYs 2013 through 2015, a Unit investigator performed non-Unit 
duties, and the associated costs were not subtracted from claimed Unit 
expenditures.  Federal regulations state that a Unit may only claim Federal 
reimbursement for costs attributable to the establishment and operation of 
______________________________________________________ 
22 From the 1990s through the early 2000s, a significant number of pharmaceutical 
companies were the subject of large monetary settlements in civil fraud actions.  As a 
condition of those settlements, pharmaceutical companies were required to adopt 
corporate integrity agreements designed to prevent future abusive practices.  Other 
corporations have adopted voluntary compliance programs, promoted by OIG, which 
may have further reduced the incidence of fraud allegations.  See OIG Compliance 
Program Guidance for Pharmaceutical Manufacturers, 68 Fed. Reg. 23731 
(May 5, 2003), available at 
http://www.oig.hhs.gov/authorities/docs/03/050503FRCPGPharmac.pdf.  
23 45 CFR  92.25 (2013); OIG State Fraud Policy Transmittal 10-01, Program Income 
(March 22, 2010). 
24 OIG, General Terms and Conditions.  Accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/terms-conditions.asp on June 2, 2016. 
25 OIG, State Fraud Policy Transmittal 10-01, Program Income (March 22, 2010). 
26 This amount represents the Federal share (75 percent) of the Units budget; in this case, 
$750 of the $1,000 total expenses.  The State is responsible for the remaining 25 percent 
of the $1,000 total ($250).  OIG policy requires Units to deduct program income from 
their total costs under the grant, pursuant to 45 CFR  95.25(g)(1), thus making the 
75-percent share unallowable.   
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   6 
     
   
the Unit.27  During the review period, the investigator occasionally 
conducted background investigations for other divisions of the Office of 
Attorney General, amounting to 40 hours.  These activities were not 
attributable to the investigation and prosecution of Medicaid fraud or 
patient abuse or neglect.  Since our review, the Unit has worked with OIG 
to reimburse these funds. 
 
Half of the Units case files lacked documentation of 
periodic supervisory reviews; however, the supervisor 
documented the opening and closing of all cases 
Fifty-one percent of the Units case files lacked documentation of 
consistent periodic supervisory review required by Unit policy.  Of the 
19 cases that did not include all required periodic reviews, 15 had at least 
one supervisory review documented in the case file.  Performance 
Standard 7(a) states that supervisory reviews should be conducted 
periodically, consistent with the Units policies and procedures, and noted 
in the case file.28  Further, the Units policy requires that supervisory 
reviews occur quarterly and be documented in the case file.29  Periodic 
supervisory reviews can help ensure timely completion of cases and may 
identify potential issues during the investigation. 
All of the Units 65 case files included documentation of supervisory 
approval to open the case; all of the case files for the Units 59 closed 
cases included documentation of supervisory approval to close the case.30  
Performance Standard 5(b) states that Unit supervisors should approve the 
opening and closing of all cases.31  Supervisory approval to open cases 
indicates that Unit supervisors are monitoring the intake of cases, thereby 
facilitating progress in the investigation.  Further, supervisory approval of 
case closing helps ensure the timely completion and resolution of cases. 
The Unit did not report all convictions and adverse 
actions to Federal partners within required timeframes 
The Unit did not report all convictions to OIG for the purpose of program 
exclusion or all adverse actions to the National Practitioner Data Bank 
(NPDB) within the required timeframes.  Performance Standard 8(f) states 
______________________________________________________ 
27 42 CFR  1007.19(d). 
28 77 Fed. Reg. 32647 (June 1, 2012). 
29 The Unit began using a form to document supervisory reviews in November 2013. 
30 For FYs 2013 through 2015, the Unit had a total of 65 cases.  We reviewed case files 
for all 65 cases.  Fifty-nine of the Units 65 cases were closed at the start of the onsite 
review. 
31 77 Fed. Reg. 32647 (June 1, 2012). 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   7 
     
   
that the Unit should transmit to OIG reports of all convictions for the 
purpose of exclusion from Federal health care programs within 30 days of 
sentencing.32  Additionally, Federal regulations require that the Unit report 
any adverse actions resulting from investigations or prosecutions of 
healthcare providers to the NPDB within 30 days.33 
The Unit did not always report its convictions to OIG within 
required timeframes 
Of the Units five convictions that should have been reported to OIG, three 
were not reported within 30 days of sentencing, as required.  Specifically, 
the Unit reported one conviction 255 days late, one conviction 230 days 
late, and one conviction 25 days late.  Late reporting of convictions to OIG 
delays the initiation of the program exclusion process, which may result in 
improper payments to providers by Medicare or other Federal health care 
programs or possible harm to beneficiaries. 
According to the Unit, the convictions were not reported in a timely manner 
due to what the Unit termed administrative error.  The Unit director stated 
that the Unit thought that another entity would report the convictions to 
OIG.  Once the Unit realized that the convictions were not reported, the 
Unit reported them to OIG.  Upon case closing, the Units policy requires 
that staff report the conviction information to OIG.  The director affirmed 
that the Unit values the OIG exclusion process and educates State 
prosecutors about the importance of reporting convictions to OIG for the 
purpose of exclusion. 
The Unit did not always report its adverse actions to the NPDB 
within required timeframes 
Of the five adverse actions that should have been reported to the NPDB, 
three were not reported within 30 days of the final action as required.  
Specifically, the Unit reported one adverse action 255 days late, one adverse 
action 230 days late, and one adverse action 25 days late.  The NPDB is 
intended to restrict the ability of physicians, dentists, and other health care 
practitioners to move from State to State without disclosure or discovery 
of previous medical malpractice and adverse actions.  If a Unit fails to 
report adverse actions to the NPDB, individuals may be able to find new 
______________________________________________________ 
32 Ibid. at 32648. 
33 45 CFR  60.5.  Both Federal regulations and the Performance Standards require Units 
to report to NPDB.  Performance Standard 8(g) states that the Unit should report 
qualifying cases to the Healthcare Integrity & Protection Databank [HIPDB], the 
National Practitioner Data Bank, or successor data bases. Examples of final adverse 
actions include, but are not limited to, convictions, civil judgments (but not civil 
settlements), and program exclusions.  See SSA  1128E(g)(1) and 45 CFR  60.3. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   8 
     
   
healthcare employment with an organization that is not aware of their 
adverse actions. 
The Unit director also attributed the Units not reporting adverse actions in a 
timely manner to administrative error.  The Unit director stated that the Unit 
thought that another entity would report the adverse actions to the NPDB.  
Once the Unit realized that the actions were not reported, the Unit reported 
them to the NPDB.  Upon case closing, the Units policy also requires that 
staff report adverse actions to the NPDB.   
Other observation:  Only a small portion of Unit fraud 
referrals8 percentcame from the State Medicaid 
agencys Program Integrity Unit  
Over the course of 3 years, the State Medicaid agencys Program Integrity 
(PI) Unit provided only 8 percent of the Units fraud referrals; half as 
many as from private citizens.34  The PI referrals included six fraud 
referrals in FY 2013, but only one fraud referral each in FY 2014 and 
FY 2015.  Typically, referrals from the PI Unit are an essential component 
of a Units ability to effectively investigate and prosecute Medicaid 
provider fraud.  The Unit director stated that the PI Unit may be 
understaffed.  The PI Unit director stated that the PI Unit has a staffing 
issue (i.e., the PI Unit has only three staff).  As of March 2016, the PI Unit 
had only two investigators responsible for detecting Medicaid provider 
fraud.  The limited number of staff within the PI Unit may have affected 
the PI Units ability to provide referrals to the MFCU.35   
Other observation:  The Unit uses peer education as a 
fraud deterrent 
In a few cases, the Unit has recommended that providers investigated for 
Medicaid fraud educate peers as a means of deterring fraud.  The Unit 
director stated that on occasion, he has recommended that the judge 
include as part of sentencing, or has included in a settlement agreement, 
that the provider educate his/her peers about Medicaid fraud.  For 
instance, as a condition of a civil settlement agreement, a provider was 
required to give such a presentation with the Unit at an optometry 
______________________________________________________ 
34 Private citizens provided the Unit six fraud referrals in FY 2013, seven fraud referrals 
in FY 2014, and three fraud referrals in FY 2015. 
35 The Centers for Medicare & Medicaid Services (CMS) conducts reviews of each 
States Medicaid program integrity activities to assess the States effectiveness in 
combating Medicaid fraud, waste, and abuse.  In a 2015 report, CMS recommended that 
the South Dakota PI Unit determine an appropriate staffing level to ensure necessary 
oversight of program integrity operations.  CMS, South Dakota Comprehensive Program 
Integrity Review:  Final Report, January 2015. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   9 
     
   
conference.  As a condition of another providers suspended jail sentence, 
the provider presented alongside the Unit at the same conference.  A third 
provider also gave a presentation alongside the Unit at a social work 
association meeting as a result of a criminal sentencing recommendation.  
The Unit director stated that the Unit has received feedback from both 
providers making the presentations and audience members that such 
presentations are helpful in highlighting Medicaid billing issues and 
deterring fraud.   
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   10 
     
   
CONCLUSION AND RECOMMENDATIONS 
For FYs 2013 through 2015, the South Dakota Unit reported 5 criminal 
convictions, 12 civil judgments and settlements, and combined criminal 
and civil recoveries of $7 million. 
The South Dakota Unit was found to be in general compliance with 
applicable laws, regulations, and policy transmittals, with some 
exceptions.  Specifically, the Unit did not report program income properly 
in FY 2013; and a Unit investigator performed non-Unit duties, for which 
associated costs were not subtracted from claimed Unit expenditures.  
With respect to adherence to the Performance Standards, the Unit did not 
always document periodic supervisory reviews in its case files, nor did it 
report all convictions and adverse actions to Federal partners in a timely 
manner.  In addition, we noted that only a small portion of Unit fraud 
referrals8 percentcame from the State Medicaid agencys PI Unit.  
We also noted that the Unit uses peer education as a means of deterring 
fraudulent conduct. 
We recommend that the South Dakota Unit: 
Deduct the Federal share for the unallowable withdrawal from 
current expenditures and ensure that all future program 
income is reported properly on Federal financial reports 
The Unit should continue to work with OIG to deduct $750 from current 
Federal expenditures to account for the unallowable withdrawal in 
FY 2013.  In addition, in the future the Unit should report its program 
income according to the guidelines in OIG State Fraud Policy Transmittal 
10-01.   
Reimburse the Federal share of unallowable personnel costs 
related to non-Unit duties and ensure that the Unit only claims 
Federal reimbursement for Unit-related duties 
The Unit should continue to work with OIG to reimburse the Federal share 
of the unallowable costs related to non-Unit duties.  The Unit should 
ensure that it only claims Federal reimbursement for appropriate Unit-
related duties. 
Implement processes to ensure that all case files include 
documentation of periodic supervisory reviews 
The Unit should implement processes to ensure that periodic supervisory 
reviews are documented consistent with the Units policy.  Such processes 
could include automated reminders to alert Unit staff when cases are due 
for periodic reviews and to ensure that documentation is maintained. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   11 
     
   
Implement processes to ensure that convictions and adverse 
actions are reported to Federal partners within required 
timeframes 
The Unit should implement processes to ensure that convictions are 
reported to OIG within 30 days and that adverse actions are reported to 
NPDB within 30 days.  Such processes could include automated reminders 
to alert Unit staff when to report convictions and adverse actions to 
Federal partners. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   12 
     
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
The South Dakota Unit concurred with all four of our recommendations.   
Regarding the first recommendation, the Unit stated that it has deducted 
the $750 from current Federal expenditures.  Additionally, the Unit stated 
it will use memo and checklist reminders to ensure that program income is 
properly handled in the future. 
Regarding the second recommendation, the Unit stated that it has deducted 
from current Federal expenditures the $1,157.94 Federal share of 
unallowable personnel costs related to non-Unit duties.  Additionally, the 
Unit stated that it has provided written instructions to Unit staff and to the 
South Dakota Attorney Generals fiscal staff regarding accounting for non-
Unit duties. 
Regarding the third recommendation, the Unit stated that it has 
transitioned to the use of new forms to document quarterly supervisory 
reviews.  The Unit also stated that it also has placed reminders in their 
calendar system to help ensure the quarterly reviews take place. 
Regarding the fourth recommendation, the Unit stated that it has set 
automated reminders to alert Unit staff to report convictions and adverse 
actions to Federal partners. 
The Units comments are provided in Appendix D. 
   
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   13 
     
   
APPENDIX A 
2012 Performance Standards36  
1.  A UNIT CONFORMS WITH ALL APPLICABLE STATUTES, REGULATIONS, AND POLICY DIRECTIVES, 
INCLUDING: 
A.  Section 1903(q) of the Social Security Act,  containing the basic requirements for operation of a MFCU; 
B.  Regulations for operation of a MFCU contained in 42 CFR part 1007; 
C.  Grant administration requirements at 45 CFR part 92 and Federal cost principles at 2 CFR part 225; 
D.  OIG policy transmittals as maintained on the OIG Web site; and  
E.  Terms and conditions of the notice of the grant award. 
2.  A UNIT MAINTAINS REASONABLE STAFF LEVELS AND OFFICE LOCATIONS IN RELATION TO THE 
STATES MEDICAID PROGRAM EXPENDITURES AND IN ACCORDANCE WITH STAFFING 
ALLOCATIONS APPROVED IN ITS BUDGET.   
A.  The Unit employs the number of staff that is included in the Units budget estimate as approved by OIG. 
B.  The Unit employs a total number of professional staff that is commensurate with the States total Medicaid 
program expenditures and that enables the Unit to effectively investigate and prosecute (or refer for 
prosecution) an appropriate volume of case referrals and workload for both Medicaid fraud and patient abuse 
and neglect. 
C.  The Unit employs an appropriate mix and number of attorneys, auditors, investigators, and other 
professional staff that is both commensurate with the States total Medicaid program expenditures and that 
allows the Unit to effectively investigate and prosecute (or refer for prosecution) an appropriate volume of case 
referrals and workload for both Medicaid fraud and patient abuse and neglect. 
D.  The Unit employs a number of support staff in relation to its overall size that allows the Unit to operate 
effectively. 
E.  To the extent that a Unit maintains multiple office locations, such locations are distributed throughout the 
State, and are adequately staffed, commensurate with the volume of case referrals and workload for each 
location. 
3.  A UNIT ESTABLISHES WRITTEN POLICIES AND PROCEDURES FOR ITS OPERATIONS AND 
ENSURES THAT STAFF ARE FAMILIAR WITH, AND ADHERE TO, POLICIES AND PROCEDURES.   
A.  The Unit has written guidelines or manuals that contain current policies and procedures, consistent with 
these performance standards, for the investigation and (for those Units with prosecutorial authority) prosecution 
of Medicaid fraud and patient abuse and neglect.  
B.  The Unit adheres to current policies and procedures in its operations. 
C.  Procedures include a process for referring cases, when appropriate, to Federal and State agencies.  
Referrals to State agencies, including the State Medicaid agency, should identify whether further investigation 
or other administrative action is warranted, such as the collection of overpayments or suspension of payments. 
D.  Written guidelines and manuals are readily available to all Unit staff, either online or in hard copy. 
E.  Policies and procedures address training standards for Unit employees. 
4.  A UNIT TAKES STEPS TO MAINTAIN AN ADEQUATE VOLUME AND QUALITY OF REFERRALS FROM 
THE STATE MEDICAID AGENCY AND OTHER SOURCES.   
A.  The Unit takes steps, such as the development of operational protocols, to ensure that the State Medicaid 
agency, managed care organizations, and other agencies refer to the Unit all suspected provider fraud cases.  
Consistent with 42 CFR 1007.9(g), the Unit provides timely written notice to the State Medicaid agency when 
referred cases are accepted or declined for investigation. 
B.  The Unit provides periodic feedback to the State Medicaid agency and other referral sources on the 
adequacy of both the volume and quality of its referrals. 
______________________________________________________ 
36 77 Fed. Reg. 32646, June 1, 2012. 
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C.  The Unit provides timely information to the State Medicaid or other agency when the Medicaid or other 
agency requests information on the status of MFCU investigations, including when the Medicaid agency 
requests quarterly certification pursuant to 42 CFR 455.23(d)(3)(ii). 
D.  For those States in which the Unit has original jurisdiction to investigate or prosecute patient abuse and 
neglect cases, the Unit takes steps, such as the development of operational protocols, to ensure that pertinent 
agencies refer such cases to the Unit, consistent with patient confidentiality and consent.  Pertinent agencies 
vary by State but may include licensing and certification agencies, the State Long Term Care Ombudsman, and 
adult protective services offices.  
E.  The Unit provides timely information, when requested, to those agencies identified in (D) above regarding 
the status of referrals. 
F.  The Unit takes steps, through public outreach or other means, to encourage the public to refer cases to the 
Unit. 
5.  A UNIT TAKES STEPS TO MAINTAIN A CONTINUOUS CASE FLOW AND TO COMPLETE CASES IN 
AN APPROPRIATE TIMEFRAME BASED ON THE COMPLEXITY OF THE CASES. 
A.  Each stage of an investigation and prosecution is completed in an appropriate timeframe. 
B.  Supervisors approve the opening and closing of all investigations and review the progress of cases and take 
action as necessary to ensure that each stage of an investigation and prosecution is completed in an 
appropriate timeframe. 
C.  Delays to investigations and prosecutions are limited to situations imposed by resource constraints or other 
exigencies.   
6.  A UNITS CASE MIX, AS PRACTICABLE, COVERS ALL SIGNIFICANT PROVIDER TYPES AND 
INCLUDES A BALANCE OF FRAUD AND, WHERE APPROPRIATE, PATIENT ABUSE AND NEGLECT 
CASES.   
A.  The Unit seeks to have a mix of cases from all significant provider types in the State. 
B.  For those States that rely substantially on managed care entities for the provision of Medicaid services, the 
Unit includes a commensurate number of managed care cases in its mix of cases.  
D.  As part of its case mix, the Unit maintains a balance of fraud and patient abuse and neglect cases for those 
States in which the Unit has original jurisdiction to investigate or prosecute patient abuse and neglect cases. 
C.  The Unit seeks to allocate resources among provider types based on levels of Medicaid expenditures or 
other risk factors.  Special Unit initiatives may focus on specific provider types. 
E.  As part of its case mix, the Unit seeks to maintain, consistent with its legal authorities, a balance of criminal 
and civil fraud cases. 
7.  A UNIT MAINTAINS CASE FILES IN AN EFFECTIVE MANNER AND DEVELOPS A CASE 
MANAGEMENT SYSTEM THAT ALLOWS EFFICIENT ACCESS TO CASE INFORMATION AND OTHER 
PERFORMANCE DATA.   
A.  Reviews by supervisors are conducted periodically, consistent with MFCU policies and procedures, and are 
noted in the case file. 
B.  Case files include all relevant facts and information and justify the opening and closing of the cases. 
C.  Significant documents, such as charging documents and settlement agreements, are included in the file.  
D.  Interview summaries are written promptly, as defined by the Units policies and procedures. 
E.  The Unit has an information management system that manages and tracks case information from initiation to 
resolution. 
F.  The Unit has an information management system that allows for the monitoring and reporting of case 
information, including the following:  
1.  The number of cases opened and closed and the reason that cases are closed. 
2.  The length of time taken to determine whether to open a case referred by the State Medicaid agency or other 
referring source. 
3.  The number, age, and types of cases in the Units inventory/docket 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   15 
     
   
4.  The number of referrals received by the Unit and the number of referrals by the Unit to other agencies. 
5.  The number of cases criminally prosecuted by the Unit or referred to others for prosecution, the number of 
individuals or entities charged, and the number of pending prosecutions. 
6.  The number of criminal convictions and the number of civil judgments. 
7.  The dollar amount of overpayments identified. 
8.  The dollar amount of fines, penalties, and restitution ordered in a criminal case and the dollar amount of 
recoveries and the types of relief obtained through civil judgments or prefiling settlements. 
8.  A UNIT COOPERATES WITH OIG AND OTHER FEDERAL AGENCIES IN THE INVESTIGATION AND 
PROSECUTION OF MEDICAID AND OTHER HEALTH CARE FRAUD.   
A.  The Unit communicates on a regular basis with OIG and other Federal agencies investigating or prosecuting 
health care fraud in the State. 
B.  The Unit cooperates and, as appropriate, coordinates with OIGs Office of Investigations and other Federal 
agencies on cases being pursued jointly, cases involving the same suspects or allegations, and cases that have 
been referred to the Unit by OIG or another Federal agency.  
C.  The Unit makes available, to the extent authorized by law and upon request by Federal investigators and 
prosecutors, all information in its possession concerning provider fraud or fraud in the administration of the 
Medicaid program. 
D.  For cases that require the granting of extended jurisdiction to investigate Medicare or other Federal health 
care fraud, the Unit seeks permission from OIG or other relevant agencies under procedures as set by those 
agencies.  
E.  For cases that have civil fraud potential, the Unit investigates and prosecutes such cases under State 
authority or refers such cases to OIG or the U.S. Department of Justice. 
F.  The Unit transmits to OIG, for purposes of program exclusions under section 1128 of the Social Security Act, 
all pertinent information on MFCU convictions within 30 days of sentencing, including charging documents, plea 
agreements, and sentencing orders. 
G.  The Unit reports qualifying cases to the Healthcare Integrity & Protection Databank, the National Practitioner 
Data Bank, or successor data bases. 
9.  A UNIT MAKES STATUTORY OR PROGRAMMATIC RECOMMENDATIONS, WHEN WARRANTED, TO 
THE STATE GOVERNMENT.   
A.  The Unit, when warranted and appropriate, makes statutory recommendations to the State legislature to 
improve the operation of the Unit, including amendments to the enforcement provisions of the State code. 
B.  The Unit, when warranted and appropriate, makes other regulatory or administrative recommendations 
regarding program integrity issues to the State Medicaid agency and to other agencies responsible for Medicaid 
operations or funding.  The Unit monitors actions taken by the State legislature and the State Medicaid or other 
agencies in response to recommendations.  
10.  A UNIT PERIODICALLY REVIEWS ITS MEMORANDUM OF UNDERSTANDING (MOU) WITH THE 
STATE MEDICAID AGENCY TO ENSURE THAT IT REFLECTS CURRENT PRACTICE, POLICY, AND 
LEGAL REQUIREMENTS.   
A.  The MFCU documents that it has reviewed the MOU at least every 5 years, and has renegotiated the MOU 
as necessary, to ensure that it reflects current practice, policy, and legal requirements. 
B.  The MOU meets current Federal legal requirements as contained in law or regulation, including 42 CFR  
455.21, Cooperation with State Medicaid fraud control units, and 42 CFR  455.23, Suspension of payments 
in cases of fraud. 
C.  The MOU is consistent with current Federal and State policy, including any policies issued by OIG or the 
Centers for Medicare & Medicaid Services (CMS). 
D.  Consistent with Performance Standard 4, the MOU establishes a process to ensure the receipt of an 
adequate volume and quality of referrals to the Unit from the State Medicaid agency. 
E.  The MOU incorporates by reference the CMS Performance Standard for Referrals of Suspected Fraud from 
a State Agency to a Medicaid Fraud Control Unit. 
11.  A UNIT EXERCISES PROPER FISCAL CONTROL OVER UNIT RESOURCES.   
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A.  The Unit promptly submits to OIG its preliminary budget estimates, proposed budget, and Federal financial 
expenditure reports.   
B.  The Unit maintains an equipment inventory that is updated regularly to reflect all property under the Units 
control. 
C.  The Unit maintains an effective time and attendance system and personnel activity records. 
D.  The Unit applies generally accepted accounting principles in its control of Unit funding. 
E.  The Unit employs a financial system in compliance with the standards for financial management systems 
contained in 45 CFR 92.20. 
12.  A UNIT CONDUCTS TRAINING THAT AIDS IN THE MISSION OF THE UNIT.   
A.  The Unit maintains a training plan for each professional discipline that includes an annual minimum number 
of training hours and that is at least as stringent as required for professional certification.  
B.  The Unit ensures that professional staff comply with their training plans and maintain records of their staffs 
compliance. 
C.  Professional certifications are maintained for all staff, including those that fulfill continuing education 
requirements. 
D.  The Unit participates in MFCU-related training, including training offered by OIG and other MFCUs, as such 
training is available and as funding permits. 
E.  The Unit participates in cross-training with the fraud detection staff of the State Medicaid agency.  As part of 
such training, Unit staff provide training on the elements of successful fraud referrals and receive training on the 
role and responsibilities of the State Medicaid agency.  
 
 
 
 
 
 
   
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   17 
     
   
APPENDIX B 
Unit Referrals by Referral Source for FYs 2013 Through 2015 
 
  FY 2013  FY 2014  FY 2015 
Abuse &  Abuse &  Abuse & 
Referral Source  Fraud  Fraud  Fraud  Total 
Neglect1  Neglect  Neglect 
State Medicaid agency  
6  1  1  0  1  0  9 
Program Integrity Unit 
State Medicaid agency 
0  0  0  0  1  0  1 
other 
Managed care 
0  0  0  0  0  0  0 
organizations 
State survey and 
0  6  1  6  0  0  13 
certification agency 
Other State agencies  0  2  0  0  0  0  2 
Licensing board  0  1  0  0  0  1  2 
Law enforcement    1  2  1  1  0  0  5 
Office of Inspector 
1  1  2  0  4  0  8 
General   
Prosecutors  0  0  0  0  0  0  0 
Providers  0  0  0  0  0  0  0 
Provider associations  0  0  0  0  0  0  0 
Private health insurer  3  0  0  0  0  0  3 
Ombudsman  0  0  0  0  0  0  0 
Adult protective services     0  3  1  4  0  1  9 
Private citizens  6  1  7  0  3  0  17 
MFCU hotline2  0  0  0  0  N/A  N/A  0 
Anonymous3  N/A  N/A  N/A  N/A  0  0  0 
Other  31  0  25  0  0  0  56 
   Total  48  17  38  11  9  2  125 
 
   Annual Total  65  49  11 
Source:  OIG analysis of Unit Quarterly and Annual Statistical Reports, FYs 20132015, 2016. 
1 The category of abuse & neglect referrals includes patient funds referrals. 
2 The referral source MFCU hotline was not a category reported on the FY 2015 Annual Statistical Report. 
3 The referral source Anonymous was not a category reported on the FY 2013 and FY 2014 Quarterly Statistical Reports.  
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   18 
     
   
APPENDIX C 
Detailed Methodology 
Data collected from the seven sources below was used to describe the 
caseload and assess the performance of the South Dakota MFCU. 
Data Collection  
Review of Unit Documentation.  We collected information for FYs 2013 
through 2015 regarding the Units investigation of Medicaid cases, 
including information about the number of referrals the Unit received, the 
number of investigations the Unit opened and closed, the outcomes of 
those investigations, and the Units case mix.  We also collected and 
analyzed information about the number of cases that the Unit referred for 
prosecution and the outcomes of those prosecutions.   
We gathered information from several sources, including the Units 
quarterly statistical reports; its annual reports; its recertification 
questionnaire; its policies and procedures manual; and its MOU with the 
State Medicaid agency.  We requested any additional data or clarification 
from the Unit as necessary. 
Review of Unit Financial Documentation.  We reviewed the Units control 
over its fiscal resources to identify any internal control issues or other 
issues involving use of resources.  Prior to the onsite review, we reviewed 
the Units financial policies and procedures; its response to an internal 
control questionnaire; and documents (such as financial status reports) 
related to MFCU grants. 
We reviewed three purposive samples to assess the Units internal control 
of fiscal resources.  All three samples were limited to the review period of 
FYs 2013 through FY 2015.  The three samples included the following: 
1.  To assess the Units expenditures, we selected a purposive sample 
of 24 items from the Units 236 expenditure transactions.  We 
selected routine and nonroutine transactions representing a variety 
of budget categories and payment amounts. 
2.  To assess the Units travel expenditures, we selected a purposive 
sample of 25 items from the Units 155 travel transactions.  We 
selected a variety of travel expenditure categories related to both 
in-State and out-of-State travel, such as hotel stays, airfare, and 
conference expenses.   
3.  To assess employees time and efforti.e., their work hours 
spent on various MFCU taskswe selected a sample of three pay 
periods, one from each fiscal year.  We then requested and 
reviewed documentation (e.g., time card records) to support the 
time and effort of the MFCU staff during the selected pay periods. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   19 
     
   
We also reviewed a purposive sample of the Units supply inventory.  
Specifically, we selected and verified a purposive sample of 26 items from 
the current inventory list of 29 items maintained in the Units office.   
Interviews with Key Stakeholders.  In March 2016, we interviewed key 
stakeholders, including officials in the United States Attorneys Offices, 
the State Attorney Generals Office, and other State agencies that 
interacted with the Unit (e.g., the Medicaid Program Integrity Unit, 
Department of Human Services, and Department of Health).  We also 
interviewed supervisors from OIGs Region VII Office of Investigations 
who work regularly with the Unit.  We focused these interviews on the 
Units relationship and interaction with OIG and other Federal and State 
authorities and opportunities for improvement.  We used the information 
collected from these interviews to develop subsequent interview questions 
for Unit management. 
Onsite Interviews with Unit Staff.  We conducted structured interviews 
with the Units staff in April 2016.  We interviewed the Unit director, 
Senior Investigator, investigator, auditor, and administrative analyst.  We 
asked these individuals to provide information related to (1) the Units 
operations, (2) Unit practices that contributed to the effectiveness and 
efficiency of Unit operations and/or performance, (3)opportunities for the 
 
Unit to improve its operations and/or performance, and (4) clarification 
regarding information obtained from other data sources. 
Onsite Review of Case Files.  We requested that the Unit provide us with a 
list of cases that were open at any point during FYs 2013 through 2015.  
The Unit provided a list of 171 cases that were open during this period.  
For each of these 171 cases, the Unit provided data including the current 
status of the case; whether the case was criminal or civil; and the date on 
which the case was opened.  From this list of cases, we excluded 105 cases 
that were categorized as global 37 and 1 case that had been opened 
subsequent to the period of our review and thus should not have been 
included.  The remaining number of cases was 65. 
We selected all 65 cases for review.  From the population of 65 cases, we 
purposively assigned 33 for a more indepth review of selected issues, such 
as the timeliness of investigations and case development.  Of the 65 cases 
reviewed, 37 were open longer than 90 days and 59 were closed as of the 
start of the onsite review. 
______________________________________________________ 
37 Because global cases are civil false claims actions that typically involve multiple 
agencies, such as the U.S. Department of Justice and a group of State MFCUs, we 
exclude those cases from our review of a Units case files.  Therefore, we excluded 105 
cases that were categorized as global from the list of cases. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   20 
     
   
Based on the results of our review of the 65 case files, we reported:  
(1) the percentage of all case files that were open longer than 90 days that 
lacked documentation of periodic supervisory review, (2) the percentage 
of all case files that included documentation of supervisory approval for 
opening the case, and (3) the percentage of all closed case files that 
included documentation of supervisory approval for closing. 
Onsite Review of Unit Operations.  During our April 2016 onsite visit, we 
reviewed the Units workspace and operations.  Specifically, we visited 
the Unit headquarters in the State capital.  While onsite, we observed the 
Units offices and meeting spaces; security of data and case files; location 
of select equipment; and the general functioning of the Unit. 
Data Analysis 
We analyzed data to identify any opportunities for improvement and any 
instances in which the Unit did not fully meet the performance standards 
or was not operating in accordance with laws, regulations, or policy 
transmittals.38 
______________________________________________________ 
38 All relevant regulations, statutes, and policy transmittals are available online at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   21 
     
   
APPENDIX D 
Unit Comments 
 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   22 
     
   
 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   23 
     
   
 
   
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   24 
     
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Brian T. Whitley, Regional 
Inspector General for Evaluation and Inspections in the Kansas City 
regional office, and Jennifer King, Deputy Regional Inspector General; 
and in consultation with Richard Stern, Director of the Medicaid Fraud 
Policy and Oversight Division. 
Rae Hutchison, of the Kansas City regional office, served as the project 
leader for the study.  Other Office of Evaluation and Inspections staff who 
conducted the review include Abbi Warmker.  Other Medicaid Fraud 
Policy and Oversight Division staff who participated in the review include 
Susan Burbach.  Office of Investigations staff also participated in the 
review.  Other central office staff who contributed to this review include 
Kevin Farber, Lonie Kim, and Joanne Legomsky. 
South Dakota State Medicaid Fraud Control Unit:  2016 Onsite Review (OEI-07-16-00170)                                   25 
     
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS) programs, as  well  as the health  and welfare of individuals served by those programs.  
This statutory mission is carried  out through a nationwide network of audits, investigations,  
and inspections conducted by the following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of fraud and misconduct  related to HHS programs, operations, and individuals.  With  
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and  abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.