Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
N H S  
EW  AMPSHIRE  TATE 
 
M   F C U :
EDICAID  RAUD  ONTROL  NIT  
 
  2012 ONSITE REVIEW 
 
 
 
Stuart Wright  
Deputy Inspector General for 
Evaluation and Inspections 
 
October 2012 
OEI-02-12-00180   
   
EXECUTIVE SUMMARY:  NEW HAMPSHIRE STATE MEDICAID FRAUD CONTROL 
UNIT, 2012 ONSITE REVIEW, OEI-02-12-00180 
 
WHY WE DID THIS STUDY  
 
The Office of Inspector General (OIG) is responsible for overseeing the activities of all Medicaid 
Fraud Control Units (MFCU or Unit).  As part of this oversight, OIG conducts periodic reviews 
of all Units and prepares public reports based on these reviews.  The reviews describe the Units 
caseloads; assess performance in accordance with the 12 MFCU performance standards; identify 
any opportunities for improvement; and identify any instances of noncompliance with laws, 
regulations, or policy transmittals.   
 
HOW WE DID THIS STUDY 
 
We based our review on an analysis of data from six sources:  (1) a review of policies and 
procedures and documentation on the Units operations, staffing, and caseload; (2) structured 
interviews with key stakeholders; (3) structured interviews with Unit staff; (4) a review of 
financial documentation; (5) an onsite review of case files; and (6) an onsite review of Unit 
operations.   
 
WHAT WE FOUND 
 
From fiscal years (FY) 2009 to 2011, the New Hampshire Unit reported recoveries of 
$14 million, filed criminal charges against 25 defendants, and obtained 15 convictions.  Although 
the number of fraud cases opened and closed by the Unit increased during this time, the overall 
number of cases opened and closed by the Unit decreased.  This was due to a decrease in patient 
abuse and neglect cases.  The Unit attributed the overall decrease primarily to staffing limitations; 
for all 3 years, the Units staff levels were below the number of staff that the Unit requested and 
OIG approved.  Additionally, although the Unit reported that its best source of fraud referrals 
was the States Surveillance and Utilization Review Subsystem (SURS), the Unit also noted that 
the number of referrals from SURS was low.  Our review also found that the Units case files 
lacked documentation of periodic supervisory review, and the Unit lacked annual training plans 
for each of the three professional disciplines (i.e., for auditors, investigators, or attorneys).  At 
the same time, our review found no evidence of significant noncompliance with applicable laws, 
regulations, or policy transmittals.  The Unit identified as a noteworthy practice its sending a 
letter to nursing facilities and assisted living facilities explaining that drug diversion is a form of 
patient abuse and neglect; this letter resulted in facilities making drug diversion-related referrals 
to the Unit.  (Drug diversion is when facility staff members or other individuals divert residents 
prescription drugs for their own use or for sale.)  
 
WHAT WE RECOMMEND 
 
We recommend that the New Hampshire Unit:  (1) seek to expand staff sizes to reflect the 
number of staff approved in the Units budget, (2) ensure that it maintains an adequate workload 
through referrals from SURS, (3) ensure that case files contain documented supervisory reviews, 
and (4) establish annual training plans for each professional discipline.  The New Hampshire 
Unit concurred with all four of our recommendations.
   
   
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................3 
Findings........................................................................................................6 
From fiscal years 2009 to 2011, the New Hampshire Unit 
 reported recoveries of $14 million, filed criminal charges  
against 25 defendants, and obtained 15 convictions ........................6 
From fiscal years 2009 to 2011, the overall number of cases 
 opened and closed by the Unit decreased. ........................................6 
From fiscal years 2009 to 2011, the Units staff levels were below 
the number of staff that the Unit requested and OIG approved ......... 8 
The Unit reported that its best source of fraud referrals was the 
Surveillance and Utilization Review Subsystem; however, the Unit 
also noted that the number of referrals from this source was low ..... 8 
The Units case files lacked documentation of periodic supervisory 
review ...............................................................................................9 
The Unit lacked annual training plans for each of the three 
professional disciplines .....................................................................9   
Other Observations:  Drug Diversion Letter ...................................10 
Conclusion and Recommendations ............................................................ 11 
Unit Comments ..............................................................................13 
Appendixes ................................................................................................14 
A:  Performance Standards for Medicaid Fraud Control Units .....14 
B:  Referrals Received by the Unit by Source, Fiscal 
Years 2009 to 2011 .........................................................................18 
C:  Fraud Investigations Opened and Closed by Provider  
Category, Fiscal Years 2009 to 2011 ..............................................19 
D:  Patient Abuse and Neglect Investigations Opened and  
Closed by Provider Category, Fiscal Years 2009 to 2011 ..............20 
E:  Confidence Intervals for Case File Review Data .....................21 
F:  Unit Comments .........................................................................22 
Acknowledgments......................................................................................23 
   
   
OBJECTIVE 
To conduct an onsite review of the New Hampshire State Medicaid Fraud 
Control Unit (MFCU or Unit). 
BACKGROUND  
The mission of State MFCUs, as established by Federal statute, is to 
investigate and prosecute Medicaid provider fraud and patient abuse and 
neglect under State law.1  Under the Medicaid statute, each State must 
maintain a certified Unit unless the Department of Health and Human 
Services (HHS) determines that operation of a Unit would not be 
cost-effective because minimal Medicaid fraud exists in that State and that 
the State has other adequate safeguards to protect Medicaid beneficiaries 
from abuse and neglect.2  Currently 49 States and the District of Columbia 
have created such Units.3  In fiscal year (FY) 2011, HHS and the States 
spent a combined total of $208.6 million on these Units.4  Of this amount, 
$552,310 was spent on the New Hampshire Unit.5 
Each Unit must employ sufficient staff consisting of at least an 
investigator, an auditor, and an attorney to carry out its duties and 
responsibilities in an effective and efficient manner.6  The staff review 
complaints provided by the State Medicaid agency and other sources and 
determine their potential for criminal or civil prosecution.  Collectively, in 
FY 2011 the 50 Units obtained 1,230 convictions as well as 906 civil 
settlements or judgments.7  That year, the Units reported recoveries of 
$1.7 billion.8 
Units are required to have either Statewide authority to prosecute cases or 
formal procedures to refer suspected criminal violations to an office with 
 
1 Social Security Act  1903(q). 
2 Social Security Act  1902(a)(61) and 1903(q)(3).  Regulations found 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.  For the 
purposes of this study, misappropriation of patient funds is combined with patient abuse 
and neglect. 
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.  For the 
purposes of this review, we refer to the District of Columbia as a State.  
4 The Federal fiscal year, which starts October 1 and ends September 30, is used 
throughout this report. 
5 Office of Inspector General (OIG) analysis of Office of Management and Budget Forms 
SF-425 for FY 2011. 
6 Social Security Act  1903(q)(6); 42 CFR  1007.13. 
7 OIG, State Medicaid Fraud Control Units Fiscal Year 2011 Grant Expenditures and 
Statistics.  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-
mfcu/expenditures_statistics/fy2011.asp on June 14, 2011. 
8 Ibid. 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    1 
   
   
such authority.9  In New Hampshire and 43 other States, the Units are part 
of Offices of State Attorneys General; in the remaining 6 States, the Units 
are part of other State agencies.  Generally, Units that are not part of 
Offices of State Attorneys General must refer cases to other offices that 
have prosecutorial authority.  Additionally, each Unit must be a single 
identifiable entity of State government, distinct from the single State 
Medicaid agency, and each Unit must develop a formal agreement, e.g., a 
memorandum of understanding (MOU), that describes the Units 
relationship with that agency.10  
Oversight of the MFCU Program 
The Secretary of HHS delegated to OIG the authority both to annually 
certify the Units and to administer grant awards to reimburse States for a 
percentage of their costs in operating a certified Unit.11  All States 
currently operating Units are reimbursed by the Federal Government on a 
75-percent matching basis, with the States required to contribute the 
remaining 25 percent.12  In order to receive Federal reimbursement, each 
Unit must submit an initial application to OIG.13  OIG reviews the 
application and notifies the Unit if the application is approved and the Unit 
is certified.  Approval and certification is for a 1-year period; the Unit 
must be recertified each year thereafter.14   
Under the Medicaid statute, States must operate Units that effectively 
carry out their statutory functions and meet program requirements.15  To 
clarify the criteria that OIG applies in assessing whether a Unit is 
effectively carrying out these functions and meeting program 
requirements, OIG developed and issued 12 performance standards.16  
Examples include maintaining an adequate caseload through referrals from 
several sources, maintaining an annual training plan for all three of the 
professional disciplines (i.e., for auditors, investigators, and attorneys), 
and establishing policy and procedure manuals to reflect the Units 
operations.  See Appendix A for a complete list of these performance 
standards.   
 
9 Social Security Act  1903(q)(1). 
10 Social Security Act  1903(q)(2); 42 CFR  1007.9(d).  
11 The portion of funds reimbursed to States by the Federal Government for its share of 
expenditures for the Federal Medicaid program, including the MFCUs, is called the 
Federal Financial Participation (FFP). 
12 Social Security Act  1903(a)(6)(B).  
13 42 CFR  1007.15(a). 
14 42 CFR  1007.15(b) and (c). 
15 Social Security Act  1902(a)(61). 
16 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 17, 2012.  OIG 
revised these standards on June 1, 2012 (see 77 Fed. Reg. 77106).  The standards referred 
to throughout this report are those from 1994, which were in effect at the time of our 
review.  
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New Hampshire State MFCU  
The New Hampshire Unit is located within the Office of the 
New Hampshire Attorney General and has the authority to prosecute 
Medicaid fraud and patient abuse and neglect cases.  At the time of our 
review, the Unitone of the smallest Units in the countryhad 
five employees, all of whom were located in Concord, the States capital.  
The Unit receives referrals of provider fraud and patient abuse and neglect 
from a variety of sources, including the States Surveillance and 
Utilization Review Subsystem (SURS).17  Other sources of referrals 
include private citizens, providers, the State Long Term Care 
Ombudsman, and other State agencies.  From FYs 2009 to 2011, the Unit 
received an average of 151 referrals each year.  See Appendix B for a 
breakdown of the referrals received by the Unit during this period.   
When the Unit receives a referral, it determines whether to open it as a 
criminal case or as a civil case.  In addition, the Unit may generate its own 
cases.  Once a case is opened, the Unit may close it through civil action or 
criminal prosecution.  The Unit may also close a case if there is 
insufficient evidence or by referring it to another agency. 
Previous Review 
In 2008, OIG conducted an onsite review of the New Hampshire Unit.  In 
that review, OIG found no significant performance issues, but disallowed 
payments for non-Medicaid activities performed by Unit staff without 
formal approval from OIG.   
METHODOLOGY 
We based our review on an analysis of data from six sources:  (1) a review 
of policies and procedures and documentation on the Units operations, 
staffing, and caseload; (2) structured interviews with key stakeholders; 
(3) structured interviews with the Units staff; (4) a review of financial 
documentation; (5) an onsite review of case files; and (6) an onsite review 
of Unit operations.  
We analyzed data from all six sources to describe the caseload and assess 
the performance of the Unit.  We also analyzed the data to identify any 
opportunities for improvement and any instances in which the Unit did not 
fully meet the performance standards or was not operating in accordance 
 
17 In all States with a MFCU, the Unit shares responsibility for protecting the integrity of 
the Medicaid program with the section of the State Medicaid agency that functions as the 
Program Integrity Unit.  In New Hampshire, program integrity functions are performed 
by SURS.   
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    3 
   
   
with laws, regulations, and policy transmittals.18  Lastly, we identified any 
noteworthy practices observed during the review. 
Data Collection and Analysis 
Review of Unit documentation.  We asked the Unit to provide us with its 
policies and procedures, as well as documentation on its operations, 
staffing, and caseload, including its annual reports, quarterly statistical 
reports, and responses to recertification questionnaires.  We also asked the 
Unit to provide us with data describing how it detects, investigates, and 
prosecutes Medicaid cases.  Data collected included information such as 
the number of referrals received by the Unit and the number of 
investigations opened and closed.  We requested and reviewed these data 
for the 3-year period of FYs 2009 to 2011.  
Interviews with key stakeholders.  We conducted structured interviews 
with key stakeholders who were familiar with the operations of the Unit.  
Specifically, we interviewed officials in SURS, the Bureau of Elderly and 
Adult Services, and the Special Investigations Unit, all of which are part 
of the State Department of Health and Human Services, which also houses 
the State Medicaid Agency.  Additionally, we interviewed the Associate 
State Attorney General and the Special Agent in Charge for OIGs 
Region I, which includes the State of New Hampshire.   
Interviews with Unit staff.  We conducted onsite interviews with all 5 Unit 
staff, including the Unit director.  We asked these staff to provide us with 
additional information needed to better understand the Units operations, 
as well as to identify opportunities for improvement or practices that 
contribute to the efficiency and effectiveness of Unit operations and/or 
performance.  We used information obtained from the key stakeholders 
above to develop questions for the onsite interviews with Unit staff. 
Review of financial documentation.  We reviewed certain financial 
documents from the Unit, as well as the Units equipment inventory and 
purchase records, to determine compliance with applicable laws and 
regulations, as well as to determine whether additional internal controls 
were needed.   
Onsite review of case files.  We selected a simple random sample of 
70 case files from the Units 155 cases that were open at some point 
during FYs 2009 to 2011.  We reviewed all 70 of these case files to check 
for documentation of supervisory approval for the opening and closing of 
cases, to check for documented periodic supervisory reviews, and to assess 
the Units processes for monitoring the status and outcomes of cases.  
 
18 All relevant regulations, statutes, and policy transmittals are available online at 
http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp. 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    4 
   
   
Onsite review of Unit operations.  While onsite, we reviewed the Units 
operations, including its process for receiving referrals, its electronic case 
management system, its method for case file storage and security, and its 
general operations. 
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.   
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FINDINGS 
From FYs 2009 to 2011, the New Hampshire Unit 
reported recoveries of $14 million, filed criminal 
charges against 25 defendants, and obtained 
15 convictions 
From FYs 2009 to 2011, the New Hampshire Unit obtained monetary 
settlements and court orders requiring the payment of $14.2 million in 
civil recoveries and $100,000 in criminal restitution and fines.  (See 
Table 1.)  During this 3-year period, the Unit filed criminal charges against 
25 defendants, of which 22 were charged with patient abuse and neglect 
and 3 were charged with provider fraud.  The Unit also obtained 
15 convictions.19  Of these convictions, 13 involved patient abuse and 
neglect.   
Table 1:  Criminal and Civil Case Outcomes from FYs 2009 to 2011 
Type  FY 2009  FY 2010  FY 2011  TOTAL 
Amounts Ordered to Pay 
Resulting From Criminal  $47,809.68  $31,148.17  $21,104.00  $100,061.85 
Cases 
Amounts Ordered to Pay 
$4,448,009.55  $6,092,628.75  $3,687,368.95  $14,228,007.25 
Resulting From Civil Cases 
Total Amounts Ordered to 
$4,495,819.23  $6,123,776.92  $3,708,472.95  $14,328,069.10 
Pay 
 
     Source:  OIG analysis of New Hampshire MFCU data, 2012. 
 
From FYs 2009 to 2011, the overall number of cases 
opened and closed by the Unit decreased 
According to performance standard 6, the Unit should maintain a 
continuous case flow.  As noted earlier, when the Unit receives a referral, 
it determines whether to open it as a criminal case or as a civil case.  
Although the number of fraud cases opened by the Unit increased from 
FYs 2009 to 2011, the overall number of cases opened by the Unit 
decreased during this time, from 47 to 31.  This overall decrease was due 
to a decrease in the number of patient abuse and neglect cases opened by 
the Unit, from 28 in FY 2009 to 5 in FY 2011.  (See Table 2.)  Within this 
category of cases, the largest decline occurred among patient funds cases, 
 
19 These 15 convictions are not necessarily derived from the 25 criminal charges filed 
during the same period.  Some of these convictions may have derived from criminal 
charges that occurred prior to the 3-year period.  Similarly, not all of the criminal charges 
from this 3-year period may have resulted in convictions during this period.  
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    6 
   
   
which involve the misappropriation of patients private funds in residential 
health care facilities and are considered a form of patient abuse and 
neglect.  In FY 2009, the Unit opened 21 patient funds cases, whereas in 
FY 2011 it opened only 4 such cases. 
Table 2:  Cases Opened from FYs 2009 to 2011, by Type*   
Type of Investigation  FY 2009  FY 2010  FY 2011 
Fraud  19  19  26 
Patient Abuse and Neglect  28  21  5 
Total  47  40  31 
 
     *Includes only new cases opened during the FY. 
     Source:  OIG analysis of New Hampshire MFCU data, 2012. 
 
Like the overall number of cases opened by the Unit, the overall number 
of cases closed by the Unit decreased from FYs 2009 to 2011, from 40 to 
35, respectively, despite an increase in the number of fraud cases closed.  
As with the decline in cases opened, the overall decline in cases closed 
resulted from a decrease in the number of patient abuse and neglect cases 
closed.  In FY 2009, the Unit closed 24 patient abuse and neglect cases, 
compared to 9 such cases in FY 2011.  (See Table 3.)  The largest decline 
in cases closed during this 3-year period occurred among cases involving 
patient funds.  In FY 2009, the Unit closed 20 patient funds cases, as 
opposed to 7 such cases in FY 2011.  See Appendixes C and D for 
information about the Units cases by provider category.    
Table 3: Cases Closed from FYs 2009 to 2011, by Type   
Type of Investigation  FY 2009  FY 2010  FY 2011 
Fraud  16  27  26 
Patient Abuse and Neglect  24  30  9 
Total  40  57  35 
      .   
Source:  OIG analysis of New Hampshire MFCU data, 2012
 
The Unit director explained that in mid-2010, the Unit became more 
selective in opening certain patient funds cases because of staffing 
limitations.  Historically, in instances of suspected misuse of patient funds, 
the Unit had investigated persons not employed at nursing facilities or 
assisted living facilitiessuch as family members serving as fiduciaries
when facilities referred such cases.  These cases were often resolved 
civilly.  The Unit director explained that State law gives facilities the same 
civil enforcement powers as the Unit to investigate fiduciary conduct, 
adding, [W]e wanted to preserve our resources for investigating criminal 
allegations of abuse, neglect and financial exploitation.   He also noted 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    7 
   
   
that before 2010, patient funds cases represented a disproportionately large 
share of the Units caseload mix; to provide more balance, the director 
decided to shift the Units focus to fraud referrals.  
From FYs 2009 to 2011, the Units staff levels were 
below the number of staff that the Unit requested and 
OIG approved 
According to performance standard 2, the Unit should maintain staff levels 
in accordance with staffing allocations approved in its budget.  As a part 
of its oversight role, OIG approves the number of staff requested by the 
State in its annual budget.  At the time of our review, the Unitone of the 
smallest in the countryhad only five employees:  two attorneys (one of 
whom was the director), one auditor, one investigator, and one legal 
assistant.  For each year during the review period, the Units staff level 
was below the number of staff that the Unit requested and OIG approved.  
From FYs 2009 to 2011, OIG approved eight staff members, but the Unit 
employed only six in FY 2009 and five in FYs 2010 and 2011.  According 
to one staff member, Weve lost some senior staff over the last few years. 
Were really down on staff now and its very difficult.  Another staff 
member agreed, Our biggest limitation is our staff size. 
The Unit reported that its best source of fraud referrals 
was SURS; however, the Unit noted that the number of 
referrals from this source was low 
According to performance standard 4, the Unit should take steps to ensure 
that it maintains an adequate workload through referrals from the single 
State agency and other sources.  As noted earlier, the Unit receives fraud 
referrals from a variety of sources, including the State Medicaid Agency, 
which houses the SURS unit.  Identifying potential fraud through analysis 
of Medicaid data is a statutory responsibility of SURS, and the Unit is 
highly dependent on SURS for referrals generated by this data analysis.20   
Although the Unit director reported that the Units best source of 
high-quality fraud referrals was SURS, he acknowledged that the number 
of fraud referrals from SURS was lower than he would have liked.  The 
Unit received seven fraud referrals from SURS in FY 2009, two in 
FY 2010, and four in FY 2011.  Data provided by SURS showed that of 
these 13 referrals, only 2 came from analysis of claims data.  One Unit 
staff member noted that the State legislatures aggressive move to 
managed careand the need to adapt the States computer system to meet 
 
20 According to 42 CFR  1007.19(e)(2), Units do not have the authority to claim FFP for 
analysis of patterns of practice to identify situations in which a question of fraud may 
exist; they are therefore limited to relying on referrals from SURS analysis of data.  
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different needshas affected SURS ability to generate referrals through 
analysis of Medicaid data, adding:  [W]e would like for them to have a 
good system so we can have better referrals. 
The Units cases files lacked documentation of 
periodic supervisory review 
According to performance standard 6, the Unit should complete cases 
within a reasonable timeframe, and as a part of this effort, supervisors 
should approve the opening and closing of cases and document any 
supervisory case reviews in the case file.  All but one of the case files we 
reviewed included an opening memorandum signed by the Unit director, 
and all of the closed case files we reviewed included a closing 
memorandum signed by the Unit director.  However, most files
94 percentlacked documentation of periodic supervisory review 
between the cases opening and closing.21  Although staff reported that 
supervisory case reviews occur on a regular basis, they acknowledged that 
these reviews were not always documented in the case files.  See 
Appendix E for confidence intervals. 
The Unit lacked annual training plans for each of the 
three professional disciplines 
According to performance standard 12, the Unit should establish an annual 
training plan for each of the three professional disciplines.  While all of 
the Units professional staff members reported being allowed to attend one 
out-of-state training event per year, the Unit had not established an annual 
training plan for each professional discipline.  Although staff members 
reported attending training when possible and maintaining their licensure 
through continuing professional education, they highlighted several 
obstacles to attending training, including the lack of relevant local training 
opportunities, the need for State approval of costs, and the cost of time 
spent away from work to attend trainings.  For example, one staff member 
noted, In such a small unit, it becomes such a burden to attend some 
trainings and to be out of the office for that long, so the training you attend 
has to be really worth it.  
 
 
 
21 Of the 70 case files we reviewed, 18 were for multi-State cases thatbecause they 
involved the National Association of Medicaid Fraud Control Unitswere worked on 
primarily by the Unit director.  Because the Unit director was the only supervisor in the 
Unit, we excluded these 18 case files from our analysis of documented periodic 
supervisory review.  Of the remaining 52 case files, only 3 included documentation of 
periodic supervisory review. 
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Other Observations:  Drug Diversion Letter 
The Unit identified as a noteworthy practice its sending a letter to nursing 
facilities and assisted living facilities explaining that drug diversion22 is a 
form of patient abuse and neglect; this letter resulted in facilities making 
drug diversion-related referrals to the Unit.  According to the Unit 
director, Back in 2005 and 2006, [the Vermont Unit] was getting a lot of 
drug diversion cases and we were not, so we sent a letter to all facilities [in 
our State].  We then saw an uptick in the number of drug diversion cases 
referred to us.  The director explained that over time, however, the 
number of incoming drug diversion referrals began to wane as facility 
administrators changed.  In response to this, the Unit reported during our 
onsite review that it was in the process of sending another drug diversion 
letter to nursing facilities and assisted living facilities throughout the State 
to ensure that such cases are reported.  A supervisor at the Bureau of 
Elderly and Adult Services, a State agency that works with the Unit, also 
noted the effectiveness of the letter:  I think this letter is a very good idea 
and that it will result in more cases of abuse and neglect coming forward.   
   
 
22 Drug diversion is when facility staff members or other individuals divert residents 
prescription drugs for their own use or for sale.   
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CONCLUSION AND RECOMMENDATIONS 
From FYs 2009 to 2011, the New Hampshire Unit reported recoveries of 
$14 million, filed criminal charges against 25 defendants, and obtained 
15 convictions.  Although the number of fraud cases opened and closed by 
the Unit increased during this time, the overall number of cases opened and 
closed by the Unit decreased.  This overall decrease was due to a decrease 
in patient abuse and neglect cases.  The Unit attributed the overall decrease 
primarily to staffing limitations; for all 3 years, the Units staff levels were 
below the number that the Unit requested and OIG approved.  Additionally, 
although the Unit reported that SURS was its best source of fraud referrals, 
the Unit also noted that the number of referrals from SURS was low.   
Our review also found that the Units case files lacked documentation of 
periodic supervisory review, and that the Unit lacked annual training plans 
for each of the three professional disciplines.  At the same time, our review 
found no evidence of significant noncompliance with applicable laws, 
regulations, or policy transmittals.  The Unit identified as a noteworthy 
practice its sending a letter to nursing facilities and assisted living 
facilities explaining that drug diversion is a form of patient abuse and 
neglect; this letter resulted in facilities making drug diversion-related 
referrals to the Unit.  
We recommend that the New Hampshire Unit: 
Seek to expand staff sizes to reflect the number of staff 
approved in the Units budget 
The Unit should seek to maintain staff levels in accordance with staffing 
allocations requested by the Unit and approved by OIG. 
Work with SURS to ensure that the Unit maintains an adequate 
number of referrals 
The Unit should work with SURS and, if necessary, request that specific 
data analysis be undertaken to ensure that the Unit receives an adequate 
number of fraud referrals from SURS.  
Ensure that case files contain documented supervisory 
reviews  
The Unit should develop a means of documenting its regular supervisory 
case file reviews and ensure that this documentation is included in the case 
file.   
 
 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    11 
   
   
Establish annual training plans for each professional 
discipline 
The Unit should develop formal training plans that indicate the type and 
duration of training expected each year for employees in each professional 
discipline.   
   
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    12 
   
   
UNIT COMMENTS 
The New Hampshire Unit concurred with all four of our recommendations 
and noted that each of its responses to the recommendations has been 
implemented or is in the process of being implemented.   
The Unit concurred with our recommendation to expand its staff to reflect 
the number approved in the Units budget.  The Unit reported that it is 
currently exploring the possibility of expanding the Units investigative 
staff by adding a second investigator in the next budget cycle.   
The Unit also concurred with our recommendation to work with SURS to 
ensure that the Unit maintains an adequate number of referrals.  The Unit 
reported that it is committed to building on the successful collaboration 
with SURS by instituting monthly meeting and providing cross-training 
opportunities for staff.  The Unit is also undertaking a review of the 
referral form and process. 
The Unit concurred with our recommendation to ensure that case files 
contain documented supervisory reviews.  The Unit noted that on the basis 
of the guidance provided during the onsite review visit, it created and 
implemented a procedure for documenting supervisory case reviews.  
The Unit concurred with our recommendation to establish annual training 
plans for each professional discipline.  The Unit agreed that its policy and 
procedures manual does not include a formal training plan for each 
discipline but noted that every effort is made to offer all professional staff 
at least one training course per year.  The Unit added that the director has 
conferred with other MFCU directors to identify best practices in this area 
and is in the process of developing a formal training policy and plan for 
each discipline for inclusion in the Units policy and procedures manual. 
The full text of the Units comments is provided in Appendix F. We did not 
make any changes to the report as a result of the Units comments. 
   
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APPENDIX A 
Performance Standards for Medicaid Fraud Control Units  
[59 Fed. Reg. 49080, Sept. 26, 1994] 
1.  A Unit will be in conformance with all applicable statutes, regulations, and policy 
transmittals.  In meeting this standard, the Unit must meet, but is not limited to, the 
following requirements: 
a.  The Unit professional staff must consist of permanent employees working 
full-time on Medicaid fraud and patient abuse matters. 
b.  The Unit must be separate and distinct from the single State Medicaid agency. 
c.  The Unit must have prosecutorial authority or an approved formal procedure for 
referring cases to a prosecutor. 
d.  The Unit must submit annual reports, with appropriate certifications, on a timely 
basis. 
e.  The Unit must submit quarterly reports on a timely basis. 
f.  The Unit must comply with the Americans with Disabilities Act, the Equal 
Employment opportunity requirements, the Drug Free workplace requirements, 
Federal lobbying restrictions, and other such rules that are made conditions of the 
grant. 
2.  A Unit should maintain staff levels in accordance with staffing allocations 
approved in its budget.  In meeting this standard, the following performance 
indicators will be considered: 
a.  Does the Unit employ the number of staff that was included in the Units budget 
as approved by [the Office of Inspector General (OIG)]? 
b.  Does the Unit employ the number of attorneys, auditors, and investigators that 
were approved in the Units budget? 
c.  Does the Unit employ a reasonable size of professional staff in relation to the 
States total Medicaid program expenditures?  
d.  Are the Unit office locations established on a rational basis and are such locations 
appropriately staffed? 
3.  A Unit should establish policies and procedures for its operations, and maintain 
appropriate systems for case management and case tracking.  In meeting this 
standard, the following performance indicators will be considered: 
a.  Does the Unit have policy and procedure manuals? 
b.  Is an adequate, computerized case management and tracking system in place? 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    14 
   
   
4. A Unit should take steps to ensure that it maintains an adequate workload 
through referrals from the single State agency and other sources.  In meeting this 
standard, the following performance indicators will be considered: 
a.  Does the Unit work with the single State Medicaid agency to ensure adequate 
fraud referrals? 
b.  Does the Unit work with other agencies to encourage fraud referrals? 
c.  Does the Unit generate any of its own fraud cases? 
d.  Does the Unit ensure that adequate referrals of patient abuse complaints are 
received from all sources? 
5.  A Units case mix, when possible, should cover all significant provider types.  In 
meeting this standard, the following performance indicators will be considered: 
a.  Does the Unit seek to have a mix of cases among all types of providers in the 
State? 
b.  Does the Unit seek to have a mix of Medicaid fraud and Medicaid patient abuse 
cases? 
c.  Does the Unit seek to have a mix of cases that reflect the proportion of Medicaid 
expenditures for particular provider groups? 
d.  Are there any special Unit initiatives targeting specific provider types that affect 
case mix? 
e.  Does the Unit consider civil and administrative remedies when appropriate? 
6.  A Unit should have a continuous case flow, and cases should be completed in a 
reasonable time.  In meeting this standard, the following performance indicators will 
be considered: 
a.  Is each stage of an investigation and prosecution completed in an appropriate time 
frame? 
b.  Are supervisors approving the opening and closing of investigations?  
c.  Are supervisory reviews conducted periodically and noted in the case file? 
7.  A Unit should have a process for monitoring the outcome of cases.  In meeting this 
standard, the following performance indicators will be considered: 
a.  The number, age, and type of cases in inventory. 
b.  The number of referrals to other agencies for prosecution. 
c.  The number of arrests and indictments. 
d.  The number of convictions. 
e.  The amount of overpayments identified. 
f.  The amount of fines and restitution ordered. 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    15 
   
   
g.  The amount of civil recoveries. 
h.  The numbers of administrative sanctions imposed. 
8.  A Unit will cooperate with OIG and other Federal agencies, whenever 
appropriate and consistent with its mission, in the investigation and prosecution 
of health care fraud.  In meeting this standard, the following performance indicators 
will be considered: 
a.  Does the Unit communicate effectively with OIG and other Federal agencies in 
investigating or prosecuting health care fraud in their State? 
b.  Does the Unit provide OIG regional management, and other Federal agencies, 
where appropriate, with timely information concerning significant actions in all 
cases being pursued by the Unit? 
c.  Does the Unit have an effective procedure for referring cases, when appropriate, 
to Federal agencies for investigation and other action? 
d.  Does the Unit transmit to OIG, for purposes of program exclusions under 
section 1128 of the Social Security Act, reports of convictions, and copies of 
Judgment and Sentence or other acceptable documentation within 30 days or 
other reasonable time period? 
9.  A Unit should make statutory or programmatic recommendations, when 
necessary, to the State government.  In meeting this standard, the following 
performance indicators will be considered: 
a.  Does the Unit recommend amendments to the enforcement provisions of the 
States statutes when necessary and appropriate to do so? 
b.  Does the Unit provide program recommendations to single State agency when 
appropriate? 
c.  Does the Unit monitor actions taken by State legislature or State Medicaid agency 
in response to recommendations? 
10.  A Unit should periodically review its memorandum of understanding (MOU) 
with the single State Medicaid agency and seek amendments, as necessary, to 
ensure it reflects current law and practice.  In meeting this standard, the following 
performance indicators will be considered: 
a.  Is the MOU more than 5 years old? 
b.  Does the MOU meet Federal legal requirements? 
c.  Does the MOU address cross-training with the fraud detection staff of the State 
Medicaid agency? 
d.  Does the MOU address the Units responsibility to make program 
recommendations to the Medicaid agency and monitor actions taken by the 
Medicaid agency concerning those recommendations? 
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11. The Unit director should exercise proper fiscal control over the Unit resources.  
In meeting this standard, the following performance indicators will be considered: 
a.  Does the Unit director receive on a timely basis copies of all fiscal and 
administrative reports concerning Unit expenditures from the State parent 
agency? 
b.  Does the Unit maintain an equipment inventory? 
c.  Does the Unit apply generally accepted accounting principles in its control of Unit 
funding? 
12. A Unit should maintain an annual training plan for all professional disciplines.  
In meeting this standard, the following performance indicators will be considered: 
a.  Does the Unit have a training plan in place and funds available to fully implement 
the plan? 
b.  Does the Unit have a minimum number of hours training requirement for each 
professional discipline, and does the staff comply with the requirement? 
c.  Are continuing education standards met for professional staff? 
d.  Does the training undertaken by staff aid in the mission of the Unit?  
   
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APPENDIX B 
Referrals Received by the Unit by Source, Fiscal Years 2009 to 2011 
Fiscal Year (FY) 
FY 2010  FY 2011  FYs 2009 to 2011 
2009 
Source  Patient  Patient  Patient  Patient 
Abuse  Abuse  Abuse  Abuse 
Fraud  Fraud  Fraud  Fraud 
and  and  and  and 
Neglect  Neglect  Neglect  Neglect 
Surveillance and 
Utilization Review  7  0  2  0  4  0  13  0 
Subsystem (SURS) 
Medicaid agency (other 
4  12  0  0  0  0  4  12 
than SURS) 
State survey and 
1  3  0  0  1  0  2  3 
certification 
Other State agencies  2  6  1  6  2  0  5  12 
Licensing boards  1  0  1  0  2  0  4  0 
Law enforcement 
3  1  6  1  4  1  13  3 
agencies 
Health and Human 
Services Office of  2  0  4  0  1  0  7  0 
Inspector General (OIG) 
Prosecutor  1  0  0  0  0  0  1  0 
Providers  1  28  4  26  4  7  9  61 
Provider associations  0  9  1  11  0  0  1  20 
Private health insurers  0  0  0  0  0  0  0  0 
Ombudsman  1  7  2  4  0  0  3  11 
Adult Protective Services  2  7  1  4  0  0  3  11 
Private citizens  48  3  85  4  91  1  224  8 
Medicaid Fraud Control 
1  1  0  0  0  0  1  1 
Unit (MFCU) hotline 
Other  6  5  5  1  3  2  14  8 
Total referrals  
80  82  112  57  112  11  304  150 
received by the Unit 
 
Source: OIG analysis of New Hampshire MFCU data, 2012. 
 
   
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APPENDIX C 
Fraud Investigations Opened and Closed by Provider Category, Fiscal 
Years 2009 to 2011 
 Fiscal Year (FY) 
Provider Category  FY 2010  FY 2011  FYs 2009 to 2011 
2009 
Facilities  Opened  Closed  Opened  Closed  Opened  Closed  Opened  Closed 
Hospitals  2  1  1  1  1  2  4  4 
Nursing facilities  0  0  1  1  0  0  1  1 
Other long-term care 
0  0  0  0  0  0  0  0 
facilities 
Substance abuse treatment 
0  0  0  0  0  0  0  0 
centers 
Other facilities  0  0  0  0  2  1  2  1 
Practitioners  Opened  Closed  Opened  Closed  Opened  Closed  Opened  Closed 
Doctors of medicine or 
   0  1     0  0   2  0  2  1 
osteopathy 
Dentists  1  1  1  4  1  1  3  6 
Podiatrists     0     0     0     0     0     0  0  0 
Optometrists and opticians     0     0     0     0     0     0  0  0 
Counselors and 
1  3  1  2  1     0  3  5 
psychologists 
Chiropractors     0     0     0     0     0     0  0  0 
Other practitioners  2     0  1  3     0     0  3  3 
Medical Support  Opened  Closed  Opened  Closed  Opened  Closed  Opened  Closed 
Pharmacies     0  2  1  1  1  1  2  4 
Pharmaceutical 
9  4  9  11  6  11  24  26 
manufacturers 
Suppliers of durable medical 
   0     0     0  2  1     0  1  2 
equipment and/or supplies 
Laboratories  1  1     0     0     0     0  1  1 
Transportation services     0     0  2  1  4  2  6  3 
Home health care agencies  1  1  2  1  6  7  9  9 
Home health care aides     0     0     0     0     0     0  0  0 
Nurses, physician assistants, 
nurse practitioners, and  1  1     0     0  1  1  2  2 
certified nurse aides 
Radiologists     0     0     0     0     0     0  0  0 
Other medical support     0     0     0     0     0     0  0  0 
Program Related  Opened  Closed  Opened  Closed  Opened  Closed  Opened  Closed 
Managed care      0     0     0     0     0     0  0  0 
Medicaid program 
1  1     0     0     0     0  1  1 
administration 
Billing company     0     0     0     0     0     0  0  0 
Other program related     0     0     0     0     0     0  0  0 
Total, All Provider 
19  16  19  27  26  26  64  69 
Categories 
 
Source: Office of Inspector General analysis of New Hampshire Medicaid Fraud Control Unit data, 2012. 
   
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APPENDIX D 
Patient Abuse and Neglect Investigations Opened and Closed by Provider 
Category, Fiscal Years 2009 to 2011 
Fiscal Year (FY) 
Provider Category  FY 2010  FY 2011  FYs 2009 to 2011 
2009 
Opened  Closed  Opened  Closed  Opened  Closed  Opened  Closed 
 
Nursing facility  1  0  1  2  0  0  2  2 
Nondirect care  0  0  0  0  0  0  0  0 
Other long-term care  1  0  0  1  0  0  1  1 
Nurses, physician 
assistants, nurse 
7  5  2  4  1  2  10  11 
practitioners, and 
certified nurse aides 
Home health care aides  0  0  0  1  0  0  0  1 
Other  19  19  18  22  4  7  41  48 
Total  28  24  21  30  5  9  54  63 
 
     Source: Office of Inspector General analysis of New Hampshire Medicaid Fraud Control Unit data, 2012. 
 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    20 
   
   
APPENDIX E 
Confidence Intervals for Case File Review Data 
We estimated the following 3 population values for all 155 case files from the results of 
our review of the 70 case files selected in our simple random sample.  The table below 
includes the estimate descriptions, sample sizes, point estimates, and 95-percent 
confidence intervals for these 3 estimates.  
 
Table E-1:  Confidence Intervals for Case File Review Data 
Sample 
Data Element Description  Point Estimate  95-Percent Confidence Interval  
Size 
Case files that included an opening 
memorandum signed by the Unit  70  98.6%  92.3%100% 
director 
Case files that included a closing 
memorandum signed by the Unit  61  100%  94.8%100% 
director 
Case files that lacked documentation 
of periodic supervisory review  52*  94.2%  84.1%98.8% 
between case opening and closing 
 
*Of the 70 case files reviewed, 18 were for multi-State cases thatbecause they involved the National Association of 
Medicaid Fraud Control Unitswere worked on primarily by the Unit director.  Because the Unit director was the only 
supervisor in the Unit, we excluded these 18 case files from our analysis of documented periodic supervisory review.  
 
Source: Office of Inspector General analysis of New Hampshire Medicaid Fraud Control Unit case files, 2012. 
 
 
 
 
   
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APPENDIX F 
Unit Comments 
 
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New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    23 
   
   
 
 
   
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    24 
  Conclusion 
The New Hampshire MFCU appreciates the efforts of H!-IS-OJG and the consultations 
provided by the Onsite Review. We remain committed to meeting and exceeding the standards 
for Medicaid Fraud Control Units despite noted obstacles. We understand and conntr with the 
recommendations, all of which will be implemented in a manner consistent with our mission. 
Respectfully submitted, 
Karin Eckel 
Assistant Attomey General 
Director. Medicaid Fraud Control Unit 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)  25   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Jodi Nudelman, Regional 
Inspector General for Evaluation and Inspections in the New York regional 
office, and Nancy Harrison and Meridith Seife, Deputy Regional 
Inspectors General.  
Vincent Greiber served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the New York regional office who 
conducted the study include Hailey Davis.  Central office staff who 
provided support include Thomas Brannon, Kevin Farber, and 
Christine Moritz.  Office of Investigations staff who contributed to the 
report include Colleen Fleming.  Office of Management and Policy staff 
who contributed to the report include Alexis Lynady. 
 
 
 
 
New Hampshire Medicaid Fraud Control Unit: 2012 Onsite Review (OEI-02-12-00180)    26 
   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.