Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
M  O
ED  ICARE S  VERSIGHT OF 
 
C
  OMPOUNDED 
 
P U
HA RMACEUTICALS  SED IN 
 
H  
OSPITALS 
 
Daniel R. Levinson  
Inspector General  
 
January 2015 
OEI-01-13-00400   
   
EXECUTIVE SUMMARY:  MEDICARES OVERSIGHT OF COMPOUNDED 
PHARMACEUTICALS USED IN HOSPITALS  
OEI-01-13-00400 
 
WHY WE DID THIS STUDY 
A 2012 nationwide meningitis outbreak caused by contaminated injections, which were 
produced by a standalone compounding pharmacy, raised concerns about compounded 
sterile preparations (CSPs). Subsequent Office of Inspector General (OIG) work found 
that almost all acute-care hospitals use CSPs and most contract with standalone 
compounding pharmacies to provide at least some of these products.  The Centers for 
Medicare & Medicaid Services (CMS) oversees the safety of CSPs prepared and used in 
Medicare-participating hospitals through the hospital certification process, in which State 
survey agencies or CMS-approved accreditors assess hospital compliance with 
requirements for drug compounding.  This study provides information about the extent to 
which Medicares oversight of hospitals addresses recommended practices for CSPs.  In 
2013, Congress passed the Drug Quality and Security Act, which clarifies the Food and 
Drug Administrations authority over standalone compounding pharmacies. 
 
HOW WE DID THIS STUDY  
We reviewed the practices of the five entities that oversee hospitals that participate in 
Medicarenamely, CMS and the four hospital accreditors approved by CMS.  Through 
consultation with experts in CSP oversight, OIG identified 55 recommended practices for 
CSP oversight in acute-care hospitals.  Representatives from each oversight entity 
participated in a structured interview and completed a questionnaire about how their 
respective surveys of hospitals incorporate these recommended practices.  We analyzed 
the data from the interviews and the questionnaire to determine the extent to which 
Medicares oversight addresses recommended practices for CSP oversight. 
 
WHAT WE FOUND 
Oversight entities address most of the recommended CSP-related practices at least some  
of the time.  However, only one oversight entity always reviews hospital contracts with 
standalone compounding pharmacies.  Oversight entities may also lack the human capital 
required to thoroughly review hospitals preparation and use of CSPs.  Surveyors receive 
limited training specific to compounding, and most oversight entities do not routinely 
include pharmacists on hospital surveys.  Finally, although most oversight entities are 
considering changes to how they oversee hospitals preparation and use of CSPs, none of 
them are considering changes to how they oversee hospitals contracts with standalone 
compounding pharmacies. 
 
WHAT WE RECOMMEND  
CMS should (1) ensure that hospital surveyors receive training on standards from  
nationally recognized organizations related to safe compounding practices and (2) amend 
its interpretive guidelines to address hospitals contracts with standalone compounding 
pharmacies.  CMS concurred with both recommendations. 
   
TABLE OF CONTENTS 
 
Objective......................................................................................................1 

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

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

Findings........................................................................................................8 

Oversight entities address most of the expert-recommended 

practices related to CSPs at least some of the time  .........................8 

Only one oversight entity always reviews hospitals contracts with 

standalone compounding pharmacies ............................................10 

Oversight entities may lack the human capital required to 
thoroughly review hospitals preparation and use of CSPs............11 
 
Most oversight entities are considering changes to their oversight 

of hospitals preparation and use of CSPs ......................................12 

Conclusion and Recommendations ............................................................13 

Agency Comments and Office of Inspector General Response .....15 

Appendix....................................................................................................16 

A: Oversight Entity Responses to the Office of Inspector General 

Questionnaire on Recommended Practices for Hospital 

Compounding Oversight ................................................................16 

B: Agency Comments  ...................................................................20 

Acknowledgments......................................................................................22 

 
   
   
OBJECTIVE 
To determine the extent to which Medicares oversight of hospitals 
addresses recommended practices for compounded sterile preparations. 
BACKGROUND 
A 2012 nationwide meningitis outbreak caused by contaminated injections 
that were compounded by the New England Compounding Center raised 
major concerns about compounded pharmaceutical products.  The Centers 
for Disease Control and Prevention (CDC) reports that 751 cases of fungal 
infections and 64 deaths are linked to this outbreak.1    
Pharmaceutical compounding is the creation of a prescription drug tailored 
to meet the needs of an individual patient.  For example, a compounding 
pharmacist may produce a version of a drug without an ingredient to 
which a patient may be allergic, or the pharmacist might create a liquid 
form of a drug for a patient who is unable to swallow a pill.  Traditionally, 
pharmacies compounded a drug upon receipt of a prescription for an 
individual patient.  However, recent trends in drug compounding have 
included the large-scale production of certain drugs by standalone 
compounding pharmacies to meet the needs of some hospitals.2  Hospitals 
may contract with multiple standalone pharmacies and may also 
compound drugs within their own pharmacies.   
Compounded Drugs 
There are two broad categories of compounded drugs:  nonsterile 
preparations and sterile preparations, also known as compounded sterile 
preparations (CSPs). Nonsterile preparationssuch as ointments applied 
to the skin or capsules or pills that  a patient takes orallyare lower risk 
products. Standards for producing nonsterile preparations are less 
stringent than those for CSPs. 
CSPs are higher risk products that are generally administered to patients 
via injection or infusion. Preparation of CSPs requires more expertise and 
more extensive safety measures.  CSPs may be prepared in a variety of 
settings, including a patients bedside for immediate use, a hospital 
pharmacy, or a contracted standalone pharmacy.  Risks associated with 
CSP preparation include the use of the wrong medium or the wrong 
concentration for mixture, contamination with pathogens, and human 
____________________________________________________________ 
1 CDC, Multistate Outbreak  of  Fungal Meningitis and Other Infections. Accessed at 
http://www.cdc.gov/hai/outbreaks/meningitis.html   on November 26, 2014.  
2 S. Tavernise,  FDA Chief Seeks Expanded  Authority to Improve Safety of  Drug  
Compounders,  The New York Times, November 14, 2012.  
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   1 
   
   
error.   Among hospitals that participate in Medicare, 92 percent use CSPs.3   
Of these hospitals, almost 80 percent contract with at least one standalone 
compounding pharmacy to provide CSPs.  
United States Pharmacopoeia 
The United States Pharmacopoeia (USP) is an official compendium of 
drug standards in the United States.4  Chapter 797 of the USP  
Pharmaceutical CompoundingSterile Preparations, commonly referred 
to as USP 797, provides product safety and quality standards for preparing 
CSPs.5  USP 797 includes standards for all risk levels of CSPs, including 
those prepared at a patients bedside for immediate use.  Pharmacies 
engaged in compounding have widely adopted USP 797 standards, which 
28 States enforce to varying degrees.6, 7  The Centers for Medicare & 
Medicaid Services (CMS) requires the hospital pharmacy to be 
administered in accordance with accepted professional principles.  The 
standards in USP 797 qualify as accepted professional principles. 
Other Guidelines Related to Sterile Compounding 
The Institute for Safe Medication Practices (ISMP) is a nonprofit 
organization that aims to educate the health care community and 
consumers about safe medication practices.  In 2013, ISMP published 
guidelines for the safe preparation of CSPs. Experts developed these 
guidelines to provide procedures and safe practices for reducing errors in 
CSP preparation.8  Among other things, the guidelines address drug 
storage, compounding, product labeling, and staff management. 
____________________________________________________________ 
3 OIG,  Memorandum Report:   High-Risk Compounded  Sterile Preparations and 
Outsourcing by Hospitals That Use Them, OEI-01-13-00150, April 2013.   

4 The Federal Food, Drug, and Cosmetic Act  201(j) and  (g)(1)(A) (21  U.S.C.   321(j) 

and (g)(1)(A)) (defining the terms official compendium and drug). 

5 The United States Pharmacopeial Convention.  USP-NF General Chapter 797 

Pharmaceutical CompoundingSterile Preparations. The United States Pharmacopoeia 

and the National Formulary, ch. 797 (2011). 
 
6 American Society of Health  Systems Pharmacists (ASHP), The ASHP Discussion Guide 

on USP Chapter <797> for Compounding  Sterile Preparations.  Accessed at 

https://www.ashp.org/s_ashp/docs/files/DiscGuide797-2008.pdf  on November 26, 2014. 
 
7 National Conference of State Legislatures, State Regulation of Compounding 

Pharmacies. Accessed at http://www.ncsl.org/research/health/regulating-compounding-
pharmacies.aspx on  November 26, 2014. 
 
8 ISMP, Proceedings from the ISMP Sterile Preparation Compounding  Safety Summit:  
Guidelines for SAFE Preparation  of Sterile Compounds. Accessed at 
http://www.ismp.org/tools/guidelines/IVSummit/IVCGuidelines.pdf on   
November 26, 2014.  
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   2 
   
   
In 2010, ASHP published guidelines on contracting for sterile 
compounding services.9   These guidelines provide factors for hospitals to 
consider when deciding whether to contract with a standalone 
compounding pharmacy, as well as suggested contract provisions.  They 
also provide guidance on how to evaluate a standalone compounding 
pharmacys performance and how to address quality or performance issues 
with a standalone compounding pharmacy. 
Medicares Oversight of Hospitals 
Medicares quality oversight of hospitals is based on the Medicare 
Conditions of Participation (hereinafter referred to as the CoPs).10   The 
CoPs are baseline health and safety requirements that hospitals must meet 
to be eligible for participation in Medicare.11   They cover practices 
ranging from the credentialing and privileging of physicians to hospital 
management.  Each CoP details specific standards that hospitals must 
meet.   
Hospital pharmaceutical compounding is addressed directly by the CoP for 
pharmaceutical services and indirectly in the CoPs for governing body and 
infection control.12   The pharmaceutical services CoP requires that all 
compounding be performed either by pharmacy personnel or under the 
supervision of pharmacy personnel.13   The governing body CoP applies to 
hospitals that contract with standalone pharmacies insofar as this CoP  
requires hospital executives to monitor contracted relationships.14  Finally, 
the infection control CoP mandates that hospitals maintain a sanitary 
environment that discourages the spread of infection through the facility.15  
Hospitals may choose to demonstrate that they meet the CoPs through an 
onsite inspection, typically called a survey, that is conducted by either an 
accreditor or a State survey agency (hereinafter State agency).16  Both 
accreditors and State agencies rely on surveys to determine whether 
hospitals newly enrolling in Medicare meet the CoPs, to reevaluate those 
____________________________________________________________ 
9 ASHP, ASHP Guidelines on Outsourcing Sterile Compounding Services. Accessed at 

http://www.ashp.org/doclibrary/bestpractices/mgmtgdloutsourcingsterilecomp.aspx on 
 
November 26, 2014. 
 
10 42 CFR pt. 482. 

11  Social Security Act,  1861(e), 42 U.S.C.  1395x(e);  42 CFR  488.3(a)(2). 

12 42 CFR  482.25 (Pharmaceutical Services); 42 CFR  482.12(e) (Governing Body); 

42 CFR   482.42 (Infection Control). 
 
13 CMS, State Operations  Manual, Appendix A, A-0501.  Accessed  at 

http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads  

/som107ap_a_hospitals.pdf on  June 24, 2014. 

14 Ibid.,  A-0083. 

15  Ibid., A-0747 and A-0749. 

16 Social Security Act,   1865, 42 U.S.C.  1395bb; 42 CFR   488.5(a). 

Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   3 
   
   
already in the Medicare program, and to respond to complaints and 
adverse events. Accreditors conduct surveys using their own survey 
protocols, whereas State agencies conduct surveys following the guidance 
outlined in the interpretive guidelines maintained by CMS.17 CMS 
reviews the results of these surveys to determine whether the hospital is 
eligible to participate in Medicare.18  
Pursuant to the Social Security Act, hospitals accredited by certain 
national accreditors may be deemed to meet the CoPs.19  Hospitals pay 
accreditors to go through their accreditation processes.  Four organizations 
accredit hospitals for participation in Medicare:  the Joint Commission, the 
American Osteopathic Association, Det Norske Veritas Healthcare, and the 
Center for Improvement in Healthcare Quality.   The Joint Commission 
accredits the majority of accredited hospitals.  
Standalone Compounding Pharmacy Registration 
In November 2013, Congress passed the Drug Quality and Security Act, 
clarifying the Food and Drug Adminstrations (FDA) oversight authority 
over standalone compounding pharmacies.20   This new law allows 
standalone compounding pharmacies to voluntarily register with FDA as 
CSP-outsourcing facilities. FDA inspects registered pharmacies according  
to a risk-based schedule, and these pharmacies must comply with FDAs 
current good manufacturing practices, among other requirements.21   As of 
January 1, 2015, 26 standalone compounding facilities had registered with 
FDA.22 
   
 ____________________________________________________________ 
17 CMS, State Operations  Manual, Appendix A.  Accessed at 
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/  

som107ap_a_hospitals.pdf on June 24, 2014. 

18  42  CFR  488.12  
 
19  Social Security Act,   1865, 42 U.S.C.  1395bb; 42 CFR   488.12. 

20  P.L.  No. 113-54,  102. 
 
21 FDA,  Compounding Quality Act.  Accessed at http://www.fda.gov/drugs/  

GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ on June  4, 2014. 

22 FDA,  Registered Outsourcing  Facilities. Accessed at http://www.fda.gov/Drugs/ 
 
GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm378645.htm on 
 
August 4, 2014. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   4 
   
   
Related Office of Inspector General Work 
In 2013, OIG released a memorandum report on the extent to which 
Medicare-participating acute-care hospitals used CSPs and purchased 
them from standalone pharmacies.23   This study found that 92 percent of 
hospitals used CSPs and about 80 percent of these hospitals contracted 
with at least one standalone pharmacy to provide CSPs. 
In April 2014, OIG released a study that found that CMS does not track 
the number of claims for compounded drugs under Medicare Part B or the 
corresponding amounts paid.24   That study also found that Part B claims do 
not contain adequate information to identify compounded drugs and do not 
identify the compounding pharmacies that produced the drugs.  
METHODOLOGY 
We used three data sources in our review.  First, we interviewed experts in 
the field of compounding oversight and reviewed guidance and 
recommendations from USP, ISMP, and ASHP.  We then conducted 
structured interviews with CMSas it provides the guidelines for State 
and accreditor surveysand with the four CMS-approved hospital 
accreditors.  (Hereinafter, we refer to CMS and the accreditors as 
oversight entities.)  We also asked them to complete a questionnaire 
detailing the compounding-specific elements of their surveys.  To the 
extent possible, we corroborated their responses by reviewing their survey 
policy and procedure manuals. 
Scope 
This study is national in scope. It examined the oversight activities of the 
five oversight entities. We examined CMS policies and procedures for 
State survey and certification agencies, but we did not examine the 
oversight activities of each individual State agency.  This study focused on 
Medicares oversight of hospital use of CSPs because of the greater risk 
these may present to patients relative to those of nonsterile preparations, 
such as ointments and capsules. 
     
   
____________________________________________________________ 
23 OIG,  Memorandum Report:   High-Risk Compounded  Sterile Preparations and 
Outsourcing by Hospitals That Use Them, OEI-01-13-00150, April 2013.   
24 OIG,  Compounded Drugs Under Medicare  Part B:  Payment  and Oversight, 
OEI-03-13-00270, April 2014. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   5 
   
   
    Data Collection    
Identifying Recommended Practices for Oversight of CSP Preparation and 
Use in Acute-Care Hospitals. Through consulting with experts in the 
oversight of CSPs, OIG identified 55 recommended practices for the 
oversight of CSP preparation and use in acute-care hospitals.  These 
recommended practices include measures identified by USP, ISMP, ASHP, 
and other experts. For this analysis, we grouped the recommended 
practices into seven areas: 
(1)  physical plant and environmental quality,   
(2)  policies and procedures for compounding CSPs,  
(3)  pharmacy personnel training and evaluation,  
(4)  patient monitoring and adverse event reporting,  
(5)  CSP storage,  
(6)  compounding equipment use and maintenance, and 
(7)  contracts with standalone compounding pharmacies.   
Structured interviews of oversight entities.   We interviewed representatives 
from oversight entities to learn more about how Medicare oversight 
incorporates the recommended practices related to CSPs.  During these 
interviews we asked oversight entities to describe: 
(1)  the documents that surveyors review prior to hospital surveys, 
(2)  the way in which surveyors learn about compounding in hospitals,  
(3)  compounding-specific training that surveyors receive,  
(4)  the way in which oversight entities cite hospitals for deficiencies 
related to compounding, and 
(5)  any future plans that oversight entities have for changing the way 
that surveys address compounding in hospitals. 
We conducted four of these interviews over the phone and one in person.   
Questionnaire sent to oversight entities. We sent oversight entities a 
questionnaire about how their hospital survey processes incorporate 
recommended practices for oversight of sterile drug compounding.  The 
questionnaire asked whether each recommended practice is always, 
some of the time, or never addressed during surveys of hospitals that 
use CSPs. We asked oversight entities to corroborate their responses by 
providing us with the relevant sections of their manuals on policies and 
procedures for surveys. See Appendix A for a complete inventory of 
questionnaire responses. 
   
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   6
   
   
Data Analysis  
We analyzed the data from the questionnaire and the structured interviews 
to determine the extent to which Medicares oversight addresses the  
55 recommended practices we identified across 7 areas.  We totaled the 
responses for each area to determine the extent to which Medicares  
oversight of hospitals addresses recommended practices for CSPs.  To  
corroborate covered entities responses to the questionnaire, we reviewed 
the survey policy and procedure manuals that they provided to us.  For 
added context, we aggregated the structured interview data and identified 
how oversight entities approach oversight of CSPs in hospitals. 
Limitations  
Medicare does not require that the recommended practices we identified 
be incorporated into hospital surveys.   We did not evaluate the validity of 
hospital surveys conducted by the five oversight entities.  Our review 
relied on self-reported data from the oversight entities.  It was not feasible  
to independently verify these data. 
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. 
 
 
 
 
 
 
 
 
 
 
 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   7 
   
   
FINDINGS 
Oversight entities address most of the
expert-recommended practices related to CSPs at 
least some of the time 
Because they have limited time to assess hospitals entire operations, 
oversight entities may address some of the recommended practices for 
oversight of CSPs on a case-by-case basis.  Oversight entities are more 
likely to address CSPs when a problem with CSPs is apparent during the 
current survey or was apparent during a prior survey.  Although oversight 
entities reported not always asking hospitals directly about CSP  
preparation and use during hospital surveys, they generally reported that 
they assume hospitals prepare and use CSPs.25  
The six areas that oversight entities examine some of the time include 
physical plant and environmental quality, policies and procedures for 
compounding CSPs, pharmacy personnel training and evaluation, patient 
monitoring and adverse event reporting, CSP storage, and compounding 
equipment use and maintenance (see Figure 1 on the next page). 
Physical plant. Oversight of the physical area where compounding occurs 
includes assessing its cleanliness and appropriateness for the types of 
CSPs prepared, including hazardous CSPs (such as chemotherapy drugs).  
Most oversight entities reported that they always assess the environmental 
quality and control in hospital compounding areas and the appropriateness 
of the areas where hazardous CSPs are prepared.  However, with regard to 
hospitals written policies and procedures related to maintaining the 
hospital compounding area, most oversight entities review these 
documents on some, but not all, surveys.  Some oversight entities told us 
that surveyors prioritize observing hospitals maintenance practices in 
compounding areas and review written procedures only when necessary to 
confirm that hospital procedures comply with the oversight entitys  
standards. 
 
   
 ____________________________________________________________ 
25 Two  oversight entities reported that they ask  hospitals whether they prepare CSPs 
onsite.  The three other oversight entities reported that they most often learn about CSP 
preparation while touring the pharmacy.  With regard to  use of CSPs, only one oversight  
entity reported  asking each  hospital directly about CSP use.  Two of the oversight entities 
reported that they assume that all hospitals use CSPs, and two more reported that they 
observe CSP use during their  tours of hospitals. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   8 
   
   
Figure 1: Extent to Which the Five Oversight Entities Incorporate Recommended Practices 
for Each Area of Compounding Oversight Into Surveys  
Physical Plant
 
(13 recommended practices, 65 responses)
 
ht Policies and Procedures for Compounding CSPs 
g (12  recommended practices, 60 responses) 
si
r
e
v
O
g  Pharmacy Personnel  Training  and Evaluation
 
n (5  recommended practices, 25  responses) 

di
n
u
o
p Adverse Events
 
m
o (2 recommended practices, 10  responses)
 
C
of 
a  CSP Storage 

e
Ar (3 recommended practices, 15  responses)
 
Compounding Equipment
 
(9 recommended practices, 45  responses)
 
0%  25%  50%  75%  100% 
Oversight  Entities'  Responses on Recommended Practices 
Always  Some  of the Time  Never 
 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
Note: Responses represent the number of recommended practices multiplied by the five oversight entities. 
Policies and procedures for compounding CSPs. Recommended oversight 
of policies and procedures for preparing CSPs includes ensuring that 
hospitals policies and procedures address (1) the safety of staff when they 
are preparing hazardous CSPs and (2) the quality and sterility of CSPs.  
Most oversight entities reported that they always assess hospitals  
procedures for keeping staff safe when compounding hazardous CSPs.  
Additionally, on some, but not all, surveys, oversight entities generally 
review written policies and procedures for CSPs compounded onsite and 
for outsourcing CSPs. Most oversight entities told us that they would 
request these policies and procedures only if a surveyor discovered a 
noncompliant practice related to compounding CSPs.   
Pharmacy personnel training and evaluation. Oversight of pharmacy 
personnel training and evaluation includes assessing whether the hospital 
provides continuing education and competency evaluation to ensure that 
staff prepare CSPs in accordance with accepted standards.  Most oversight  
entities always review the training and competency records of pharmacy 
personnel. However, most oversight entities delve into a hospitals 
requirements for compounding-specific training and competency 
evaluation only on some surveys.  Generally, they look more deeply into 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   9 
   
   
personnel training and evaluation for a sample of personnel or in instances 
when they identify a problem with personnel during the survey. 
Adverse events. We identified two recommended practices related to 
adverse events: (1) assessing hospitals feedback mechanisms for patients 
and caregivers to report CSP-related concerns and (2) determining 
whether hospitals track outsourced CSPs to the patient level.  Most 
oversight entities reported that they always assess hospitals feedback 
mechanisms for patients and caregivers to report concerns about CSPs.  
Oversight entities vary as to how often they determine whether hospitals 
track outsourced CSPs to the patient level:  four always or sometimes do 
this, while one does not do this at all. 
CSP storage. Oversight of CSP storage includes assessing whether 
hospitals store CSPs under the conditions necessary to maintain their 
sterility and stability.  On some, but not all, surveys, most oversight 
entities assess whether hospitals store CSPs under proper conditions.  Two 
oversight entities told us that surveyors always review medication storage.  
The other three oversight entities review this some of the time. 
Compounding Equipment. Recommended practices related to 
compounding equipment focus on reviewing hospitals procedures for 
equipment use and maintenance to ensure that CSPs are prepared safely 
and accurately.  Two oversight entities consistently review hospitals  
preventative maintenance documentation for all equipment used to prepare 
CSPs. In general, oversight entities give surveyors the discretion to decide 
which equipment policies and procedures to assess.  For instance, a 
surveyor might review policies and procedures related to equipment use 
only if related concerns arise through observation or interviews during the 
survey.  
Only one oversight entity always reviews hospitals 
contracts with standalone compounding pharmacies 
Four of the five hospital oversight entities either do not or only sometimes  
review hospital contracts with standalone compounding pharmacies during 
surveys. This review could include whether the terms of the contracts 
address CSP recall procedures, proper storage of CSPs while in transit, 
and quality assurance related to CSP  sterility and potency, among others.  
All oversight entities request lists of hospitals contracted services during 
surveys. One oversight entity always reviews hospitals contracts with 
standalone pharmacies and assesses whether hospitals evaluate 
pharmacies compliance with the contracts. (See Figure 2 on the next 
page.) Most hospitals that use CSPs contract with one or more standalone 
pharmacies to produce some of their CSPs.  In particular, hospitals tend to 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   10 
   
   
outsource the highest risk CSPs, such as the compounded injections 
responsible for the 2012 fungal meningitis outbreak. 
Figure 2: Extent to Which the Five Oversight Entities Incorporate Recommended Practices 
for Oversight of Contracts With Outside Contracting Pharmacies Into Surveys  
Contracts With  O utside  Com  pounding Pha rmacies 
(1 1 re co mme nde d pr actic e s, 55 r es po ns es) 
0%  25%  50%  75%  100% 
Ove rsight Entitie s' Re sponses  on Re comme nded Practices 
Alwa ys  Some of  the Time  Never 
 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
Note: Responses represent the number of recommended practices multiplied by the five oversight entities. 
Finally, three oversight entities do not determine whether the standalone 
pharmacies that hospitals use have voluntarily registered with FDA as 
CSP-outsourcing facilities. The remaining two oversight entities 
sometimes take standalone pharmacies FDA registration status into 
account when they examine hospital contracts.  Standalone compounding 
pharmacies that register with FDA are subject to FDA inspection.  Because 
most hospitals do not inspect the standalone pharmacies with which they 
contract, a satisfactory FDA inspection might be the only indicator of the 
conditions at a standalone pharmacy.   
Oversight entities may lack the human capital required 
to thoroughly review hospitals preparation and use of 
CSPs 
We acknowledge that many of the recommended practices included in our 
review are highly technical and specific to compoundingone of many 
activities that hospital oversight entities must assess.  In fact, experts we 
spoke with said that only a trained pharmacist would be able to perform a 
comprehensive review of these recommended practices.  
Pharmacists are not routinely involved in most hospital 
surveys, but surveyors can draw on pharmacists expertise 
when needed  
Only two oversight entities employ pharmacists as hospital surveyors; 
however, neither includes a pharmacist on every survey team.  One of 
these oversight entities regularly sends pharmacists on hospital surveys 
and tries to include a pharmacist on surveys of larger hospitals with more 
complicated pharmacy operations.  The other oversight entity with 
pharmacist surveyors does not regularly include them on surveys, but may 
include a pharmacist on complaint surveys related to alleged pharmacy 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   11 
   
   
problems.  Surveyors at two other oversight entities have access to a 
pharmacist-consultant on an as-needed basis if a pharmacy-related 
problem arises during a survey.  Finally, surveyors at one oversight entity 
do not have access to pharmacists during the survey process.  
Surveyors receive limited training specific to compounding  
Two oversight entities do not provide any compounding-specific training 
to their surveyors. The other three oversight entities vary in the 
compounding-specific training they provide, ranging from observation of 
compounding during training surveys to an online training module 
dedicated to USP 797. 
Most oversight entities are considering changes to 
their oversight of hospitals preparation and use of 
CSPs 
Three oversight entities are considering changing the way they address 
preparation of CSPs in hospitals, but they have not committed to doing so.  
For instance, one oversight entity is revising how it oversees drug 
compounding in home infusion pharmacies and may apply the changes it 
makes for this setting to hospitals.  Potential changes include revising 
training for surveyors, so that they have the tools to consistently evaluate 
compounding practices and the compounding environment during surveys.  
Another oversight entity has created optional standards for hospitals 
related to CSPs and is considering applying these standards to all surveys.  
The remaining oversight entity is considering incorporating additional 
elements of USP 797 into its surveys.  The other two oversight entities do 
not plan to change their oversight of CSP preparation in hospitals. 
Finally, despite outsourced compounded injections being responsible for 
the 2012 fungal meningitis outbreak, none of the oversight entities plan to 
change how their oversight addresses hospital contracts with standalone 
compounding pharmacies. 
   
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   12 
   
   
CONCLUSION AND RECOMMENDATIONS 
CSPs are a complex and highly technical aspect of hospital operations.  
We identified 55 recommended practices for overseeing CSPs in hospitals 
by consulting with experts and reviewing standards from nationally 
recognized organizations. However, CSPs are only one of many areas of 
hospital operations that Medicare oversight entities must assess during 
onsite surveys. 
Accordingly, oversight entities mustand doexercise their discretion 
when determining how they assess CSP-related hospital 
operations. Indeed, in this evaluation, we found that oversight entities 
follow most recommended practices at least some of the time and that 
their surveyors exercise discretion as to the scope and depth of their 
reviews on the basis of what they encounter at each hospital. 
To exercise their discretion most effectively in the oversight of CSPs, 
surveyors need the appropriate knowledge of this highly technical aspect 
of hospital operations. However, we found that oversight entities provide 
limited training specific to compounding to their surveyors. 
In addition, contracting with standalone pharmacies for CSPs gets limited 
attention from the oversight entities.  Only one of the five oversight 
entities always reviews hospitals contracts with standalone pharmacies.  
Such a review could include whether contracts adequately address CSP  
recall procedures, proper storage of CSPs while in transit, and quality 
assurance related to CSP sterility and potency, among others.  Finally, 
none of the entities plan to change how they assess these contracts in light 
of FDAs new initiative to register and inspect standalone compounding 
pharmacies.  
Therefore we recommend that CMS: 
 
Ensure that hospital surveyors receive training on standards 
from nationally recognized organizations related to safe 
compounding practices   
CMSs interpretive guidelines for hospital surveys state that  
pharmaceutical services must be administered in accordance with 
standards or recommendations promoted by nationally recognized 
professional organizations.  We recognize that it is not reasonable to 
expect surveyors to be experts on the highly technical aspects of 
pharmaceutical compounding.  However, CMS should work with experts 
and professional organizations, such as USP, ISMP, and ASHP, to develop 
surveyor training on standards for compounding from nationally 
recognized organizations.  This training could help ensure that CMS and 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   13 
   
   
State agency surveyors have the basic competencies necessary to assess  
compounding in hospitals and to determine when they need to call on 
additional expertise beyond that of the survey team.  When accreditation 
organizations apply or reapply for deeming authority, CMS should 
ensure that they have equivalent training in place for their surveyors.  
Amend the interpretive guidelines to address hospitals  
contracts with standalone compounding pharmacies  
Medicares pharmaceutical services CoP covers the compounding of 
medications, but it does not speak to hospitals contracts with standalone 
compounding pharmacies.  Hospitals often contract with such pharmacies 
for high-risk CSPs, such as those that caused the 2012 meningitis 
outbreak. 
To improve oversight of hospitals  contracts with standalone compounding 
pharmacies, CMS should amend the interpretive guidelines for hospital 
surveys. Specifically, within guidance on the pharmaceutical services 
CoP, CMS could instruct surveyors to assess hospitals management of 
contracts with standalone compounding pharmacies.  This guidance could 
reference hospitals responsibility for overseeing their contracted services  
under the quality assessment and performance improvement (QAPI) CoP  
and the governing body CoP.   The QAPI CoP requires hospitals to have an 
ongoing, data-driven performance improvement program that covers all 
hospital services, including those furnished under contract.  The governing 
body CoP holds hospitals governing bodies accountable for all contracted 
services and requires governing bodies to use the QAPI program to assess 
services provided under contract. Referencing these requirements within 
the pharmaceutical services CoP could help to ensure that surveyors 
always review hospitals contracts with standalone compounding 
pharmacies. 
Additionally, within the interpretive guidelines, CMS could require that 
when surveyors assess hospitals management of contracts with standalone 
compounding pharmacies, they review whether these pharmacies have 
registered with FDA. We understand that CMS may need to seek 
additional authority to make this change. 
Finally, CMS should ensure that any changes it makes to the interpretive 
guidelines are reflected in accreditors survey procedures when they apply 
or reapply for deeming authority. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   14 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with both of our recommendations.   
In response to our first recommendation, CMS stated that surveyors could 
benefit from more training in assessing compounding practices in 
hospitals.  It will explore developing online training materials for 
surveyors with State survey agencies and will explore ways to collaborate 
with national experts to develop this training.  CMS also noted that 
approved hospital accreditors must have survey procedures comparable to 
those established for State survey agencies and that they use qualified 
surveyors. 
In response to our second recommendation, CMS stated that it will explore 
revising its interpretive guidelines to make surveyors aware that the CSPs 
used in hospitals are frequently handled by contracted compounding 
pharmacies.  It further stated that because Medicare regulations do not 
require hospitals to contract with compounding pharmacies that have 
registered with FDA, surveyors would limit their assessments to how 
hospitals ensure that their contracted pharmacy services comply with 
regulations. 
OIG supports CMSs efforts to improve Medicares oversight of 
pharmaceutical compounding in hospitals.  We will monitor these efforts 
through our recommendations-tracking process. 
For the full text of CMSs comments, see Appendix B.  
   
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   15 
   
   
APPENDIX A 
Oversight Entity Responses to the Office of Inspector General 
Questionnaire on Recommended Practices for Hospital 
Compounding Oversight 
 
 
Table A1:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to the Hospital Physical Plant and 
Environmental Quality 
 
Oversight Entities Responding  
Some of 
Always   Never  
Recommended Practice   the Time  
Do surveyors request a copy of the hospitals pharmacy cleaning logs?  1  4  0 
Do surveyors request a copy of the hospitals pharmacy environmental 
0  5  0 
sampling logs?  
If the hospital prepares CSPs onsite, do surveyors assess whether the area 
of preparation is appropriate for all CSP risk levels compounded at the  2  3  0 
hospital? 
If the hospital prepares hazardous CSPs onsite, do surveyors assess the 
appropriateness of the physical area where hazardous CSPs are  3  2  0 
compounded?  
If the hospital prepares CSPs onsite, do surveyors assess the environmental 
3  2  0 
quality  and control in the area of preparation?  
If always or some of the time, do surveyors assess the adequacy  of the 
environmental quality and control for each risk level of CSP prepared at the  2  3  0 
hospital? 
If the hospital prepares CSPs onsite, do surveyors review the hospitals 
 
written procedures outlining the following: 
     Cleaning and disinfecting of the compounding areas?   1  4  0 
     Personnel hand hygiene and garbing in compounding areas?   3  2  0 
     Employee aseptic technique in compounding areas?   2  3  0 
     Environmental sampling in compounding areas?  0  5  0 
     Facility and engineering control testing and certification in compounding  
0  4  1 
areas?  
If the hospital prepares CSPs onsite, do surveyors assess the adequacy of 
personnel protective equipment for compounding CSPs, including applicable  2  3  0 
policies and procedures for personnel protective equipment?  
For hospitals that prepare hazardous CSPs onsite, do surveyors assess the 
adequacy of personnel protective equipment for compounding hazardous  2  3  0 
CSPs, including applicable policies and procedures? 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
 
 
 
 
 
 
 
 
 
 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   16 
   
   
Table A2:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to Policies and Procedures for 
Compounding CSPs 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors request copies of all the hospitals policies and procedures 
0  5  0 
related to any pharmacy-compounded sterile preparations (CSPs)?  
Do surveyors request copies of all the hospitals policies and procedures for 
0  4  1 
outsourcing CSPs? 
Do surveyors request a copy of the hospitals most recent USP 797 Gap 
0  3  2 
Analysis? 
Do surveyors determine whether the hospital has a quality  assurance plan in 
3  2  0 
place to verify the accuracy and sterility of compounded CSPs?  
Do surveyors perform an assessment of the hospitals pharmacy  procedures 
2  3  0 
for finished preparation checks? 
Do surveyors assess the hospitals policies and procedures for maintaining 
1  4  0 
CSP quality and purity until time of dispensing or beyond-use date?  
Do surveyors assess the extent to which the hospitals policies and procedures 
0  5  0 
for immediate use CSPs correspond with USP 797 in all areas of the hospital? 
Do surveyors review the hospitals policies and procedures for establishing 
1  4  0 
beyond-use dating? 
Do surveyors assess the appropriateness of beyond-use dates on opened or 
needle-punctured single-dose and multiple-dose containers in all areas of the  2  3  0 
hospital? 
Do surveyors determine whether all orders entered into a computerized 
3  2  0 
prescriber order-entry system at the hospital are verified by a pharmacist?  
Do surveyors review the hospitals policies and procedures for compounding 
2  3  0 
hazardous CSPs, such as chemotherapy drugs? 
If a hospital prepares radiopharmaceutical CSPs, do surveyors assess the 
4  1  0 
hospitals procedures to limit staff radioactivity exposure?  
 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
 
 
Table A3:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to Pharmacy Personnel Training and 
Evaluation 
 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors request a copy of the hospitals pharmacy personnel training and 
3  2  0 
competency records? 
For hospitals that prepare CSPs onsite, do surveyors determine whether the 
hospital requires that personnel receive continuing education (e.g., annually)  1  4  0 
on compounding CSPs? 
For hospitals that prepare CSPs onsite, do surveyors determine whether the 
hospital requires (e.g., annually) that personnel demonstrate competencies on  1  4  0 
compounding CSPs? 
Do surveyors review past performance evaluations for pharmacy personnel?  0  4  1 
If surveyors always  or sometimes review past performance evaluations for 
pharmacy  personnel, do surveyors review how the hospital addresses  3  1  1 
pharmacy  personnel performance issues?  
 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   17 
   
   
Table A4:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to Patient Monitoring and Adverse Event 
Reporting 
 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors assess the hospitals feedback mechanism for patients and 
3  2  0 
caregivers to report concerns regarding CSPs or CSP-administration devices? 
Do surveyors determine if the hospital has a policy  for tracking outsourced 
2  2  1 
compounded medications to the patient level? 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
 
 
Table A5:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to CSP Storage 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors assess whether the hospital stores CSPs under proper 
2  3  0 
conditions for the specified beyond-use date on the label? 
If the hospital uses hazardous CSPs (i.e., chemotherapy), is there a separate 
3  2  0 
assessment of the storage conditions for hazardous CSPs? 
Do surveyors review whether the hospital has documented justification if CSPs 
are stored longer than deemed appropriate for the beyond-use date and  0  2  3 
storage conditions per USP 797?  
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
 
 
Table A6:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to Compounding Equipment Use and 
Maintenance 
 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors review  whether routine preventive maintenance is documented 
2  3  0 
for all equipment used during the compounding of CSPs? 
Do surveyors review  whether routine calibration is documented for  all 
2  1  2 
equipment used during the compounding of CSPs? 
Do surveyors review  whether certification of equipment and areas used during 
1  3  1 
the compounding of CSPs is current and without lapse for one year? 
For hospitals that prepare CSPs onsite, do surveyors review  hospitals written 
 
procedures outlining the following with respect to compounding equipment:  
Required equipment calibration?  1  3  1 
Routine (scheduled) equipment maintenance?   2  2  1 
Monitoring for proper equipment function?  1  3  1 
Procedures for equipment use?   1  3  1 
Equipment cleaning?  1  3  1 
Verifying the accuracy and precision of automated  compounding devices for    
0  3  2 
parenteral nutrition compounding? 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   18 
   
   
Table A7:  Extent to Which Oversight Entity Surveys Incorporate 
Recommended Practices Related to Hospital Contracts With Standalone  
Compounding Pharmacies 
 
  Oversight Entities Responding  
Some of 
Recommended Practice   Always   Never  
the Time  
Do surveyors determine whether the outside pharmacies that the hospital 
0  2  3 
contracts with to provide CSPs are registered with FDA?  
Do surveyors review the hospitals contracts with outside compounding 
1  2  2 
pharmacies? 
If surveyors always  or sometimes review contracts between the hospital and 
outside compounding pharmacies, do surveyors review  whether the terms of   
the contracts address the following  
The hospitals right to inspect the contracted compounding pharmacy?   0  1  4 
CSP recall procedures?   0  1  4 
Requirements for the contracted compounding pharmacy to submit quality  
0  3  2 
reports to the hospital?  
Proper storage of CSPs while in transit?  0  2  3 
Quality assurance related to CSP sterility?   0  2  3 
Quality assurance related to CSP potency?   0  2  3 
Quality assurance related to CSP stability and expiration dating?   0  2  3 
If surveyors always  or sometimes review contracts between the hospital and 
outside compounding pharmacies, do surveyors review  whether the hospital 
0  3  2 
documents each contracted pharmacys compliance with the terms of the 
contract? 
If surveyors always  or sometimes review contracts between the hospital and 
outside compounding pharmacies, do surveyors review  whether the hospital 
1  3  1 
evaluates each contracted pharmacys compliance with the terms of the 
contract? 
Source:  OIG analysis of responses to  questionnaire by CMS and the  four accreditors, 2014. 
 
 
 
 
	
 
 
 
 
 
 
   
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   19 
  APPENDIX 8 
Agency Comments 
l-4-	
, 

,.,..........
DEPARTMENT OF HEALTH & HUMAN SERVICES  Centers for Medicare & Medicaid Services 
Administrator 
Washington, DC 20201 
NOV Z1  2014 
To: 	 Daniel R: Levinson 

Inspector General 

Office ofthe I~ector General 

From: 	 ~Iavenner 

Administrator 

Centers for Medicare & Medicaid Services 

Subject: 	 Medicare Exercises Discretion in Oversight ofPharmaceutical Compounding in 
Hospitals (OEI-0 1-13-00400) 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the Office ofthe Inspector General's (OIG) draft report. CMS is committed to 
ensuring hospital compliance with requirements for drug compounding, including prevention of 
the spread ofinfections through proper compounding, particularly ofcompounded sterile 
preparations (CSPs) for intravenous use. CMS oversees hospitals through the certification 
process, which includes assessing hospital compliance with requirements for drug compounding, 
either via State Survey Agencies acting on CMS' s behalf or via accreditation under a eMS
approved Medicare accreditation program. CMS relies on the Food and Drug Administration 
(FDA) oversight ofmanufacturers to ensure safety ofcommercially available prescription drugs. 
CMS concurs with the OIG's fmdings that hospital oversight entities address most recommended 
practices related to CSPs, and that recommended oversight practices included in the review are 
highly technical and specific to compounding. 
OIG Recommendation 
The OIG recommends that CMS ensure that hospital surveyors receive training on national 
standards related to safe compounding practices. 
CMS Response 
CMS concurs with this recommendation. While it is not reasonable to expect hospital surveyors 
to be experts on the highly technical aspects ofcompounding, surveyors could benefit from more 
training to ensure their basic competencies in assessing compounding practices in hospitals. 
CMS will explore developing on-line training materials for surveyors with State Survey 
Agencies and ways to collaborate with national expert organizations in developing such training. 
With respect to CMS-approved Medicare hospital accreditation programs, the applicable 
regulations at 42 CFR 488.8(a)(2)(ii) require that they have survey procedures comparable to 
those established for State Survey Agencies, and that they use qualified surveyors. All renewal 
applications for these accreditation programs are routinely reviewed for their comparability to 
the survey process current as of the time ofthe renewal application. 
20 
Medicare's Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   
   
 
 
 
   
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   21 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Joyce Greenleaf, Regional 
Inspector General for Evaluation and Inspections in the Boston regional 
office; Kenneth Price, Deputy Regional Inspector General; and 
Russell Hereford, Deputy Regional Inspector General.  
Jessica Fargnoli served as the team leader for this study, and Jesse Valente 
served as the lead analyst. Central office staff who provided support 
include Christine Moritz and Talisha Searcy.  
Medicares Oversight of Compounded Pharmaceuticals Used in Hospitals (OEI-01-13-00400)   22 
   
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.