Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
V S M
IR  GINIA  TATE  EDICAID 
 
F C U :
  RAUD  ONTROL  NIT   
 
2015 O R  
NSITE  EVIEW
 
 
Suzanne Murrin 
Deputy Inspector General 
for Evaluation and Inspections 
 
August 2016 
OEI-07-15-00290   
   
EXECUTIVE SUMMARY:  VIRGINIA STATE MEDICAID FRAUD CONTROL 
UNIT:  2015 ONSITE REVIEW  
OEI-07-15-00290 
 
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 Virginia Unit in September 2015.  We based our 
review on an analysis of data from seven sources:  (1) policies, procedures, 
and documentation related to the Units operations, staffing, and caseload; (2) financial 
documentation for fiscal years (FYs) 2012 through 2014; (3) structured interviews with 
key stakeholders; (4) a survey of Unit staff; (5) structured interviews with the Units 
management; (6) a sample of files for cases that were open in FYs 2012 through 2014; 
and (7) observation of Unit operations. 
 
WHAT WE FOUND 
The Unit reported significant results and was in general compliance with applicable laws, 
regulations, and policy transmittals.  For FYs 2012 through 2014, the Virginia Unit 
reported 79 criminal convictions, 46 civil judgments and settlements, and combined 
criminal and civil recoveries of $1.1 billion.  This amounted to recovery of more than 
$34 for every $1 spent in the review period.  The Unit also maintained proper fiscal 
control of its resources.  We identified two practices that assisted the Unit in obtaining its 
results.  First, the Virginia Units partnerships with a variety of stakeholders led to 
successful Medicaid fraud prosecutions and increased recoveries.  Second, the Units use 
of specialty software improved its ability to process and share investigative information.   
 
However, we identified several areas where the Unit should improve its operations.  
Although the Units active case files generally contained the required supervisory 
reviews, the Units policy did not require supervisory reviews of monitored cases.  
Furthermore, the Units policy did not define what constituted a monitored case.  Also, 
the Unit did not report all convictions and adverse actions to Federal partners within 
required timeframes.   
 
WHAT WE RECOMMEND  
We recommend that the Virginia Unit revise its policy to define what constitutes a 
monitored case and indicate the appropriate level and frequency of supervisory review for 
such cases.  Further, the Unit should formalize its processes to ensure that convictions 
   
   
and adverse actions are consistently reported to Federal partners within required 
timeframes.  The Unit concurred with both recommendations.    
   
   
 
TABLE OF CONTENTS 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................4 
Findings........................................................................................................5 
For FYs 2012 through 2014, the Virginia Unit reported 
79 criminal convictions, 46 civil judgments and settlements, 
and combined criminal and civil recoveries of $1.1 billion .............5 
Unit policy requires supervisory review of active cases but not 
monitored cases; Unit policy does not define what constitutes a 
monitored case .................................................................................6 
The Unit did not report all convictions and adverse actions to 
Federal partners within required timeframes ...................................7 
The Unit maintained proper fiscal control of its resources ..............9 
Other observation:  The Virginia Units partnerships with a 
variety of stakeholders led to successful Medicaid fraud 
prosecutions and increased recoveries .............................................9 
Other observation:  The Units use of specialty software  
improved its ability to process and share investigative   
information ..................................................................................... 11 
Conclusion and Recommendations ............................................................12 
Unit Comments and Office of Inspector General Response ............14 
Appendixes ................................................................................................15 
A:  2012 Performance Standards ...................................................15 
B:  Virginia State Medicaid Fraud Control Unit Referrals by 
Referral Source for FYs 2012 Through 2014 ................................19 
C:  Investigations Opened and Closed By Provider Category for 
FYs 2012 Through 2014 ................................................................20 
D:  Detailed Methodology .............................................................22 
E:  Point Estimates and 95-Percent Confidence Intervals Based 
on Reviews of Case Files ...............................................................25 
F:  Unit Comments .........................................................................26 
Acknowledgements ....................................................................................28 
   
   
OBJECTIVE 
To conduct an onsite review of the Virginia 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 operation of a Unit would not be 
cost-effective because minimal Medicaid fraud exists in a particular State 
and 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 
provider 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 and 
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 April 13, 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).  
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  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 
$251 million, $188 million of which represented Federal funds.12   
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 Virginia MFCU.  During these onsite reviews, OIG evaluates Units 
compliance with laws, regulations, and policies, as well as adherence to the 
                        ____________________________________________________________ 
9 SSA  1903(q)(1). 
10 SSA  1903(a)(6)(B). 
11 Ibid.  
12 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 April 13, 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 59 Fed. Reg. 49080 (Sept. 26, 1994).  Accessed at http://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/files/Performance%20Standards.pdf on May 22, 2015.  On 
June 1, 2012, OIG published a revision of the performance standards at  
77 Fed. Reg. 32645.  Because our review covered FYs 2012 through 2014, we applied 
the standards published on June 1, 2012. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  2 
   
   
12 performance standards.  OIG also makes observations about best 
practices, provides recommendations to the Units, and monitors the 
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.  
Virginia MFCU 
The Unit, a division of the Virginia Office of the Attorney General, 
investigates and prosecutes cases of Medicaid fraud and patient abuse or 
neglect.  The Unit employs 98 staff, including investigators, attorneys, and 
auditors.16  The Virginia Unit has three regional offices and is the 
fifth-largest Unit in the nation, with total expenditures of approximately 
$11.1 million in combined State and Federal funds in FY 2015.17   
The Unit is broadly organized into two groups:  investigators and 
attorneys.  Both the investigators and the attorneys are split further into 
civil and criminal teams.  Each team is supervised by a chief investigator 
or chief attorney.  The Units two chief investigators report to the Deputy 
Director; the Units two chief attorneys report to the Chief Section  
Counsel. 
Referrals.  The Unit receives referrals from a variety of sources, including 
the State Medicaid agency, local law enforcement, and private citizens.  
Once the Unit receives a referral, the Units assigned attorney and 
investigator conduct a case conference that includes a preliminary case 
evaluation and consultation with the lead attorney to decide whether the 
case should be opened.  Appendix B depicts Unit referrals by referral 
source for FYs 2012 through 2014.   
Investigations and Prosecutions.  Per Unit policy, Unit management 
approves the opening of each case.  If the case is opened, the case will be 
routed to one of two tracks:  active or monitored.  Per Unit policy, 
investigative resources are assigned to active cases; investigative resources 
are available on an ad hoc basis for monitored cases.  Legal resources are 
assigned to both active and monitored cases.  The assigned investigator(s) 
are responsible for all investigative activity conducted for the case, under the 
                        ____________________________________________________________ 
16 The Virginia Unit has some investigators specifically designated as financial 
investigators, who fulfill the auditor function.  The Unit also employs administrative and 
paralegal staff.   
17 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 18, 2016.   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  3 
   
   
direction of the appropriate supervisor and chief.  The assigned attorney 
oversees the investigation, and is responsible for prosecuting the case.  
Appendix C provides detailed statistics on investigations opened and closed. 
The Unit conducts quarterly reviews of each active case.  During these 
reviews, each cases progress is discussed, and investigative steps for the 
next 30, 60, and 90 days are planned.  The Units policy requires that 
documentation of each quarterly review be maintained in the case file. 
Previous Onsite Review 
In 2009, OIG published a report on its onsite review of the Virginia Unit.  
OIG found that the Virginia Unit was in general compliance with all 
applicable Federal rules and regulations that govern the grant and the 
12 performance standards. 
METHODOLOGY 
Data Collection and Analysis 
We conducted the onsite review in September 2015.  We based our review 
on an analysis of data from seven sources:  (1) policies, procedures, and 
documentation related to the Units operations, staffing, and caseload; 
(2) financial documentation for FYs 2012 through 2014; (3) structured 
interviews with key stakeholders; (4) a survey of Unit staff; (5) structured 
interviews with the Units management; (6) a sample of files for cases that 
were open in FYs 2012 through 2014; and (7) observation of Unit 
operations.  We also used these data sources to determine if any issues 
related to findings from the previous OIG onsite review persisted.  
Appendix D provides details of our methodology.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  4 
   
   
FINDINGS 
Our review of the Virginia Unit found that it reported significant results 
and that it was generally in compliance with applicable laws, regulations, 
and policy transmittals.  The Unit reported over $1 billion in combined 
criminal and civil recoveries during the review period, with less than 
one-third of its recoveries derived from global settlements.18  The Unit 
recovered more than $34 for every $1 spent in the review period. 
However, we identified several areas where the Unit should improve its 
operations.  Although the Units active case files generally contained the 
required supervisory reviews, the Units policy did not require supervisory 
reviews of monitored cases.  Furthermore, the Units policy did not 
define what constituted a monitored case.  Also, the Unit did not report all 
convictions and adverse actions to Federal partners within required 
timeframes.   
For FYs 2012 through 2014, the Virginia Unit reported 
79 criminal convictions, 46 civil judgments and 
settlements, and combined criminal and civil 
recoveries of $1.1 billion 
For FYs 2012 through 2014, the Unit reported 79 criminal convictions and 
46 civil judgments and settlements.  Table 1 provides details of the Units 
yearly convictions and civil judgments and settlements.  Of the Units 
79 convictions over the 3-year period, 71 involved provider fraud, and 
8 involved patient abuse or neglect.   
Table 1:  Virginia MFCU Criminal Convictions and Civil Judgments 
and Settlements, FYs 20122014 
3-Year 
Outcomes  FY 2012  FY 2013  FY 2014  Total 
Criminal Convictions  24  21  34  79 
Civil Judgments and Settlements  12  11  23  46 
Source:  OIG analysis of Unit-submitted documentation, 2016. 
The Unit reported criminal and civil recoveries of $1.1 billion for 
FYs 2012 through 2014ranging from $28 million to $1 billion over the 
3 years (shown in Table 2).  During the 3-year review period, global 
cases accounted for less than one-third of the Units recoveries.   
                        ____________________________________________________________ 
18 Global cases are civil false claims actions involving the U.S. Department of Justice 
and a group of State MFCUs.  The National Association of Medicaid Fraud Control Units 
facilitates the settlement of global cases. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  5 
   
   
The Units recoveries in FY 2013 were particularly high.  In FY 2013, the 
Units criminal recoveries constituted nearly three-quarters of national 
MFCU criminal recoveries; the Units civil recoveries constituted nearly 
one-fifth of national MFCU civil recoveries.  Most of the Units criminal 
and civil recoveries in FY 2013 resulted from the settlement of a single 
case against Abbott Laboratories. 
Table 2:  Virginia MFCU Recoveries and Expenditures,                  
FYs 20122014 
Type of Recovery  FY 2012  FY 2013  FY 2014  3-Year Total 
Global Civil  $18,158,785  $304,548,889  $20,557,459  $343,265,133 
Nonglobal Civil  $6,915,766  $0  $42,439,402  $49,355,168  
Criminal  $3,587,917  $703,681,818  $1,725,971  $708,995,706 
     Total           
$28,662,468  $1,008,230,707  $64,722,832  $1,101,616,007 
Recoveries 
     Total 
$9,059,666  $11,249,106  $11,757,418  $32,066,190 
Expenditures 
  
Source:  OIG analysis of Unit-submitted documentation, 2016.  
Unit policy requires supervisory review of active cases 
but not monitored cases; Unit policy does not define 
what constitutes a monitored case 
Unit policy requires periodic supervisory reviews of active cases, but does 
not require supervisory review for monitored cases.19  We found that 
58 percent of the sampled cases were monitored cases, and only 7 percent 
of monitored cases had documented supervisory reviews in their 
respective case files.  Supervisory reviews generally occurred for active 
cases.   
For active cases, the Units policy requires a 30, 60, and 90-day 
investigation planning review and a quarterly case review meeting with 
senior staff.  Following each quarterly case review meeting, Unit policy 
requires the investigator assigned to the case to complete a case review 
form reflecting the issues discussed and investigative steps assigned.  The 
investigator is required to provide copies of this form to the appropriate 
supervisor and chief.  Unit policy requires the supervisor to place the form 
in the case file.   
For monitored cases, the Units policy requires periodic and continuous 
assessment to determine whether additional investigative effort is 
warrented.  Unit policy does not state what constitutes a monitored case. 
                        ____________________________________________________________ 
19 All references to Unit policy may be found in the Medicaid Fraud Control Unit, 
Virginia Office of the Attorney General Employee Manual, revised July 14, 2015.  The 
Unit has an updated manual effective January 13, 2016. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  6 
   
   
However, the Unit director stated that the Unit applied the term monitored 
cases tor civil cases forwhich the Unit was not expending resources to 
investigate the underlying allation(s).  Further, the Unit director reported 
that all but three of the monitored cases in our review were civil cases that 
were coordinated by the National Association of Medicaid Fraud Control 
Units (NAMFCU).  These three cases involved urgent care services not 
rendered, improper lab testing resulting in patient harm, and transportation 
services not rendered.   
Unit management reported to us that, in practice, Unit staff reevaluate the 
status of monitored cases during the life of the case, as more information 
regarding the allegations is identified.  Yet, for the two cases the Unit 
changed from an active to monitored status, we could not find 
documentation in the case files indicating how or why the status changed.   
Unlike active cases, the Units policy has no set periodicity schedule of 
supervisory review or formal review forms for monitored cases.  The 
Units policy states that the assigned counsel is responsible for making 
these assessments and that investigative resources are available for 
monitored cases on an ad hoc basis.   
 
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.  The Unit reported delays in 
receiving sentencing documentation from courts and a lack of clarity 
regarding what documentation OIG required as the reasons for the late 
reporting. 
The Unit did not report half of all convictions to OIG within 
required timeframes 
The Unit did not report 42 of its 79 convictions to OIG within 30 days of 
sentencing, as required by Federal regulations.  Table 4 shows how many 
days after sentencing these convictions were reported to OIG.  Performance 
Standard 8(f) states 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.  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. 
The Units management explained that delays in obtaining certified 
sentencing documents made it difficult to report all convictions to OIG 
within the required timeframe.  Within the Unit, one administrative staff 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  7 
   
   
person was responsible for reporting convictions to OIG.  Her 
understanding was that OIG required certified sentencing documents to 
report convictions for exclusion; however, she had not received formal 
guidance on this issue for several years.  Additionally, in 2012 and 2013, the 
Unit reported convictions to OIG quarterly; and in 2014, the Unit reported 
convictions to OIG monthly. 
In Summer 2015, OIG issued guidance clarifying that sentencing 
documents do not need to be certified to report a conviction to OIG.  The 
Unit is now aware of the reporting requirements, and it is reporting 
convictions to OIG as soon as they are received. 
Table 4:  Number of Convictions Reported to OIG After Required Timeframe 
Federal Partner  Convictions Reported  Convictions Reported  Convictions Reported  Total Convictions 
Reported To  Within 31 to 60 Days  Within 61 to 90 Days  More Than 90 Days  Reported More Than 
After Sentencing  After Sentencing  After Sentencing  30 Days After Sentencing  
OIG  23  9  10  42 
Source:  OIG analysis of Unit convictions and dates reported to OIG and NPDB, 2016. 
The Unit did not report half of all adverse actions to 
NPDB within required timeframes 
The Unit did not report 41 convictions to NPDB within 30 days of the 
adverse action.  Table 5 shows how many days after the action these 
convictions were reported to NPDB.  Federal regulations require that Units 
report any adverse actions generated as a result of investigations or 
prosecutions of healthcare providers to the NPDB within 30 calendar days 
of the date on which the final adverse action was taken.20  Performance 
Standard 8(g) also states that the Unit should report qualifying cases to 
NPDB.21  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 ensure that adverse actions are reported to 
the NPDB, individuals may be able to find new healthcare employment 
with an organization that is not aware of their adverse actions.   
                        ____________________________________________________________ 
20 45 CFR  60.5.   
21 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.  The HIPDB and the NPDB were merged during our 
review period (FYs 2012 through 2014); therefore, we reviewed the reporting of adverse 
actions under NPDB requirements.  78 Fed. Reg. 20473 (April 5, 2013).  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. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  8 
   
   
Table 5:  Number of Convictions Reported to NPDB After Required Timeframes 
Federal Partner  Convictions Reported  Convictions Reported  Convictions Reported  Total Convictions 
Reported To  Within 31 to 60 Days  Within 61 to 90 Days  More Than 90 Days  Reported More Than 
After the Action  After the Action  After the Action  30 Days After the Action  
NPDB  22  9  10  41 
Source:  OIG analysis of Unit convictions and dates reported to OIG and NPDB, 2016. 
The staff person responsible for reporting the Units convictions and adverse 
actions explained that reports cannot be entered into NPDB without certain 
information found only in the sentencing documents, such as duration of 
probation.  The Unit has an informal process for following up with courts to 
obtain sentencing documents.  This staff person stated that she requested 
preliminary sentencing documents from courts if the 30-day timeframe was 
approaching for a particular conviction.  If the court provided a preliminary 
sentencing document, the conviction was reported to NPDB based on that 
preliminary document.  However, some courts did not provide such 
documents.   
The Unit maintained proper fiscal control of its 
resources  
The Unit maintained proper fiscal control of its resources during the 
review period.  According to Performance Standard 11, the Unit should 
exercise proper fiscal control over the Units resources.  On the basis of 
the review OIG auditors conducted, the Units financial documentation 
indicated that the Units requests for reimbursement for FYs 2012 through 
2014 represented allowable, allocable, and reasonable costs.  In addition, 
the Unit maintained adequate internal controls relating to accounting, 
budgeting, personnel, procurement, property, and equipment.  
Other observation:  The Virginia Units partnerships 
with a variety of stakeholders led to successful 
Medicaid fraud prosecutions and increased recoveries 
Having effective partnerships with a variety of stakeholders can enhance a 
Units ability to prosecute Medicaid fraud, recover inappropriate 
payments, and achieve increased savings to Federal programs.  The 
Virginia Unit leveraged its partnerships with the Food and Drug 
Administration (FDA), the Internal Revenue Service (IRS), and the Social 
Security Administration to achieve significant results. 
The Units partnership with FDA enhanced the Units ability to 
successfully prosecute Medicaid fraud  
Unit staff reported that, in its joint investigations with FDA, shared 
technological and investigative resources led to the successful prosecution 
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of pharmaceutical manufacturers.  Many of these prosecutions were for 
the sale of misbranded drugs to nursing homes, long-term-care facilities, 
and hospitals.  The Unit Director stated that this partnership allowed the 
Unit to leverage resources effectively and provided unique insights into 
pharmaceutical investigations.  Because the FDA has staff with 
specialized investigative experience throughout the country, it was able to 
conduct interviews with witnesses nationwide.  FDA also can expedite 
access to information, such as new drug applications, that the Unit might 
not otherwise be able to access as easily.  The Unit Director reported that 
the partnership also allowed the Unit to access the significant forensic 
capabilities of the FDA.  This includes imaging electronic information 
onsite and providing significant staff support for execution of search 
warrants.   
The Units partnership with IRS resulted in increased State 
recoveries of inappropriate payments   
The Units largest-ever recoveries resulted from two investigations of 
large pharmaceutical manufacturers conducted jointly with IRS.  One of 
these cases resulted in $1.5 billion in total recoveriesthe highest total 
recoveries ever from a Medicaid fraud case investigated by a Unit.22  In 
these joint investigations, IRS financial experts helped Unit investigators 
and attorneys by tracing fraud proceeds so that the Unit could freeze 
assets.  Unit staff reported that IRSs expertise was particularly beneficial 
when the Units cases involved international corporations.  The IRS has 
the ability to track money to accounts outside of the United States and 
identify related organizations that may hold assets on behalf of target 
corporations. 
The Unit partnered with the Social Security Administration to 
achieve savings for State and Federal programs 
The Unit participates in a joint taskforce with the Social Security 
Administration which resulted in combined savings of $40 million, 
including ($10 million in savings to the Medicaid program and 
$30 million in savings to the Social Security program).  Some Unit 
investigators are detailed to the taskforce.  These investigators conduct 
surveillance on individuals suspected of fraudulently receiving disability 
benefits,23 and may observe these individuals participating in activities 
inconsistent with the disability on which those benefits are based.  For 
                        ____________________________________________________________ 
22 The $1.5 billion included a criminal fine and forfeiture totaling $700 million, and civil 
settlements totaling $800 million.  The Unit did not receive the entire $1.5 billion; rather, 
it was split among the Federal government and States participating in the case. 
23 The investigators detailed to the taskforce are funded by the Social Security 
Administration, not by the MFCU grant. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  10 
   
   
example, an investigator observed a disability recipient with a prosthetic 
leg coach a high school football team, demonstrating exercises to the 
players and mowing the football field after practice concluded.  This 
individual also posted photos to a social networking site showing himself 
engaged in rappelling and hunting. 
When individuals disability claims are shown to be false, as in the 
example above, the Social Security Administration disenrolls them from 
the disability program.  Since individuals receiving disability benefits are 
automatically eligible for Medicaid, disenrolling these individuals from 
the disability program eliminates their eligibility for Medicaid based on 
their disability status, resulting in savings to Medicaid.   
Other observation:  The Units use of specialty 
software improved its ability to process and share 
investigative information 
Because of the Units large civil caseload, the Unit invested in specialty 
software (i.e., e-discovery software) to improve its ability to process, 
track, and analyze evidence collected during the Units investigations.24  
Civil cases often involve multiple parties and take years to complete.  The 
Unit Director explained that it is not unusual for the Unit to process 
millions of documents during the course of some civil cases.  As the Unit 
Director described, [W]e couldnt [pursue these large cases] the 
old-fashioned way by going through boxes.  The e-discovery software 
used by the Unit can read the text in a document, analyze it for key words, 
subject matter, or other characteristics, and systematically code it 
according to criteria established by an analyst.   
Unit staff also reported that their e-discovery software allowed them to 
more easily share data with Federal and State partners.  The software 
allowed staff from partner agencies secure, offsite access to evidence, 
thereby facilitating the investigation and prosecution of the Units joint 
cases.  Unit staff and some stakeholder organizations also stated that the 
software increased the Units ability to work joint cases efficiently. 
   
                        ____________________________________________________________ 
24 E-discovery is short for electronic discovery.  Discovery is a phase of litigation in 
which the parties in a dispute must provide each other relevant information and records.  
When discovery is conducted on electronic documents, such as emails, Web sites, and 
databases, or using specialized software, it is referred to as e-discovery. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  11 
   
   
CONCLUSION AND RECOMMENDATIONS 
The Unit reported significant results during the review period, including 
79 criminal convictions and 46 civil judgments and settlements.  The Unit 
reported combined criminal and civil recoveries of $1.1 billion, and 
recovered more than $34 for every $1 spent in the review period.  We 
identified two practices that assisted the Unit in obtaining these results.  
The Unit partnered with a variety of stakeholders and used specialty 
software to help it successfully prosecute Medicaid fraud, maximize 
recoveries, and process and share investigative information with those 
partners.  In addition, our review of the Virginia Unit found that it was 
generally in compliance with applicable laws, regulations and policy 
transmittals and maintained proper fiscal control of its resources.    
However, we identified several areas where the Unit should improve its 
operations.  Although the Units active case files generally contained the 
required supervisory reviews, the Units policy did not require supervisory 
reviews of monitored cases.  Furthermore, the Units policy did not define 
what constituted a monitored case.  Also, the Unit did not report all 
convictions and adverse actions to Federal partners within required 
timeframes.   
 
We recommend that the Virginia Unit:  
 
Revise Unit policy to define what constitutes a monitored case 
and the level and frequency of supervisory review appropriate 
for such cases 
The Unit should revise its policy to: (1) define what constitutes a 
monitored case, as opposed to an active case, and provide information in 
the case file related to status changes, should they occur; and (2) 
determine the level of supervisory review appropriate for monitored cases, 
including the frequency of such reviews.  We recognize that the Unit has a 
large number of monitored cases that are not actively investigated.  
Therefore, the Unit should determine the level of review for monitored 
cases that best fits its need and available resources. 
Formalize its processes to ensure that convictions and adverse 
actions are consistently reported to Federal partners within 
required timeframes  
The Unit should formalize its processes to ensure that convictions are 
consistently reported to OIG within 30 days of sentencing and that adverse 
actions are reported to NPDB within 30 days of the action.  The Unit 
could accomplish this by documenting its process to contact the various 
courts to request preliminary sentencing documents for all convictions and 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  12 
   
   
adverse actions in its policies and procedures manual.  The Unit may also 
want to consider maintaining dated copies of its requests for sentencing 
documents.    
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  13 
   
   
UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
The Virginia Unit concurred with both of our recommendations. 
Regarding the first recommendation, the Unit stated that it has updated its 
Policy Manual to define a monitored case and establish a reasonable 
periodic supervisory review requirement for monitored cases. 
Regarding the second recommendation, the Unit stated that it has included 
in its Weekly Report, all individuals convicted and sentenced.  This will 
help Unit management monitor reporting to the appropriate agencies.  
The Units comments are provided in Appendix F. 
 
 
 
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  14 
   
   
APPENDIX A 
2012 Performance Standards25  
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. 
                        ____________________________________________________________ 
25 77 Fed. Reg. 32645, June 1, 2012. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  15 
   
   
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 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  16 
   
   
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. 
 
 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  17 
   
   
11.  A UNIT EXERCISES PROPER FISCAL CONTROL OVER UNIT RESOURCES.   
A.  The Unit promptly submits to OIG its preliminary budget estimates, proposed budget, and Federal financial 
expenditure reports.   
B.  The Unit maintains an equipment inventory that is updated regularly to reflect all property under the Units 
control. 
C.  The Unit maintains an effective time and attendance system and personnel activity records. 
D.  The Unit applies generally accepted accounting principles in its control of Unit funding. 
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.  
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  18 
   
   
APPENDIX B 
Virginia State Medicaid Fraud Control Unit Referrals by 
Referral Source for FYs 2012 Through 2014 
  FY 2012  FY 2013  FY 2014 
Abuse &  Patient  Abuse &  Patient  Abuse &  Patient 
Referral Source  Fraud  Fraud  Fraud 
Neglect  Funds  Neglect  Funds  Neglect  Funds 
Medicaid agency   
PI/SURS26  115  0  1  100  0  0  80  0  0 
Medicaid agency  
0  0  0  0  0  0  0  0  0 
other 
Managed care 
0  0  0  0  0  0  0  0  0 
organizations 
State survey and 
0  0  0  0  0  0  0  0  0 
certification agency 
Other State 
1  13  0  8  1  0  7  0  0 
agencies 
Licensing board  0  0  0  0  0  0  0  0  0 
Law enforcement  0  6  0  1  2  0  5  1  0 
Office of Inspector 
2  2  0  0  1  0  5  3  0 
General 
Prosecutors  0  2  0  0  0  0  1  1  0 
Providers  0  2  0  8  0  0  11  0  0 
Provider 
0  0  0  0  0  0  0  0  0 
associations 
Private health 
0  0  0  0  0  0  0  0  0 
insurer 
Long-term-care 
0  1  0  0  0  0  0  0  0 
ombudsman 
Adult protective 
0  24  0  1  15  0  5  19  1 
services 
Private citizens  20  9  0  37  11  0  67  4  1 
MFCU hotline  0  0  0  0  0  0  0  0  0 
Self-generated  0  3  0  0  1  0  0  0  0 
Other  16  0  0  28  2  0  29  5  0 
   Total  154  62  1  183  33  0  210  33  2 
   Annual Total  217  216  245 
 
   
                        ____________________________________________________________ 
26 The abbreviation PI stands for program integrity; the abbreviation SURS stands for 
Surveillance and Utilization Review Subsystem. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  19 
   
   
APPENDIX C 
Investigations Opened and Closed By Provider Category for 
FYs 2012 Through 2014 
Table C-1:  Fraud Investigations  
Provider Category  FY 2012  FY 2013  FY 2014 
Facilities  Opened  Closed  Opened  Closed  Opened  Closed 
     Hospitals  2  0  1  1  2  2 
     Nursing facilities  1  0  2  0  1  1 
     Other long-term-care  
0  0  0  1  0  0 
     facilities 
     Substance abuse treatment            
0  0  0  0  0  0 
     centers  
     Other   1  0  3  2  4  4 
   Subtotal  4  0  6  4  7  7 
Practitioners  Opened  Closed  Opened  Closed  Opened  Closed 
     Doctors of medicine or  
0  0  5  0  4  4 
     osteopathy 
     Dentists  4  2  2  1  1  0 
     Podiatrists  0  0  0  0  1  1 
     Optometrists/opticians  0  0  0  0  0  0 
     Counselors/psychologists  3  2  1  7  4  1 
     Chiropractors  0  0  0  0  0  0 
     Other   0  3  2  2  3  1 
   Subtotal  7  7  10  10  13  7 
Medical Support  Opened  Closed  Opened  Closed  Opened  Closed 
     Pharmacies  8  0  16  3  12  11 
     Pharmaceutical  
44  40  63  70  38  65 
     manufacturers 
     Suppliers of durable medical 
12  7  21  13  24  25 
     equipment and/or supplies 
     Laboratories  1  3  10  7  12  3 
     Transportation services  0  4  1  0  0  1 
     Home health care agencies  2  3  4  6  5  1 
     Home health care aides  10  8  38  16  42  25 
     Nurses, physician assistants,  
     nurse practitioners, certified   0  0  0  0  0  0 
     nurse aides 
     Radiologists  0  0  1  1  1  0 
     Medical supportother   2  0  2  2  7  2 
   Subtotal  79  65  156  118  141  133 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  20 
   
   
Table C-1 (Continued):  Fraud Investigations 
Program Related  Opened  Closed  Opened  Closed  Opened  Closed 
     Managed care   1  1  0  0  2  0 
     Medicaid program  
0  0  0  1  0  0 
     administration 
     Billing company  0  0  0  1  0  0 
     Other  3  1  6  0  0  4 
   Subtotal  4  2  6  2  2  4 
   Total Provider Categories  94  74  178  134  163  151 
Source:  OIG analysis of Unit-submitted documentation, 2016. 
Table C-2:  Patient Abuse and Neglect Investigations 
Provider Category  FY 2012  FY 2013  FY 2014 
  Opened  Closed  Opened  Closed  Opened  Closed 
     Nursing facilities  5  7  3  3  1  2 
     Other long-term-care facilities  2  0  0  2  1  1 
Nurses, physicians 
assistants, nurse    
1  0  1  1  4  0 
practitioners, certified nurse           
aides 
     Home health aides  3  2  0  2  2  1 
     Other  0  0  0  0  3  1 
   Total  11  9  4  8  11  5 
Source: OIG analysis of Unit-submitted documentation, 2016. 
 
Table C-3:  Patient Funds Investigations 
Provider Category  FY 2012  FY 2013  FY 2014 
  Opened  Closed  Opened  Closed  Opened  Closed 
     Nondirect care  0  2  1  2  0  0 
Nurses, physicians 
assistants, nurse    
0  0  0  0  0  0 
practitioners, certified nurse           
aides 
     Home health aides  0  0  0  0  0  0 
     Other  0  0  0  0  0  0 
   Total  0  2  1  2  0  0 
Source: OIG analysis of Unit-submitted documentation, 2016. 
 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  21 
   
   
APPENDIX D 
Detailed Methodology 
Data collected from the seven sources below was used to describe the 
caseload and assess the performance of the Virginia MFCU. 
Data Collection  
Review of Unit Documentation.  Prior to the onsite visit, we analyzed 
information 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 this information from several sources, including the Units 
quarterly statistical reports, its annual reports, its recertification 
questionnaire, its policy and procedures manuals, 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.  To evaluate internal control of 
fiscal resources, we reviewed policies and procedures related to the Units 
budgeting, accounting systems, cash management, procurement, property, 
and staffing.  We reviewed records in the Payment Management 
System (PMS) 27 and revenue accounts to determine the accuracy of the 
Federal Financial Reports (FFRs) for FYs 2012 through 2014.  We also 
obtained the Units claimed grant expenditures from its FFRs and the 
supporting schedules.  From the supporting schedules, we requested and 
reviewed supporting documentation for the selected items.  We noted any 
instances of noncompliance with applicable regulations.   
We selected three purposive samples to assess the Units internal control 
of fiscal resources.  The three samples included the following:   
1.  To assess the Units expenditures, we selected a purposive sample 
of 89 accounting records.  We selected routine and nonroutine 
transactions representing a variety of budget categories and 
payment amounts.   
2.  To assess inventory, we selected and verified a purposive sample of 
45 items from the current inventory list of 1,035 items.  To ensure 
                        ____________________________________________________________ 
27 The PMS is a grant payment system operated and maintained by the Department of 
Health and Human Services, Program Support Center, Division of Payment 
Management.  The PMS provides disbursement, grant monitoring, reporting, and case 
management services to awarding agencies and grant recipients, such as MFCUs. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  22 
   
   
a variety in our inventory sample, we included items that were 
portable, high value, or unusual in nature (e.g., vehicles, 
communication equipment).   
3.  To assess employee time and effort, we selected two purposive 
samples of  Unit employees who were paid during the review 
period:  for FY 2013, we sampled 29 of 103 employees, and for 
FY 2014, we sampled 35 of 114 employees.  We then requested 
and reviewed documentation (e.g., time card records) to support 
the time and effort of that employee in the selected pay period. 
Interviews with Key Stakeholders.  In July and August 2015, 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 (i.e., the Medicaid Program Integrity Unit, the Office of the 
State Long-Term Care Ombudsman, and the Office of Licensure and 
Certification).  We also interviewed supervisors from OIGs Region IV 
offices 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 we identified opportunities for improvement.  We used the 
information collected from these interviews to develop subsequent interview 
questions for Unit management. 
Survey of Unit Staff.  In August 2015, we conducted an online survey of all 
77 nonmanagerial Unit staff within each professional discipline 
(i.e., investigators, auditors, attorneys, analysts, and nurse investigators) as 
well as support staff.  The response rate was 99 percent.28  Our questions 
focused on Unit operations, opportunities for improvement, and practices 
that contributed to the effectiveness and efficiency of Unit operations 
and/or performance.  The survey also sought information about the Units 
compliance with applicable laws and regulations.   
Onsite Interviews with Unit Management.  We conducted structured 
interviews with the Units management during the onsite review in 
September 2015.  We interviewed the Units Director, Deputy Director, 
Chief of Fraud and Corporate Neglect Investigations, Chief of 
Investigations and Elder Abuse, Chief Section Counsel, Chief of Civil 
Litigation, Chief Prosecutor, and Administrative Manager.  We asked these 
individuals to provide information related to (1) Unit operations, (2) Unit 
practices that contributed to the effectiveness and efficiency of Unit 
operations and/or performance, (3) opportunities for the Unit to improve 
                        ____________________________________________________________ 
28 One nonmanagerial staff person was on maternity leave during the period of the staff 
survey and therefore did not respond. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  23 
   
   
its operations and/or performance, and (4) clarification regarding 
information obtained from other data sources. 
Onsite Review of Case Files and Other Documentation.  We requested that 
the Unit provide us with a list of cases that were open at any point during 
FYs 2012 through 2014.  We requested data on the 777 open cases that 
included, but was not limited to, the current status of the case; whether the 
case was criminal, civil, or global; and the date on which the case was 
opened.  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 all of the cases categorized as global 
from our review of a Units case files.  Therefore, we excluded 82 cases 
that were categorized as global from the list of cases.  The remaining 
number of case files was 695.   
From the 695 cases, we selected a simple random sample of 100 cases for 
review.  From this initial sample of 100 case files, we selected a simple 
random sample of 50 files for a more indepth review of selected issues, 
such as the timeliness of investigations and case development. 
Through our case review, we determined that 58 of the 100 sampled cases 
were monitored cases.  Appendix E contains the point estimates and their 
95-percent confidence intervals.  
Onsite Review of Unit Operations.  During our September 2015 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 
instances in which the Unit did not fully meet the performance standards 
or was not operating in accordance with laws, regulations, or policy 
transmittals.29 
   
                        ____________________________________________________________ 
29 All relevant regulations, statutes, and policy transmittals are available online at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu. 
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  24 
   
   
APPENDIX E 
Point Estimates and 95-Percent Confidence Intervals Based on 
Reviews of Case Files 
95-Percent Confidence 
Sample  Point  Interval  
Estimate 
Size   Estimate 
Lower  Upper 
Percentage of monitored cases that had 
documented supervisory reviews in their  58  6.9%  2.0%  16.1% 
respective case files 
 
Source:  OIG analysis of Virginia MFCU case files, 2016. 
 
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  25 
   
   
APPENDIX F 
Unit Comments 
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  26 
   
   
   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  27 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Brian 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.  
Michala Walker, of the Kansas City regional office, served as the project 
leader for this study.  Other Office of Evaluation and Inspections staff who 
conducted the study include Michael Barrett and Conswelia McCourt.  
Other Medicaid Fraud Policy and Oversight Division staff who 
participated in the review include Jordan Clementi.  Office of 
Investigations staff also participated in the review.  Office of Audit 
Services staff who conducted a financial review include Marilyn Carrion, 
Valerie Johnson, and Michael Jones.  Other central office staff who 
contributed to this review include Kevin Farber, Lonie Kim, Joanne 
Legomsky, and Jacquelyn Towns.   
Virginia State Medicaid Fraud Control Unit:  2015 Onsite Review (OEI-07-15-00290)  28 
   
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.