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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
A Message From Christi A. Grimm, Principal Deputy Inspector General 
I am pleased to submit this Semiannual Report to Congress 
summarizing the activities of the Department of Health and Human 
Services (HHS), Office of Inspector General (OIG), for the 6-month 
period ending on March 31, 2020.  This report describes OIGs work 
to detect and prevent fraud, waste, and abuse and to promote the 
economy, efficiency, and effectiveness of HHS programs and 
operations. 
 
During this reporting period, OIG continued its priority work to 
combat opioid-related fraud and provide valuable data to 
policymakers on opioid prescribing and treatment services.  An OIG 
audit uncovered $92.5 million in improper Medicare payments to 
suppliers of inhalation drugs, and an OIG investigation of a massive 
sober home fraud scheme led to prison sentences for three 
individuals.  Other notable work included a report that found poor 
interagency communication and internal management decisions 
failed to protect childrens interests and left HHS unprepared for the zero-tolerance policy, and a review 
that found the National Institutes of Health can do more to address concerns about foreign threats to the 
confidentiality of the peer-review process.  Our work recommended improvements to program integrity, 
including stronger monitoring of incidents of abuse and neglect involving Medicaid beneficiaries with 
developmental disabilities.  The Semiannual Report more fully describes our portfolio of completed work 
for the reporting period. 
 
Along with other agencies across the Federal Government, OIG recently turned our attention to the 
coronavirus disease 2019 (COVID-19) public health emergency.  OIG is investigating and holding 
accountable those who would exploit the emergency to defraud the public and HHS programs, including 
through fraudulent marketing schemes for COVID-19 tests, identity theft, and submission of false claims for 
payment.  Building on longstanding work focused on emergency preparedness and response, OIG is 
undertaking and planning oversight of HHSs COVID-19-related programs to ensure that program 
requirements are met to protect patient health and safety, that taxpayer funds invested to provide relief to 
providers and care to patients are not misspent, and that critical infrastructure supporting an effective 
emergency response is secure.  OIG is working to provide the public and policymakers in HHS and 
Congress with sophisticated analyses and relevant, reliable, and actionable data and information. 
 
In March, OIG released our strategic plan for 20202025.  We set three goals: to fight fraud, waste, and 
abuse; to promote quality, safety, and value in HHS programs and for HHS beneficiaries; and to advance 
excellence and innovation.  In todays rapidly changing health and human services environment, OIG will 
continue to conduct the most consequential oversight work and optimize resources to deliver impactful 
results.  We do this through data-driven reviews and investigations, supported with modern auditing, 
investigative, and evaluative methods, and a team of over 1,600 dedicated public servants.  Impact.  
Innovation.  People focus.  These are the core values that inspire OIG to serve the American public with 
independent, objective oversight. 
 
OIG appreciates the ongoing support of Congress and H HS for our important work. 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
Table of Contents 
OIGs Approach to Driving Positive Change  1 
Highlights of OIG Accomplishments  5 
OIG Participation in Congressional Hearings  14 
Selected Acronyms and Abbreviations   15 
Medicare and Medicaid Reports and Reviews  16 
Legal and Investigative Activities Related to Medicare and Medicaid  35 
Public Health and Human Service Agency Reports and Reviews   54 
Legal and Investigative Activities Related to Public Health and Human Service Agencies  61 
Other HHS-Related Reviews and Investigative Activities  63 
Appendix A: Questioned Costs and Funds To Be Put to Better Use  67 
Appendix B: Peer-Review Results  73 
Appendix C: Summary of Sanction Authorities  76 
Appendix D: Reporting Requirements in the Inspector General Act of 1978  79 
Appendix E: Reporting Requirements in the Inspector General Empowerment Act of 2016  82 
Appendix F: Anti-Kickback StatuteSafe Harbors  90 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIGs Approach to Driving Positive Change 
THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) Office of Inspector General (OIG) provides 
independent and objective oversight that promotes economy, efficiency, and effectiveness in HHS 
programs and operations.  OIGs program integrity and oversight activities are shaped by legislative and 
budgetary requirements and adhere to professional standards established by the Government 
Accountability Office (GAO), the Department of Justice (DOJ), and the Inspector General community.  
Through a nationwide network of audits, investigations, and evaluations, OIG carries out its mission to 
protect the integrity of HHS programs and the health and welfare of the people served by those programs.  
OIGs work is conducted by three operating componentsthe Office of Audit Services (OAS), the Office of 
Evaluation and Inspections (OEI), and the Office of Investigations (OI)with assistance from the Office of 
Counsel to the Inspector General (OCIG) and Mission Support and Infrastructure (MSI).  
 
OIG Organization 
Office of Audit Services 
OAS conducts audits of HHS programs and operations through its own resources or by overseeing 
audit work done by others.  Audits examine the performance of HHS programs and/or of HHSs 
grantees and contractors in carrying out their respective responsibilities and provide independent 
assessments of HHS programs and operations.  These audits help reduce waste, abuse, and 
mismanagement and promote the economy, efficiency, and effectiveness of programs and 
operations throughout HHS. 
 
Office of Evaluation and Inspections 
OEI conducts national evaluations to provide HHS, Congress, and the public with timely, useful, 
and reliable information on significant issues.  These evaluations focus on preventing fraud, waste, 
and abuse and promoting economy, efficiency, and effectiveness in HHS programs.  OEI reports 
also present practical recommendations for improving program operations. 
 
Office of Investigations 
OI conducts criminal, civil, and administrative investigations of fraud and misconduct related to 
HHS programs, operations, and beneficiaries.  With investigators working in almost every State, the 
District of Columbia, and Puerto Rico, OI coordinates with DOJ and other Federal, State, and local 
law enforcement authorities.  OI also coordinates with OAS and OEI when audits and evaluations 
uncover potential fraud.  OIs investigative efforts often lead to criminal convictions, administrative 
sanctions, or civil monetary penalties (CMPs). 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Office of Counsel to the Inspector General 
OCIG provides legal services to OIG, rendering advice and opinions on HHS programs and 
operations and providing all legal support for OIGs internal operations.  OCIG represents OIG in all 
civil and administrative fraud and abuse cases involving HHS programs, including the False Claims 
Act, program exclusion, self-disclosure, and CMP cases.  In connection with these cases, OCIG also 
negotiates and monitors corporate integrity agreements (CIAs).  OCIG renders advisory opinions, 
issues compliance program guidance, publishes fraud alerts, and provides other guidance to the 
health care industry about the anti-kickback statute and other OIG enforcement authorities.   
 
Mission Support and Infrastructure 
MSI is composed of the Immediate Office of the Inspector General and the Office of Management 
and Policy.  MSI is responsible for coordinating OIG activities and providing mission support, 
including setting vision and direction for OIGs priorities and strategic planning; ensuring effective 
management of budget, finance, human resource management, and other operations; and serving 
as a liaison with HHS, Congress, and other stakeholders.  MSI plans, conducts, and participates in a 
variety of cooperative projects within HHS and with other Government agencies.  MSI provides 
critical data analytics, data management, and information technology (IT) infrastructure that 
enables OIG components to conduct their work efficiently and effectively.  
 
OIG Strategic Publications
 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
HHS-OIG Strategic Plan 
OIGs Strategic Plan outlines the approach to protecting the integrity of HHS programs.  The plan 
has three key goals: (1) to fight fraud, waste, and abuse; (2) to promote quality, safety, and value in 
HHS programs and for HHS beneficiaries; and (3) to advance excellence and innovation.  These 
goals drive OIGs work planning for audits and evaluations as well as OIGs approach to 
enforcement.  These goals also serve as a starting point for OIGs own assessment of its 
effectiveness. 
 
OIG Work Plan 
OIGs Work Plan sets forth projects that OIG plans to undertake during the fiscal year (FY) and 
beyond.  Projects listed in the Work Plan span HHSs operating divisions (OpDivs), which include 
the Centers for Medicare & Medicaid Services (CMS); public health agencies such as the Centers for 
Disease Control and Prevention (CDC) and the National Institutes of Health (NIH); and human 
services agencies such as the Administration for Children and Families (ACF) and the 
Administration for Community Living (ACL).  The Work Plan also includes oversight of State and 
local governments use of Federal funds as well as the administration of HHS.  Some of the projects 
described in the Work Plan are statutorily required. 
 
OIGs Top Recommendations 
OIG drives positive change by not only identifying risks, problems, abuses, and deficiencies, but 
also recommending solutions to address them.  OIG maintains a list of recommendations it has 
made to address vulnerabilities detected in its reviews, and it keeps track of whether these 
recommendations have been implemented.  OIG systematically follows up on its recommendations 
with the relevant HHS programs.  From among the recommendations that have not been 
implemented, OIG identifies the top recommendations that, if implemented, are likely to garner 
significant savings and improvements in quality, efficiency, and effectiveness.  OIG compiles these 
recommendations in the Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations (previously known as the Compendium of Unimplemented Recommendations). 
 
Top Management and Performance Challenges Facing HHS 
To focus HHSs attention on the most pressing issues, each year OIG identifies the Top 
Management and Performance Challenges facing HHS.  These top challenges arise across HHS 
programs and cover critical HHS responsibilities, including delivering quality services and benefits, 
exercising sound fiscal management, safeguarding public health and safety, and enhancing 
cybersecurity. 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIGs Semiannual Report to Congress  
OIGs Semiannual Report(s) to Congress (Semiannual Reports) describe OIGs work on identifying 
significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the 
administration of HHS programs and operations that were disclosed during the reporting period.  
In the report below, we present OIG expected recoveries, criminal and civil actions, and other 
statistics as a result of our work for the semiannual reporting period of October 1, 2019, through 
March 31, 2020.  We also highlight some of our work completed during this semiannual reporting 
period. 
 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Highlights of OIG Accomplishments 
HHS-OIGS SEMIANNUAL REPORT TO CONGRESS (Semiannual Report) describes OIGs work identifying 
significant risks, problems, abuses, deficiencies, remedies, and investigative outcomes relating to the 
administration of HHS programs and operations that were disclosed during the semiannual reporting 
period, October 1, 2019, through March 31, 2020.  In this section, we highlight significant results from 
selected audits, evaluations, and enforcement activities completed during the reporting period. 
 
At-a-Glance Highlights 
Statistic  Semiannual Reporting Period 
(10/1/20193/31/2020) 
Audit Reports Issued  81 
Evaluations Issued  14 
Expected Audit Recoveries  $605.2 million 
Questioned Costs  $288.4 million 
Potential Savings  $911.3 million 
New Audit and Evaluation  273 
Recommendations 
Recommendations Implemented by  130 
HHS Operating Divisions 
Expected Investigative Recoveries  $1.51 billion 
Criminal Actions  443 
Civil Actions  370 
Exclusions  903 
 
Results for the Semiannual Reporting Period 
During this semiannual reporting period (October 1, 2019, through March 31, 2020), we issued 81 audit 
reports and 14 evaluation reports.  Our audit work identified $605.2 million in expected recoveries, as well 
as $288.4 million in questioned costs (costs questioned by OIG because of an alleged violation, costs not 
supported by adequate documentation, or the expenditure of funds where the intended purpose is 
unnecessary or unreasonable).  Our audit work also identified $911.3 million in potential savings for HHS
funds that could be saved if HHS implemented all of OIGs audit recommendations.  During this reporting 
period, OIG made 273 new audit and evaluation recommendations, which are crucial to encourage positive 
change in HHS programs.  Meanwhile, HHS operating divisions implemented 130 prior recommendations, 
leading to positive impact for HHS programs and beneficiaries. 
 
OIG also remains at the forefront of the Nations efforts to fight fraud in HHS programs and hold 
wrongdoers accountable for their actions.  Along with our partners DOJ, Medicaid Fraud Control Units 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
(MFCUs or Units), and other Federal, State, and local law enforcement agencies, we detect, investigate, and 
prosecute fraud through a coordinated and data-driven approach.  OIGs investigative work led to $1.51 
billion in expected investigative recoveries and 443 criminal actions during this reporting period.  OIG also 
took civil actions, such as assessing monetary penalties, against 370 individuals and entities, and excluded 
903 individuals and entities from Federal health care programs. 
 
OIG continues to focus on the most significant and high-risk issues in health care and human services.  Our 
mission is to provide objective oversight to promote the economy, efficiency, effectiveness, and integrity of 
HHS programs, as well as the health and welfare of the people they serve.  Below we highlight results from 
selected OIG oversight and enforcement activities from the semiannual reporting period of October 1, 
2019, through March 31, 2020, organized by subject area.  A comprehensive list of OIG work during the 
reporting period follows, and Appendices AF provide data to meet the reporting requirements in the 
Inspector General Act of 1978. 
 
Preparing for and Responding to the COVID-19 Pandemic and Other Public 
Health Emergencies  
OIG plays a vital role in supporting the nations ability to prepare, respond, and recover from natural 
disasters and public health emergencies.  In response to the novel coronavirus disease 2019 (COVID-19) 
pandemic, OIG immediately deployed law enforcement personnel in its Emergency Support Function No. 
13 role to provide Federal public safety and security assistance to local, State, Tribal, territorial, and Federal 
organizations.  OIG staff protected quarantined patients at health care facilities and aided in the safe 
transport of patients to and from health care facilities.   
In addition, OIG rapidly launched a series of oversight and enforcement actions related to the COVID-19 
pandemic.  By mid-March, OIG had developed a dedicated system to report fraud schemes for COVID-19, 
issued a Special Fraud Alert on COVID-19 to protect Medicare beneficiaries from identity theft, issued a 
Policy Statement to waive cost-sharing requirements for telehealth services, and initiated an assessment of 
CDCs provision of COVID-19 test kits and its oversight of laboratory testing.  For a complete listing of our 
oversight and enforcement actions, please see OIGs COVID-19 Portal.  In addition, OIG made operational 
and procedural changes to protect the safety and wellbeing of OIG employees and contractors while 
continuing to fulfill our mission.  OIGs modern approach to oversight and effort will allow us to quickly 
adapt and plan work responsive to the COVID-19 pandemic.  
Prior to the COVID-19 pandemic, OIG continued its longstanding work focused on ensuring the safety of 
nursing homes and ensuring health care facilities are prepared for a public health emergency.  In 2016, 
CMS updated its life safety and emergency preparedness regulations to improve protections for all 
Medicare and Medicaid beneficiaries, including those residing in nursing homes.  The regulatory updates 
included requirements that nursing homes have expanded sprinkler systems and smoke detector 
coverage; an emergency preparedness plan that is reviewed, trained on, tested, and updated at least 
annually; and provisions for sheltering in place and evacuation.  In response, OIG reviewed selected 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
nursing homes in California, Texas, Florida, and Missouri to determine whether the nursing homes 
complied with Federal requirements for life safety and emergency preparedness. 
 
OIG found deficiencies in all four States.  Deficiencies varied among the States.  Life safety deficiencies 
generally related to building exits, fire detection and suppression systems, hazardous storage, smoking 
policies, and electrical equipment maintenance, among others.  Emergency preparedness deficiencies 
generally related to written plans, emergency power, emergency communications, and training, among 
others.  OIG recommended that followup actions be taken with each nursing home to ensure that 
corrective actions have been taken regarding the identified deficiencies.  The States either agreed or 
partially agreed with our recommendations.  (See reports A-09-18-02009, A-06-19-08001, A-04-18-08065, 
and A-07-18-03230.)  
 
Protecting Unaccompanied Children in the Departments Care 
HHS, through ACFs Office of Refugee Resettlement (ORR), is responsible for ensuring the shelter and care 
of thousands of unaccompanied alien children who enter the United States without legal status.  Most of 
these children were transferred into ORRs custody after initially being taken into custody at the border by 
the Department of Homeland Security (DHS).  ORR provides temporary shelter, care, and other related 
services to children before they are released to sponsors (most often, family members).  OIG has devoted 
substantial efforts to protect the health and safety of children in ORR custody.  Significant OIG work during 
this semiannual reporting period related to ORR includes the following:  
 
OIG found that poor interagency communication and internal management decisions that failed to protect 
childrens interests left HHS unprepared for the zero-tolerance policy.  This lack of preparation impeded 
HHSs ability to identify, care for, and reunify separated children.  ACF needs to address the management 
concerns that we identified to improve its operation of the Unaccompanied Alien Children (UAC) Program.  
ACF agreed with our recommendations to address these issues.  (See report OEI-BL-18-00510.) 
  
Preventing and Treating Opioid Misuse    
OIG continued its multidisciplinary approach to addressing the national opioid epidemic in this reporting 
period.  As Deputy Inspector General for Investigations Gary Cantrell described in his October 2019 
testimony before the Senate Committee on Finance, OIGs work covers both the prescribing and treatment 
dimensions of the opioid crisis.  OIGs ongoing efforts to combat inappropriate prescribing and 
distribution include investigations of pill mills that illegally dispense prescription opioids and the doctors 
involved in the fraud.  To address the treatment dimension, OIGs multifaceted approach has included 
evaluating access to drugs that treat opioid use disorder, overseeing Medicaid claims for treatment 
services and HHS grants to States, and investigating of fraud schemes involving substance abuse treatment 
centers.  Significant OIG work during this semiannual reporting period includes the following: 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIGs investigation helped convict a doctor of illegally prescribing and distributing large quantities of 
prescription opioids.  A provider was convicted on 861 Federal counts of drug distribution, including 
distribution resulting in death, for operating a pill mill in Martinsville, Virginia.  Patients travelled 
hundreds of miles and paid cash to receive opioid prescriptions at his office, which regularly stayed open 
after midnight and lacked basic medical supplies.  Opioid prescriptions written by this provider caused 
Medicaid and Medicare Part D to pay hundreds of thousands of dollars in suspected fraudulent claims.  
This provider was sentenced to 40 years in prison. 
 
OIG found that buprenorphine-waivered providers may not always be located in the areas where access to 
treatment for opioid use disorder is most critical.  Buprenorphine, a key drug used in medication-assisted 
treatment (MAT) for opioid use disorder, can be prescribed in office settings only by providers that obtain 
waivers from the Substance Abuse and Mental Health Administration (SAMHSA).  Among the 1,100 U.S. 
counties identified as having the greatest need for opioid use disorder treatment services, OIGs analysis of 
waivered providers showed that 56 percent likely had inadequate capacity to treat patients with 
buprenorphine in an office setting.  SAMHSA concurred with OIGs recommendation to target efforts to 
increase the participation of waivered providers in high-need counties.  (See report OEI-12-17-00240.) 
 
OIG found that the State of New York claimed Medicaid funds for opioid treatment program (OTP) 
services that did not meet requirements.  New York improperly claimed an estimated $39.3 million in 
Federal Medicaid reimbursement for OTP services that did not comply with Federal and State 
requirements.  The improper claims identified by OIG occurred because providers had inadequate 
documentation of services, did not ensure that services were provided in accordance with beneficiaries 
treatment plans, and did not maintain necessary signatures for services.  OIG recommended that New York 
refund the $39.3 million to the Federal Government and ensure that providers comply with requirements 
for OTP services.  (See report A-02-17-01021.) 
 
OIGs review of Federal grants to States for opioid response activities identified unspent funds and limited 
data on a key metric.  OIG found that over $300 million of grant funding for SAMHSAs State Targeted 
Response to the Opioid Crisis grant program remained unspent after 2 years, with 14 States having spent 
less than half of their grant allocations.  Additionally, while States reported using their grants to expand 
access to treatment, SAMHSA did not track how many patients received MAT, the primary form of 
evidence-based treatment.  SAMHSA concurred with OIGs recommendations to work with States to 
address barriers to timely spending and require States to specifically report how many patients are 
receiving MAT.  (See report OEI-BL-18-00460.) 
 
OIG investigated a massive sober home fraud scheme, leading to prison sentences for three individuals.  
Three former co-owners and clinical directors of a group of purported substance abuse treatment centers 
and sober homes were sentenced to prison for their roles in a $21 million health care fraud conspiracy.  
According to court documents, the scheme involved submitting fraudulent claims for substance abuse 
treatment services to several health insurance companies.  The three conspirators pleaded guilty and were 
sentenced to a combined 15 years and 4 months in prison and ordered to pay $4.2 million in restitution. 
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
An electronic health record (EHR) vendor admits to kickback scheme aimed at increasing opioid 
prescriptions.  The vendor agreed to pay $145 million to resolve criminal and civil investigations relating to 
its EHR software.  The vendor admitted that it solicited and received kickbacks from a major opioid 
company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain 
medications. 
 
Fighting Fraud To Protect the Medicare and Medicaid Programs  
In 2018, Medicare spent nearly $741 billion, and provided health coverage to 59.9 million beneficiaries.  
OIG has sustained efforts to root out illegal activity that can unnecessarily raise costs for the Medicare 
program or put beneficiaries at risk.  Significant OIG work during this semiannual reporting period includes 
the following: 
 
OIG found that some providers may be using beneficiaries Medicare Part D eligibility information 
improperly.  OIG discovered that providers were taking advantage of gaps in CMS's program integrity in 
Medicare Part D Eligibility Verification Transactions (E1 transactions).  Because E1 transactions contain 
beneficiary protected health information, we wanted to verify that the providers were appropriately using 
E1 transactions for their intended purposes.  The majority of providers used E1 transactions for some 
purpose other than to bill for a prescription or determine drug coverage billing order.  CMS agreed with 
our recommendations to ensure that providers are using eligibility information properly.  (See report  
A-05-17-00020.) 
   
A pharmaceutical company agreed to pay almost $12 million and enter into a CIA with OIG for violating 
the anti-kickback statute.  A pharmaceutical company entered into a $11.85 million False Claims Act 
settlement with the United States to resolve allegations that it paid the copayments of Medicare patients 
taking a certain drug to induce the patients to purchase, or their physicians to prescribe, the drug.  The 
pharmaceutical company agreed to pay $11.85 million to resolve its liability and entered into a CIA with 
OIG in connection with the settlement. 
 
OIG found that Medicare Part D does not have three key tools to protect against pharmacy fraud that are 
available in other parts of Medicare.  Three toolspharmacy enrollment, revocation, and preclusion
apply to pharmacies when they bill Medicare Parts B or C, but not when they bill Part D.  CMS agreed with 
our recommendations to allow Medicare Part D the ability to utilize these fraud prevention tools.  (See 
report OEI-02-15-00440.) 
 
Ensuring Medicaid Program Integrity 
Medicaid spending represents one-sixth of the of the national health care economy, and Medicaid serves 
more people, including some of the Nations most vulnerable individuals, than any other Federal health 
care program.  A key component of OIGs mission is to promote integrity and efficiency in Medicaid 
through a nationwide program of audits, evaluations, inspections, investigations, and enforcement actions.   
 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIG testified about OIGs Medicaid Program Integrity work at a congressional hearing.  In October, Brian 
Ritchie, Assistant Inspector General for Audit Services, testified at a congressional hearing before the 
Senate Committee on Finance, Subcommittee on Health Care.  The testimony addressed OIGs work on 
Medicaid beneficiary eligibility and OIGs commitment to ensure that Medicaid pays the right amount, to 
the right provider, for the right service, on behalf of the right beneficiary.  (See OIG congressional 
testimony.) 
 
OIG found that States could do more to prevent terminated providers from serving Medicaid beneficiaries.  
We found that nearly 1,000 terminated providersor 11 percent of all terminated providerswere 
inappropriately enrolled in State Medicaid programs.  These providers were associated with $50.3 million 
in Medicaid payments.  Despite legislative requirements in the 21st Century Cures Act designed to 
strengthen Medicaid program integrity, terminated providers continue to serve Medicaid beneficiaries.  
Some of these providers were terminated for criminal convictions, licensure issues, and provider 
misconduct, representing a risk to beneficiaries safety and their quality of care.  CMS agreed with our 
recommendations to help protect taxpayer dollars and the beneficiaries served by the Medicaid program.  
(See report OEI-03-19-00070.) 
OIG found that 23 States allowed unenrolled providers to serve Medicaid beneficiaries.  We found that 23 
States had not enrolled all Medicaid providers.  When States do not enroll and screen providers, Medicaid 
beneficiaries are exposed to potentially harmful providers.  CMS agreed with our recommendations to 
ensure that States enroll all providers.  (See report OEI-05-19-00060.) 
Ensuring Appropriate Use of HHS Funds 
OIG reviews of the administration of Medicaid and Medicare are critical to ensuring that Medicare and 
Medicaid funds are spent in accordance with payment rules and on behalf of eligible beneficiaries.  
Significant OIG work during this semiannual reporting period includes the following: 
 
OIG found billions of estimated Medicare Advantage (MA) payments from chart reviews raised concerns.  
OIG found billions of estimated risk-adjusted payments supported solely through chart reviews raised 
potential concerns about the completeness of payment data submitted to CMS, the validity of the 
diagnoses on chart reviews, and the quality of care provided to beneficiaries.  The risk adjustment program 
helps to ensure that sicker beneficiaries have continued access to MA plans.  Chart reviews can be a tool to 
improve the accuracy of risk-adjusted payments.  However, chart reviewsparticularly those not linked to 
service recordsmay provide MA organizations with opportunities to circumvent CMS face-to-face 
requirements and inflate payments inappropriately.  CMS agreed with our recommendations to address 
the vulnerabilities associated with chart reviews, particularly unlinked chart reviews, as a mechanism.  (See 
report OEI-03-17-00470.)   
OIG found that 60 hospitals received $3.5 billion in excessive outlier payments.  These payments 
represented a net of $502 million more than hospitals would have been paid if their outlier payments had 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
not been reconciled.  CMS did not detect or recover these excessive outlier payments.  CMS agreed with 
our recommendation that it require reconciliation of all hospital cost reports with outlier payments during 
the cost-reporting period.  If this requirement had been in effect for the 60 hospitals in our review, CMS 
would have saved approximately $125 million per year.  (See report A-05-16-00060.) 
OIG found that New Jersey claimed $63 million for unallowable Medicaid school-based administrative 
costs.  New Jersey improperly claimed $63.8 million after using a random moment sampling methodology 
that did not comply with statistical sampling requirements and was not adequately supported.  OIG 
recommended that the State refund $63.8 million in Federal Medicaid payments and revise its random 
moment sampling methodology to comply with Federal requirements.  (See report A-02-17-01006.) 
 
OIG found that Medicare improperly paid acute-care hospitals $54 million for inpatient claims.  Medicare 
improperly paid acute-care hospitals $54.4 million for 18,647 claims subject to Medicares post-acute-care 
transfer policy.  These hospitals improperly billed the claims by using incorrect patient discharge status 
codes.  Specifically, they coded these claims as discharges to home or to certain types of health care 
institutions, rather than as transfers to post-acute care.  CMS agreed with our recommendations that it 
direct the Medicare contractors to recover the $54.4 million in identified overpayments.  (See report        
A-09-19-03007.) 
OIG found that Medicare improperly paid suppliers $92.5 million for inhalation drugs.  On the basis of our 
sample results, we estimated that $92.5 million paid to suppliers was unallowable for Medicare 
reimbursement.  Medicare contractor oversight was not sufficient to ensure that suppliers complied with 
documentation requirements.  CMS agreed with our recommendations that it identify suppliers that 
consistently bill for inhalation drugs that do not comply with Medicare documentation requirements, 
perform reviews of those suppliers, collect the amount overpaid for unallowable claims, and educate them 
on Medicare requirements for inhalation drugs.  (See report A-09-18-03018.)  
OIG found that New York State claimed Federal reimbursement for unallowable childcare subsidies.  OIG 
found that New York State claimed Federal reimbursement for childcare subsidy payments made to New 
York City that did not comply with Federal and State requirements.  Based on our sample results, we 
estimated that New York State claimed Federal reimbursement of $24.7 million related to these 
unallowable payments.  During our audit period, New York City did not have controls in place to prevent 
these unallowable payments.  New York State agreed with our recommendation that it refund             
$24.7 million in unallowable childcare subsidies claimed for Federal reimbursement and ensure that New 
York Citys recently implemented program controls are properly functioning.  (See report A-02-17-02010.) 
Protecting Beneficiaries From Abuse, Neglect, and Unsafe Conditions 
Protecting individuals served by HHS programs from abuse, neglect, and unsafe conditions is central to 
OIGs mission.  Oversight work to ensure safety and well-being is particularly important for facilities and 
home-based programs that care for children and other vulnerable populations.  Significant OIG work 
during this semiannual reporting period includes the following: 
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
A pediatrician employed with the Indian Health Service (IHS) was sentenced to five consecutive life 
sentences for multiple sex offenses against children.  While employed with IHS in South Dakota, a 
pediatrician sexually abused multiple Native American children between 1999 and 2011.  The pediatrician 
was sentenced to five consecutive life sentences in Federal prison and was ordered to pay $800,000 in 
criminal fines and an $800 special assessment to the Federal Crime Victims Fund. 
OIG found that IHS strengthened patient protection policies but still needs to fully integrate them into 
practice and organizational culture.  In response to several recent cases of health care providers abusing 
patients under care at facilities, IHS strengthened patient protection policies.  Although IHSs policies are 
consistent with those of other health care organizations, the policies have coverage gaps and are still early 
in implementation.  IHS agreed with our recommendations to continue to actively promote the policies in 
practice and promote an organizational culture of transparency.  (See report OEI-06-19-00330.) 
 
OIG found that Pennsylvania did not adequately report and monitor incidents involving Medicaid 
beneficiaries with developmental disabilities who resided in community-based settings.  Specifically, 
Pennsylvania did not have adequate controls to detect unreported 24-hour reportable incidents and did 
not have controls in place to ensure that all beneficiary deaths were investigated and that all suspicious 
deaths were referred to law enforcement.  Pennsylvania agreed with our recommendations to improve its 
controls regarding the reporting and monitoring of 24-hour reportable incidents involving Medicaid 
beneficiaries with developmental disabilities residing in community-based settings.  (See report                
A-03-17-00202.) 
 
Safeguarding the Security and Integrity of Medical Research 
Congress, NIH, and Federal intelligence agencies have raised concerns about foreign and other threats to 
the integrity of taxpayer-funded research and intellectual property.  In FY 2020, OIG received $5 million in 
congressional appropriations to conduct oversight of NIH grant programs and operations.  OIGs oversight 
work is reviewing (1) intellectual property and cybersecurity protections, (2) compliance with Federal 
requirements and NIH policies for grants and contracts, and (3) integrity of grant application and selection 
processes.  Significant OIG work completed during this semiannual reporting period includes the following: 
 
OIG found that NIH had IT control weaknesses in its EHR system.  Among the interests to Congress were 
matters pertaining to cybersecurity protections and NIH compliance with Federal requirements.  This 
review found that NIH's information security policies and practices were not operating effectively to 
preserve the security, confidentiality, integrity, and availability of its electronic health information systems.  
This resulted in potential risks of unauthorized access, use, disclosure, disruption, modification, or  
destruction.  NIH agreed with recommendations to enhance its information security environment related 
to its EHR system.  (See report A-18-19-06003.)  
 
12 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIG found that NIH can do more to address concerns about foreign threats to the confidentiality of the 
peer-review process.  Each year NIH relies on thousands of peer reviewers to review tens of thousands of 
extramural grant applications, helping NIH determine the most promising research to fund.  OIG found 
that NIH enforces policies and procedures that protect confidential information in grant applications 
handled by peer reviewers, but that it could do more to address the risk that undue foreign influence 
poses to maintaining confidentiality.  NIH agreed with our recommendations regarding developing a 
measured, risk-based approach so that NIH can focus its oversight efforts on those circumstances or 
reviewers shown to pose the greatest risk to peer review integrity.  (See report OEI-05-19-00240.)  
 
Promoting Information Sharing in the Drug Supply Chain 
 
Drug diversion, counterfeiting, and the importation of unapproved drugs may result in potentially 
dangerous drugs entering the drug supply chain, posing a threat to public health and safety. To enhance 
the security of this supply chain, the Drug Supply Chain Security Act (DSCSA) requires trading partners in 
the drug supply chain to create a record of each drug product transaction.  The Food and Drug 
Administration (FDA) can use these records to investigate and identify potentially harmful drug products, 
prevent further distribution, and facilitate efficient recalls. 
OIG found that ownershipbut not physical movementof selected drugs can be traced through the 
supply chain.  OIG found that drug product tracing information can be used to trace ownership, but not 
physical movement, of selected drug products through the supply chain.  Knowing which trading partner 
owns a drug, where it is in the supply chain, and where it has been can help investigators from FDA do the 
following: ensure that a potentially dangerous drug is removed the drug supply; identify breaches; and 
protect patients from harmful, ineffective, and illegitimate drugs.  FDA agreed with our recommendations 
to continue establishing a system to trace drug product ownership through the supply chain to ensure the 
security of the drug supply.  (See report OEI-05-17-00460.) 
 
 
 
 
 
13 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIG Participation in Congressional Hearings 
 
Date  Witness  Testimony/Committee 
10/24/2019  Gary Cantrell, Deputy Inspector  OIG's Efforts to Address the Prescribing and 
General for Investigations  Treatment Dimensions of the Opioid Crisis, Senate 
Committee on Finance  
 
10/30/2019  Brian P. Ritchie, Assistant Inspector  Medicaid: Compliance with Eligibility 
General for Audit Services  Requirements, Senate Committee on Finance, 
Subcommittee on Health Care 
 
11/14/2019  Statement for the Record  Caring for Aging Americans, House Committee 
on Ways and Means 
 
2/27/2020  Suzanne Murrin, Deputy Inspector  Oversight of the Food and Drug Administration, 
General for Evaluation and  House Committee on Appropriations, 
Inspections  Subcommittee on Agriculture, Rural Development, 
Food and Drug Administration, and Related 
Agencies 
 
 
14 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Selected Acronyms and Abbreviations  
 
ACA  Patient Protection and Affordable Care Act 
ACF  Administration for Children and Families 
ACL  Administration for Community Living 
CDC  Centers for Disease Control and Prevention 
CIA  corporate integrity agreement 
CMP  civil monetary penalty 
CMS  Centers for Medicare & Medicaid Services 
CCDF  Child Care and Development Fund 
DHS  Department of Homeland Security 
DOJ  Department of Justice 
DME  durable medical equipment 
EMTALA  Emergency Medical Treatment and Labor Act 
FDA  Food and Drug Administration 
FY  fiscal year 
GAO  Government Accountability Office 
HHS  Department of Health and Human Services 
HIPAA  Health Insurance Portability and Accountability Act of 1996 
HRSA  Health Resources and Services Administration 
IHS  Indian Health Service 
LIHEAP  Low-Income Home Energy Assistance Program 
MCO  managed care organization 
MFCU  Medicaid Fraud Control Unit 
NIH  National Institutes of Health 
OAS  Office of Audit Services 
OCIG  Office of Counsel to the Inspector General 
OEI  Office of Evaluation and Inspections 
OI  Office of Investigations 
OIG  Office of Inspector General 
OMB  Office of Management and Budget 
SAMHSA   Substance Abuse and Mental Health Services Administration 
SNF  skilled nursing facility 
15 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Medicare and Medicaid Reports and Reviews 
Medicare Program Reports and Reviews 
Financial Management and Improper Payments 
Medicare Allowable Amounts for Certain Orthotic Devices Are Not Comparable With Payments Made 
by Select Non-Medicare Payers (A-05-17-00033), October 2019  
 
Medicare allowable amounts for certain orthotic devices are not comparable with payments made 
by select non-Medicare payers.  For calendar years (CYs) 2012 through 2015, we estimated that 
Medicare and beneficiaries paid $341.7 million more than select non-Medicare payers on 142 
Healthcare Common Procedure Coding System (HCPCS) codes and $4.2 million less than select 
non-Medicare payers on 19 HCPCS codes.  Generally, Medicare allowable amounts are more than 
select non-Medicare payer payments because CMS does not routinely evaluate pricing trends for 
orthotic devices or payments made by select non-Medicare payers.  Instead, CMS uses statutorily 
mandated fee schedule payments that have an economic update factor applied to them annually.  
 
We identified 95 of the 161 codes for which the Medicare allowable amounts could be adjusted 
using existing legislative authority to make those amounts comparable with payments made by 
select non-Medicare payers.  For the remaining 66 codes, CMS would be required to seek new 
legislative authority to make those adjustments. 
 
CMS concurred with our recommendations that it (1) review the allowable amounts for 161 orthotic 
device HCPCS codes and adjust the allowable amounts, as appropriate, using regulations 
promulgated under existing legislative authority or, if the allowable amounts cannot be adjusted 
using regulations promulgated under existing legislative authority, seek authority to align Medicare 
allowable amounts for these items with payments made by select non-Medicare payers and (2) 
routinely review Medicare allowable amounts for new and preexisting orthotic devices to ensure 
that Medicare allowable amounts are in alignment with payments made by select non-Medicare 
payers or pricing trends. 
 
Medicare Improperly Paid Acute-Care Hospitals $54.4 Million for Inpatient Claims Subject to the 
Post-Acute-Care Transfer Policy (A-09-19-03007), November 2019  
 
Medicare improperly paid acute-care hospitals $54.4 million for 18,647 claims subject to Medicares 
post-acute-care transfer policy.  These hospitals improperly billed the claims by using incorrect 
patient discharge status codes.  Specifically, they coded these claims as discharges to home or to 
certain types of health care institutions, such as facilities that provide custodial care, rather than as 
transfers to post-acute care.  
 
16 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Medicare makes the full Medicare Severity Diagnosis-Related Group (MS DRG) payment to an 
acute-care hospital that discharges an inpatient to home or certain types of health care institutions.  
In contrast, Medicare pays an acute-care hospital that transfers a beneficiary to post-acute care a 
per diem rate for each day of the beneficiarys stay in the hospital.  The total overpayment of   
$54.4 million represented the difference between the amount of the full MS DRG payments and 
the amount that would have been paid if the per diem rates had been applied. 
 
CMS concurred with our recommendations that it direct the Medicare contractors to (1) recover the 
$54.4 million in identified overpayments, (2) identify any claims for transfers to post-acute care in 
which incorrect patient discharge status codes were used and direct the Medicare contractors to 
recover any overpayments after our audit period, and (3) ensure that the Medicare contractors are 
receiving the post-payment edits automatic notifications of improperly billed claims and are taking 
action by adjusting the original inpatient claims to initiate recovery of the overpayments. 
 
Medicare Made Hundreds of Thousands of Dollars in Overpayments for Chronic Care Management 
Services (A-07-17-05101), November 2019 
 
Physician and outpatient payments made by CMS for chronic care management (CCM) services 
provided during CYs 2015 and 2016 did not always comply with Federal requirements, resulting in 
$640,452 in overpayments associated with 20,165 claims.  For these 20,165 claims, beneficiaries 
were overcharged a total of up to $173,495 in cost sharing.  
 
Further, we identified 37,124 claims totaling $1.2 million in potential overpayments for instances in 
which a CCM service was billed by an outpatient facility, but a corresponding claim was not 
submitted by a physician.  We set aside these potential overpayments for review and determination 
by CMS.  Additionally, for these 37,124 claims, beneficiaries may have been overcharged a total of 
up to $373,726 in cost sharing.  
 
These errors occurred because CMS did not have adequate controls in place, including claim 
system edits, to identify and prevent overpayments. 
 
CMS concurred with our recommendations that it (1) recoup $640,452 from providers and instruct 
providers to refund overcharges totaling up to $173,495 to beneficiaries; (2) review the 37,124 
outpatient claims totaling $1.2 million in potential overpayments to determine whether the 
outpatient facilities met the requirement to bill for CCM services and recoup any overpayments 
from outpatient facilities and instruct the outpatient facilities to refund corresponding overcharges 
to beneficiaries; and (3) implement claim processing controls, including system edits, to prevent 
and detect overpayments for CCM services. 
 
 
17 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
CMS Made an Estimated $93.6 Million in Incorrect Medicare Electronic Health Record Incentive 
Payments to Acute-Care Hospitals, or Less Than 1 Percent of $10.8 Billion in Total Incentive Payments 
(A-09-18-03020), December 2019  
 
CMS did not always make Medicare EHR incentive payments to acute-care hospitals in accordance 
with Federal requirements.  The incorrect net incentive payments occurred because (1) the 
Medicare administrative contractors (MACs) did not review the supporting documentation for all 
hospitals to identify errors in the hospitals cost-report numbers used to calculate the incentive 
payments and (2) CMS did not include labor and delivery services in the incentive payment 
calculations, which resulted in hospitals receiving inflated incentive payments.  Based on our 
sample results, we estimated that CMS made incorrect net incentive payments of $93.6 million, or 
less than 1 percent of the $10.8 billion in total incentive payments for our audit period. 
 
CMS concurred with our recommendations that it (1) recover from acute-care hospitals the portion 
of the $1.3 million in incorrect net incentive payments that are within the reopening period; (2) for 
the remaining portion of the $1.3 million, which is outside of the recovery period, notify the acute-
care hospitals associated with the incorrect payments so that those hospitals can exercise 
reasonable diligence to investigate and return any identified similar incorrect payments; (3) instruct 
the MACs to review all hospitals supporting documentation to identify errors in the hospitals cost-
report numbers; and (4) revise the incentive payment calculations to include labor and delivery 
inpatient bed-days.  
 
Billions in Estimated Medicare Advantage Payments From Chart Reviews Raise Concerns (OEI-03-17-
00470), December 2019 
 
Billions of estimated MA risk-adjusted payments supported solely through chart reviews raise 
potential concerns about the completeness of payment data submitted to CMS, the validity of 
diagnoses on chart reviews, and the quality of care provided to beneficiaries.  Diagnoses that MA 
organizations reported only on chart reviewsand not on any service recordsresulted in an 
estimated $6.7 billion in risk-adjusted payments for 2017.  CMS based an estimated $2.7 billion in 
risk adjusted payments on chart review diagnoses that MA organizations did not link to a specific 
service provided to the beneficiary.  Although limited to a small number of beneficiaries, almost 
half of MA organizations reviewed had payments from unlinked chart reviews where there was not 
a single record of a service being provided to the beneficiary in all of 2016.  CMS concurred with 
our recommendations, which were: 
 
  Provide oversight of MA organizations that had payments resulting from unlinked chart 
reviews for beneficiaries who had no service records in 2016; 
  Conduct audits that validate diagnoses reported on chart reviews in the encounter data; 
and 
  Reassess the risks and benefits of allowing unlinked chart reviews to be used as sources of 
diagnoses for risk adjustment. 
18 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
Quality of Care, Safety, and Access 
Registered Nurses Did Not Always Visit Medicare Beneficiaries Homes at Least Once Every 14 Days 
To Assess the Quality of Care and Services Provided by Hospice Aides (A-09-18-03022),  
November 2019  
 
Registered nurses did not always (1) visit hospice beneficiaries homes at least once every 14 days 
to assess the quality of care and services provided by hospice aides or (2) document the visits in 
accordance with Federal requirements.  Of the approximately 189,000 high-risk date-pairs in our 
sample, we identified (1) an estimated 99,000 instances in which the registered nurses did not make 
the required supervisory visits at least once every 14 days and (2) an estimated 5,000 instances in 
which supervisory visits were not documented in accordance with Federal requirements.  
 
These deficiencies occurred because of hospices lack of oversight, scheduling errors, employee 
turnover, and the registered nurses not being aware of the 14-day supervisory visit requirement.  
As a result, there was no assurance that beneficiaries admitted to those hospices received the 
appropriate care while in hospice care.  
 
CMS concurred with our recommendations (1) that it promote hospices compliance with the 
standard that requires registered nurses to visit hospice beneficiaries homes at least once every 14 
days, which could include working with State survey agencies and accreditation organizations to 
increase emphasis on this requirement, educating hospices about the requirements associated with 
this standard, and making this standard a quality measure and (2) that it take action to ensure that 
all registered nurses supervisory visits of hospice aides are documented in accordance with 
applicable CMS regulations and interpretive guidelines.  
 
Program Integrity 
CMSs Controls Over Assigning Medicare Beneficiary Identifiers and Mailing New Medicare Cards 
Were Generally Effective but Could Be Improved in Some Areas (A-09-19-03003), January 2020  
 
CMSs controls were generally effective in ensuring that (1) beneficiaries were properly assigned 
Medicare Beneficiary Identifiers (MBIs), (2) deceased beneficiaries were not mailed new Medicare 
cards, and (3) payments were not made on behalf of deceased beneficiaries.  However, in a small 
percentage of cases, CMSs controls did not prevent multiple MBIs from being assigned to 
beneficiaries or prevent mailing of new Medicare cards to deceased beneficiaries.  In addition, CMS 
made improper payments of $2.3 million on claims for deceased beneficiaries. 
 
Specifically, we found that CMS assigned to 22,662 beneficiaries 2 or more MBIs associated with 
multiple enrollment records that contained the same SSN and date of birth.  In addition, CMS 
mailed 58,420 new Medicare cards after the beneficiaries dates of death.  Finally, CMS made 
19 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
improper payments for claims with dates of service after the beneficiaries dates of death.  By 
improving its controls, CMS can limit unintended consequences, such as claim processing errors 
and inappropriate release of personally identifiable information. 
 
CMS concurred with our recommendations that it (1) improve its system controls by checking the 
Medicare Enrollment Databases date-of-death information as close as reasonably possible to the 
date that card mailing data are sent to the print/mail contractor to ensure that Medicare cards are 
not mailed to deceased beneficiaries and (2) instruct the Medicare contractors to review incorrectly 
collected deductible amounts that may have been for claims with dates of service after the 
beneficiaries dates of death and initiate recoupment for amounts identified as improper payments.  
 
Medicare Market Shares of Diabetes Test Strips From April Through June 2019 (OEI-04-19-00481), 
January 2020  
Non mail-order claims composed 85 percent of the total Medicare market for diabetes test strips 
(DTS) during the time period we reviewed.  The suppliers in our sample provided 25 types of DTS 
to Medicare beneficiaries via non-mail order and 21 types of DTS via mail order.  The suppliers in 
our samples provided eight types of DTS to Medicare beneficiaries both via non-mail order and 
mail order.  The Medicare Improvements for Patients and Providers Act of 2008 prohibits CMS 
from awarding contracts in the National Mail-Order Program to a supplier of DTS if the suppliers 
bid does not cover at least 50 percent, by volume, of all types of DTS provided to Medicare 
beneficiaries.  OIGs analysis assists CMS in determining whether bidding suppliers meet this 50-
percent rule. 
 
This report contains no recommendations. 
 
The Majority of Providers Reviewed Used Medicare Part D Eligibility Verification Transactions for 
Potentially Inappropriate Purposes (A-05-17-00020), February 2020  
 
The majority of providers reviewed (25 of 30) used Medicare Part D eligibility verification 
transactions (E1 transactions) for some purpose other than to bill for a prescription or determine 
drug coverage billing order.  On average, 98 percent of these 25 providers E1 transactions were 
not associated with a prescription.  We did not contact 10 providers because they were closed, 
under investigation, or both.  Fifteen providers submitted or hired other entities to submit E1 
transactions for inappropriate purposes, which involved using a beneficiarys protected health 
information.  
 
After our audit period, CMS took additional steps to monitor use of the eligibility verification 
system and take appropriate enforcement action when abuse is identified. 
 
The deficiencies we identified occurred because CMS had not yet (1) fully implemented controls to 
monitor providers submitting a high number of E1 transactions relative to prescriptions processed 
20 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
until after our audit period, (2) published clear guidance that E1 transactions are not to be used for 
marketing purposes, and (3) limited nonpharmacy access. 
 
CMS concurred with our recommendations that it (1) continue to monitor providers submitting a 
high number of E1 transactions relative to prescriptions processed, (2) issue guidance that clearly 
states that E1 transactions should not be used for marketing purposes, (3) ensure that only 
pharmacies and other authorized entities submit E1 transactions, and (4) take appropriate 
enforcement action when abuse is identified. 
 
Key Medicare Tools To Safeguard Against Pharmacy Fraud and Inappropriate Billing Do Not Apply to 
Part D (OEI-02-15-00440), March 2020 
Part D does not have three key tools to protect against pharmacy fraud that are available in other 
parts of Medicare: pharmacy enrollment, revocation, and preclusion.  These three tools apply to 
pharmacies only when they bill Parts B or C, not when they bill Part D.  We continue to recommend 
that CMS require pharmacies that bill Part D to enroll in the Medicare program.  This was an 
integral part of a previous recommendation that CMS has yet to implement.  CMS concurred with 
all three of our new recommendations, which were: 
 
  Allow revocation of Medicare enrollment for inappropriate billing of Part D; 
  Include on the Preclusion List pharmacies that inappropriately bill Part D; and  
  Apply the Preclusion List payment prohibitions to pharmacies and other providers that 
dispense Part D drugs. 
Drug Pricing and Reimbursement 
Medicare Improperly Paid Suppliers an Estimated $92.5 Million for Inhalation Drugs (A-09-18-03018), 
October 2019  
   
Not all suppliers complied with Medicare requirements when billing for inhalation drugs.  For 81 of 
the 120 sampled claim lines, suppliers complied with the requirements; however, for the remaining 
39 claim lines, 22 suppliers did not comply with documentation requirements.  We found the 
following documentation-related deficiencies: incomplete, invalid, or missing detailed written 
orders (28 claim lines); incomplete proof of delivery (6 claim lines); incomplete refill requests (6 
claim lines); and medical records not provided (1 claim line).  (The total exceeds 39 because 2 claim 
lines had 2 deficiencies,) 
 
Based on our sample results, we estimated that approximately $92.5 million paid to suppliers for 
inhalation drugs was unallowable for Medicare reimbursement.  Medicare contractor oversight was 
not sufficient to ensure that suppliers complied with documentation requirements.  
 
CMS concurred with our recommendations that it (1) instruct the Medicare contractors to recover 
$36,825 in overpayments for the 39 unallowable claim lines and notify the 22 suppliers associated 
21 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
with those 39 claim lines so that those suppliers can exercise reasonable diligence to investigate 
and return any identified overpayments; (2) work with the durable medical equipment MACs to 
expand their review of suppliers claims to include additional inhalation drugs; (3) provide 
additional training to suppliers on Medicare documentation requirements for inhalation drugs; and 
(4) identify suppliers that consistently bill for inhalation drugs that do not comply with Medicare 
documentation requirements, perform reviews of those suppliers, collect the amount overpaid for 
unallowable claims, and educate them on Medicare requirements for inhalation drugs.  
 
CMSs Implementation of a 2014 Policy Change Resulted in Improvements in the Reporting of 
Coverage Gap Discounts Under Medicare Part D (A-07-16-06067), January 2020  
 
The Coverage Gap Discount Program made manufacturer discounts equal to 50 percent of the 
negotiated price of applicable, covered Part D drugs available to Medicare Part D beneficiaries 
during CYs 2011 through 2018.  Although CMS generally ensured that Part D sponsors accurately 
reported Coverage Gap discounts, we identified instances in which sponsors should have reported 
these discounts but did not.  Specifically, for CYs 2013 and 2014, we identified $1.1 million in 
Coverage Gap discounts that should have been invoiced to manufacturers but were not because 
the discounts were not reflected in the prescription drug event (PDE) records submitted by 
sponsors.  
 
These discrepancies occurred because CMS did not always have the sponsor information it needed.  
For that reason, CMS was not always able to accurately, and in a timely manner, identify 
beneficiaries who were in the Coverage Gap.  Effective January 1, 2014, a policy change enabled 
CMS to more easily identify PDEs that should have reflected Coverage Gap discounts.  After 
implementation of the policy change, Employer Group Waiver Plans more accurately reported 
Coverage Gap discounts.  
 
CMS concurred with our recommendations that it (1) verify that Part D sponsors adjusted PDE 
records for $658,396 in validated Coverage Gap discounts and, of this amount, instruct the 
sponsors to remit $363,287 to the beneficiaries and (2) research the remaining records for which 
we estimated missed Coverage Gap discounts totaling $406,755 and instruct Part D sponsors to 
validate and adjust PDE records accordingly and remit applicable amounts to the beneficiaries. 
 
Medicaid Program Reports and Reviews 
Financial Management and Improper Payments 
Texas Did Not Ensure That Its Managed-Care Organizations Complied With Requirements 
Prohibiting Medicaid Payments for Services Related to Provider-Preventable Conditions                  
(A-06-16-01001), October 2019  
 
22 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Texas did not ensure that its Medicaid managed-care organizations (MCOs) complied with Federal 
and State requirements prohibiting payments to providers for inpatient hospital services related to 
treating certain provider-preventable conditions (PPCs).  For our audit period, we identified 
Medicaid claims totaling $29.4 million that contained PPCs for five MCOs.  Of this amount, we 
determined that claims totaling $12.7 million were in compliance with Federal and State regulations 
regarding nonpayment of PPCs.  However, claims totaling $16.7 million were not in compliance. 
 
Texass internal controls were not adequate to ensure that its MCOs complied with Federal and 
State requirements.  Specifically, Texas (1) did not have policies and procedures to determine 
whether its MCOs complied with Federal and State requirements and provisions of the managed-
care contract relating to the nonpayment of PPCs and (2) did not ensure that the MCOs payment 
rates were based only on services that were covered in the State plan.  
 
Texas generally agreed with our recommendations that it (1) work with the five MCOs to determine 
what portion of the $16.7 million is unallowable for Federal Medicaid reimbursement, (2) prohibit 
payments for inpatient hospital services related to treating PPCs, (3) review all claims for inpatient 
hospital services that were paid after our audit period, (4) strengthen its monitoring of its MCOs, 
(5) ensure that all MCOs implement edits to appropriately reduce or deny claims for other PPCs,  
(6) consider allowing liquidated damages to be imposed on the five MCOs, and (7) allow itself to 
recoup funds from all MCOs when contract provisions and Federal and State requirements are not 
met.  
 
New Jersey Improperly Claimed Tens of Millions for Medicaid School-Based Administrative Costs 
Based on Random Moment Sampling That Did Not Meet Federal Requirements (A-02-17-01006), 
November 2019  
 
The random moment sampling methodology New Jersey used to claim Medicaid school-based 
administrative costs did not meet Federal requirements.  Specifically, it did not comply with 
statistical sampling requirements and was not adequately supported.  Also, the methodology did 
not comply with New Jerseys approved cost allocation plan.  In addition, New Jerseys coding of 
what school employees were doing during random moments was mostly incorrect or unsupported.  
 
The random moment sampling methodology New Jersey used did not comply with Federal 
requirements because New Jersey disregarded CMS guidance and assurances it made to CMS.  
Therefore, we determined that New Jersey claimed $63.8 million in unallowable Federal Medicaid 
reimbursement.  
 
New Jersey disagreed with our findings but did not indicate concurrence or nonconcurrence with 
our recommendations that it refund $63.8 million in Federal Medicaid payments and revise its 
random moment sampling methodology to comply with Federal requirements, its implementation 
plan, CMS guidance, and assurances it made to CMS.   
 
23 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
More Than One-Third of New Jerseys Federal Medicaid Reimbursement for Providing Community-
Based Treatment Services Was Unallowable (A-02-17-01020), January 2020  
 
Of New Jerseys 100 sampled claims for Federal Medicaid reimbursement of payments for 
Programs of Assertive Community Treatment (PACT) services, 50 complied with Federal and State 
requirements, but 50 did not.  Of the 100 claims, 21 contained more than 1 deficiency.  We also 
identified potential quality-of-care issues related to PACT services.  Specifically, PACT team 
psychiatrists associated with 33 of our sample claims did not provide the minimum amount of face-
to-face psychiatric time required for their caseload.  Also, despite defining the PACT program as 
rehabilitative, New Jersey did not require periodic reauthorizations or reevaluations of beneficiaries 
program eligibility. 
 
The deficiencies occurred because New Jersey did not inform PACT providers of all Federal and 
State requirements for providing PACT services and did not adequately monitor or have 
procedures in place to ensure that providers claimed PACT services in accordance with these 
requirements.  
 
Based on our sample results, we estimated that New Jersey improperly claimed at least 
$14.9 million in Federal Medicaid reimbursement. 
 
New Jersey disagreed with our recommendation that it (1) refund $14.9 million to the Federal 
Government, agreed to (2) reinforce program guidance to PACT providers, partly agreed to         
(3) improve its monitoring of the PACT program, and disagreed with our recommendation that it 
(4) consider developing regulations for periodic reassessments to determine whether beneficiaries 
continue to require PACT services.   
 
New York Claimed Tens of Millions of Dollars for Opioid Treatment Program Services That Did Not 
Comply With Medicaid Requirements Intended To Ensure the Quality of Care Provided to 
Beneficiaries (A-02-17-01021), February 2020  
 
New York claimed Federal Medicaid reimbursement for OTP services that did not comply with 
Federal and State requirements.  Of the 150 claims in our random sample, 115 claims complied with 
Medicaid requirements, but 35 claims did not.  In addition, of the 598 claims in our nonstatistical 
sample, 299 claims were billed in error.  Based on our sample results, we estimated that New York 
improperly claimed at least $39.3 million in Federal Medicaid reimbursement for OTP services 
during our audit period.  
 
These improper claims occurred because providers (1) failed to maintain or provide documentation 
of OTP services, (2) did not ensure that OTP services were provided in accordance with 
beneficiaries treatment plans, and (3) did not maintain signatures for OTP services.  Further, 
although New York inspects providers to verify compliance with Federal and State Medicaid 
requirements, it did not ensure that its oversight prevented the errors identified by our audit. 
24 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
New York did not indicate concurrence or nonconcurrence with our recommendations that it       
(1) refund $39.3 million to the Federal Government, (2) ensure that providers comply with Federal 
and State requirements for providing and claiming reimbursement for OTP services, and              
(3) implement procedures to detect and prevent duplicate claims for OTP services. 
 
Michigan Made Capitation Payments to Managed Care Entities After Beneficiaries Deaths              
(A-05-17-00048), February 2020  
 
We estimated that Michigan made unallowable capitation payments totaling at least $39.9 million 
($27.5 million Federal share) to managed care entities on behalf of deceased beneficiaries during 
our audit period.  Of the 100 capitation payments in our stratified random sample, Michigan made 
99 unallowable payments totaling $117,746 ($79,348 Federal share).  
 
The unallowable payments occurred because Michigan did not always identify and process 
Medicaid beneficiaries death information.  Although Michigans Medicaid Management 
Information System (MMIS) and eligibility systems interfaced with State and Federal death files that 
identify dates of death, Michigan did not always identify those dates of death in its MMIS system, 
and the MMIS system and eligibility system did not share dates of death information with each 
other.  Michigan also did not recover payments caused by dates of death not promptly identified in 
its MMIS system. 
 
Michigan did not say whether it agreed or disagreed with our recommendations that it (1) refund 
$27.5 million to the Federal Government; (2) identify and recover unallowable payments made to 
managed care entities during our audit period on behalf of deceased beneficiaries, which we 
estimated to be at least $39.9 million; (3) identify capitation payments made on behalf of deceased 
beneficiaries before and after our audit period and repay the Federal share of amounts recovered; 
(4) strengthen its policies and procedures for identifying deceased beneficiaries to ensure that 
dates of death are recorded accurately and in a timely manner; and (5) ensure that capitation 
payments are recovered when a date of death is retroactively entered.  
 
New York Made Unallowable Payments Totaling More Than $10 Million for Managed Care 
Beneficiaries Assigned Multiple Medicaid Identification Numbers (A-02-18-01020), February 2020  
 
New York improperly claimed Federal Medicaid reimbursement for Medicaid beneficiaries who 
were assigned more than one Medicaid identification (ID) number. Specifically, for 102 of the 103 
beneficiary-matches in our sample, New York made managed care payments to different managed 
care organizations for the same beneficiary for the same month under different Medicaid ID 
numbers.  
 
These errors occurred because (1) New Yorks procedures for identifying whether a Medicaid 
applicant had already been assigned a Medicaid ID number were not always followed, (2) system 
25 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
queries were not adequate to ensure that all individuals with existing Medicaid ID numbers were 
identified, and (3) staff did not use all available resources to ensure that qualified applicants were 
not issued multiple Medicaid ID numbers. 
 
Based on our sample results, we estimated that New York improperly claimed $11.5 million in 
Federal Medicaid reimbursement for payments made on behalf of beneficiaries assigned more 
than one Medicaid ID number.  We reduced this estimate to $11.3 million because New York 
recovered some managed care payments after the start of our audit. 
 
New York did not specifically indicate concurrence or nonconcurrence with our recommendations 
that it (1) refund $11.3 million to the Federal Government, (2) identify and recover improper 
managed care payments made to different MCOs on behalf of beneficiaries with multiple Medicaid 
ID numbers and repay the Federal share of the amounts recovered, and (3) strengthen its 
procedures for determining whether an individual applying for Medicaid already has a Medicaid ID 
number. 
 
CMS Could Take Actions To Help States Comply With Federal Requirements Prohibiting Medicaid 
Payments for Inpatient Hospital Services Related to Provider-Preventable Conditions                      
(A-09-18-02004), March 2020  
In 2011, CMS issued Federal regulations prohibiting Federal Medicaid payments for services related 
to PPCs.  The goal of the regulations is to improve quality of care by prohibiting payments for 
medical errors.  Prior OIG audits of nine States found that none of them fully complied with Federal 
requirements.This audit found thatCMS could take actions to (1) verify that all State plans fully 
    
comply with Federal requirements prohibiting Medicaid payments for inpatient hospital services 
related to treating PPCs and (2) issue clarifying guidance to address specific areas in which States 
did not comply with those requirements.  If CMS does not verify that State plans fully comply with 
Federal requirements and provide clear guidance on these requirements, States may continue to 
struggle to prevent unallowable payments for PPCs and may not take measures to improve the 
quality of inpatient hospital services through the prevention of medical errors. 
CMS concurred with our recommendations that it verify that all State plans comply with Federal 
requirements prohibiting payments for PPCs, issue a revised State plan preprint that contains all of 
the provisions identified in Federal requirements, issue clarifying guidance to States to help ensure 
that they identify and process claims containing PPCs correctly, understand how and when to apply 
the reasonably isolate language in Federal regulations, make the necessary corrections to the     
FY 2016 Medicare hospital-acquired conditions list, and work with States to ensure that their 
systems and processes for identifying PPCs use all diagnosis codes reported by inpatient hospitals.  
 
26 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Quality of Care, Safety, and Access 
Pennsylvania Did Not Fully Comply With Federal and State Requirements for Reporting and 
Monitoring Critical Incidents Involving Medicaid Beneficiaries With Developmental Disabilities        
(A-03-17-00202), January 2020  
Iowa Did Not Comply With Federal and State Requirements for Major Incidents Involving Medicaid 
Members With Developmental Disabilities (A-07-18-06081), March 2020  
Pennsylvania and Iowa did not fully comply with Federal Medicaid waiver and State requirements 
for reporting and monitoring incidents involving Medicaid beneficiaries with developmental 
disabilities who resided in community-based settings.  Specifically, Pennsylvania did not (1) ensure 
that community-based providers reported thousands of 24-hour reportable incidents within 
required timeframes, (2) ensure that community-based providers and county and regional 
investigators analyzed and investigated all beneficiary deaths, and (3) ensure that community-
based providers referred all suspicious deaths to law enforcement.  
Iowa did not (1) ensure that community-based providers reported all major incidents to the State, 
(2) ensure that community-based providers documented the resolution of reported major incidents 
to prevent or diminish the probability of future occurrences, (3) review Critical Incident Reports to 
determine trends, problems, and issues in service delivery, (4) ensure that community-based 
providers report all member deaths to the State, and (5) report all known major incidents to CMS. 
Pennsylvania concurred with six of our recommendations that it improve its controls regarding the 
reporting and monitoring of 24-hour reportable incidents involving Medicaid beneficiaries with 
developmental disabilities residing in community-based settings.  Pennsylvania did not concur with 
our recommendation that it record the 24-hour reportable incidents noted in our report.  
Iowa concurred with our recommendations that it train community-based providers on how to 
identify, report, and appropriately document the resolution of all major incidents; perform trend 
analysis that identifies patterns and trends to assess the health and safety of members and 
determine whether changes or staff training are needed to prevent recurrences of major incidents 
and to reduce the number or severity of incidents; ensure that community-based providers report 
to Iowa all member deaths; include all major incidents reported by MCOs in Iowas reports to CMS; 
and develop and implement internal controls adequate to ensure full compliance with Federal and 
State requirements.  
 
New Yorks Oversight of Medicaid Managed Care Organizations Did Not Ensure Providers Complied 
With Health and Safety Requirements at 18 of 20 Adult Day Care Facilities Reviewed (A-02-18-01027), 
March 2020  
New Yorks oversight of Medicaid MCOs did not ensure that 18 of the 20 adult day care services 
providers we audited complied with Federal and State health and safety requirements.  Specifically, 
27 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
we found 476 instances of noncompliance with requirements for staff training, physical 
environment and safety, emergency preparedness, and staff health status.  
The instances of noncompliance occurred because the MCOs did not adequately monitor their 
contracted providers to ensure compliance with health and safety requirements.  Specifically, we 
found that the survey tools and procedures used during the MCOs required annual site visits to 
providers were not adequate.  Further, New Yorks oversight of the MCOs did not include 
obtaining or reviewing the results of the site visits, which would be necessary to verify the MCOs 
compliance with health and safety requirements.  
These deficiencies could have significantly impacted the health and safety of vulnerable Medicaid 
beneficiaries. 
New York did not indicate concurrence or nonconcurrence with our recommendations that it       
(1) ensure that the MCOs work with their contracted adult day care services providers to correct the 
476 instances of noncompliance with health and safety requirements that we identified, (2) require 
MCOs to improve their site visit procedures to ensure compliance with health and safety 
requirements detailed in New Yorks CMS-approved MCO contract and New Yorks regulations on 
adult day care programs, and (3) obtain and review the results of MCO site visits at adult day care 
facilities as part of its beneficiary health and safety monitoring activities.  
Program Integrity 
Most of the Non-Newly Eligible Beneficiaries for Whom Colorado Made Medicaid Payments Met 
Federal and State Requirements, but Documentation Supporting That All Eligibility Requirements 
Were Verified Properly Was Not Always in Place (A-07-18-02812), March 2020 
 
Most of the Medicaid payments that Colorado made during our audit period were on behalf of 
non-newly eligible beneficiaries who met Federal and State eligibility requirements.  However, 
Colorado made Medicaid payments on behalf of some non-newly eligible beneficiaries who may 
not have met Federal and State eligibility requirements.  Colorado correctly determined eligibility 
and, therefore, correctly claimed Federal Medicaid reimbursement, on behalf of 135 of the 140 
beneficiaries in our statistical sample.  For the remaining five beneficiaries, Colorado had no 
documentation (specifically, that it had performed annual verifications of resources) to support that 
all eligibility requirements were verified properly during redeterminations as required by Federal 
and State regulations and by Colorados State Medicaid plan.  Although Colorado had policies and 
procedures in place, it did not always follow them to ensure that redeterminations were properly 
documented. 
 
On the basis of our sample results, we estimated that Colorado made Medicaid payments of at 
least $46.7 million ($23.8 million Federal share) on behalf of at least 3,603 potentially ineligible 
beneficiaries. 
28 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
Colorado agreed with our recommendations that it redetermine, as appropriate, the current 
Medicaid eligibility of the potentially ineligible sampled beneficiaries and ensure that (1) all 
eligibility requirements, including those pertaining to resources, are properly verified during annual 
redeterminations for all non-newly eligible beneficiaries and (2) information is maintained to 
support that eligibility determinations were performed in accordance with Federal and State 
requirements. 
 
States Could Do More To Prevent Terminated Providers From Serving Medicaid Beneficiaries (OEI-03-
19-00070), March 2020 
 
Nearly 1,000 terminated providersor 11 percent of all terminated providerswere inappropriately 
enrolled in State Medicaid programs or were associated with $50.3 million in Medicaid payments.  
Despite legislative requirements in the 21st Century Cures Act designed to strengthen Medicaid 
program integrity, terminated providers continue to serve Medicaid beneficiaries.  Some of these 
providers were terminated for criminal convictions, licensure issues, and provider misconduct, 
representing a risk to beneficiaries safety and their quality of care.  In addition, only eight States 
managed care contracts all clearly included the provisionrequired by the Cures Actthat 
prohibits terminated providers from participating in Medicaid managed care networks.  This 
vulnerability may allow terminated providers to serve Medicaid beneficiaries and reduce States 
ability to limit these providers participation in Medicaid managed care networks.   
 
CMS concurred with all six of our recommendations, which were: 
  Recover from States the Federal share of inappropriate fee-for-service Medicaid payments 
associated with terminated providers, 
  Implement a method to recover from States the Federal share of inappropriate managed 
care capitation payments associated with terminated providers,  
  Follow up with States to remove terminated providers that OIG identified as inappropriately 
enrolled in Medicaid, 
  Confirm that States do not continue to have terminated providers enrolled in their 
Medicaid programs, 
  Safeguard Medicaid from inappropriate payments associated with terminated providers, 
and  
  Review States contracts with Medicaid managed care organizations to ensure that they 
clearly and specifically include the required provision that prohibits terminated providers 
from participating in Medicaid managed care networks.  
 
Twenty-Three States Reported Allowing Unenrolled Providers To Serve Medicaid Beneficiaries (OEI-
05-19-00060), March 2020 
29 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
We found that 23 States had not enrolled all Medicaid providers.  Of the 27 States that reported 
enrolling all providers, 16 reported lacking enrollment processes or enforcement controls to ensure 
ongoing compliance with Federal provider enrollment requirements.  When States do not enroll 
and screen providers, Medicaid beneficiaries are exposed to potentially harmful providers.    
 
CMS concurred with our recommendations, which were:   
  Take steps to disallow Federal reimbursements to States for expenditures associated with 
unenrolled MCO network providers, including seeking necessary legislative authority; 
  Work with States to ensure that unenrolled MCO network providers do not participate in 
Medicaid managed care and assist States in establishing ways to do so; 
  Work with States to ensure that they have the controls required to prevent unenrolled 
ordering, referring, or prescribing providers from participating in Medicaid fee-for-service; 
and 
  Work with States to ensure that they are complying with requirements to collect identifying 
and ownership information on Medicaid provider enrollment forms.   
 
Drug Pricing and Reimbursement 
New York Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-Administered 
Drugs (A-02-18-01011), February 2020  
 
New York did not always comply with Federal Medicaid requirements for invoicing manufacturers 
for rebates for physician-administered drugs.  Specifically, New York did not invoice manufacturers 
for rebates associated with $3.3 million (Federal share) in single-source and top-20 multiple-source 
physician-administered drugs.  Although New Yorks policies and procedures require the collection 
of utilization data necessary to invoice for rebates on all claims, its internal controls did not always 
ensure that the data were used to invoice manufacturers to secure rebates.  
 
Further, New York did not submit the drug utilization data necessary to secure rebates for claims 
associated with all other physician-administered drugs.  These drugs were included in claims 
totaling $2.3 million (Federal share) that did not have drug codes and in claims totaling $714,777 
(Federal share) that contained drug codes. 
 
New York generally agreed with our recommendations that it (1) refund to the Federal Government 
$3.3 million for single-source and top-20 multiple-source physician-administered drugs, (2) work 
with CMS to determine the unallowable portion of the $3 million for other drug claims in question, 
and (3) strengthen its internal controls to ensure that all physician-administered drugs eligible for 
rebates are invoiced.  
 
30 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Centers for Medicare & Medicaid Services  
The Centers for Medicare & Medicaid Services Could Improve Its Processes for Evaluating and 
Reporting Payment Recovery Savings Associated With the Fraud Prevention System (A-01-15-00510), 
October 2019 
 
The Fraud Prevention Systems (FPSs) adjusted savings for overpayment determinations and law 
enforcement referrals were approximately 10 percent of the identified savings for its second and 
third implementation years because (1) the MACs opportunities to collect FPS-identified 
overpayments were often limited by both the time it took to get referrals from the Zone Program 
Integrity Contractors and Program Safeguard Contractors (Contractors) and by unique challenges 
in attempting to recover overpayments from providers and (2) CMS has not established a standard 
process for the Program Integrity Contractors to estimate the value of law enforcement referrals. 
 
CMSs reported FPS savings and return on investment (ROI) after the third implementation year 
gave stakeholders an incomplete picture of the FPSs value because CMS has continued to rely 
primarily on identified savings for its reporting.  Historically, the overwhelming majority of the 
identified savings from payment recovery administrative actions have not been recovered. 
Reporting adjusted savings and the corresponding adjusted ROI in addition to identified savings 
would provide a more complete picture of the value of the FPS. 
 
CMS concurred with our recommendations that it (1) continue to work with the Contractors and the 
MACs to develop strategies that improve timely coordination to give the MACs a better 
opportunity to recover overpayments, (2) establish a uniform methodology for the Contractors to 
use when reporting estimates for the value of law enforcement referrals, and (3) update the FPSs 
law enforcement referral adjustment factor. 
 
Hospitals Received Millions in Excessive Outlier Payments Because CMS Limits the Reconciliation 
Process (A-05-16-00060), November 2019  
 
From FYs 2011 through 2014, CMS paid 60 hospitals that had received $3.5 billion in outlier 
payments a net of $502 million more than the hospitals would have been paid if their outlier 
payments had been reconciled.  (We refer to this net amount as excessive outlier payments.)  CMS 
did not detect or recover these excessive outlier payments because the 236 associated cost reports 
did not meet the 10-percentage-point threshold for reconciliation.  
 
The cost reports did not meet CMSs 10-percentage-point threshold because when hospitals 
increased their charges at a rate higher than that of cost increases, this usually resulted in only a 
small percentage-point change in their cost-to-charge ratios.  CMS set the 10-percentage-point 
threshold because it believed that the threshold would appropriately capture those hospitals 
whose outlier payments would be substantially inaccurate when the hospital uses the ratio from 
the contemporaneous cost-reporting period.  Based on the estimated time and costs that we 
31 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
received from 7 MACs, we estimate that the administrative burden on the MACs to reconcile the 
236 cost reports that did not meet the 10-percentage-point threshold would be a minimum of 
$11,800 and a maximum of $425,000 per year.  
 
CMS concurred with our recommendation that it require reconciliation of all hospital cost reports 
with outlier payments during a cost-reporting period.  If this had been in effect for the 60 hospitals 
in our review, CMS would have saved approximately $125 million per year.  
 
The Centers for Medicare & Medicaid Services Did Not Identify and Report Potential Antideficiency 
Act Violations for 12 Contracts Used To Establish the Federal Marketplace Under the Affordable Care 
Act (A-03-16-03001), February 2020  
 
CMS correctly obligated and expended funds for 62 of the 74 Federal marketplace contracts we 
reviewed.  For the remaining 12 contracts, CMS did not obligate and expend funds in compliance 
with applicable laws and requirements.  
 
These errors resulted in potential, unreported Antideficiency Act obligation violations totaling 
$164.6 million ($155.9 million related to the Federal marketplace) and expenditure violations 
totaling $22.4 million ($18.3 million related to the Federal marketplace).  In addition, for three 
contracts, CMS failed to record obligations totaling $2.9 million in a timely manner.  Failure to 
record obligations in a timely manner can result in Antideficiency Act violations. 
 
CMS did not specifically concur with our recommendations that it (1) correct the bona fide needs 
obligation violations totaling $164.6 million ($155.9 million related to the Federal marketplace) and, 
if CMS is unable to correct those violations, report the Antideficiency Act violations; (2) correct the 
bona fide needs expenditure violations totaling $22.4 million ($18.3 million related to the Federal 
marketplace) and, if CMS is unable to correct those violations, report the Antideficiency Act 
violations; (3) coordinate with HHS, in consultation with the Office of the General Counsel, to 
develop guidance and train Office of Financial Management personnel on the correct process to 
record obligations and expenditures to avoid potential Antideficiency Act violations; and              
(4) develop automated controls in the Healthcare Integrated General Ledger Accounting System to 
ensure that contract expenditures for each program year are paid using appropriate program-year 
obligations. 
 
California Should Improve Its Oversight of Selected Nursing Homes Compliance With Federal 
Requirements for Life Safety and Emergency Preparedness (A-09-18-02009), November 2019  
Life Safety and Emergency Preparedness Deficiencies Found at 18 of 20 Texas Nursing Homes         
(A-06-19-08001), February 2020 
32 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Florida Should Improve Its Oversight of Selected Nursing Homes Compliance With Federal 
Requirements for Life Safety and Emergency Preparedness (A-04-18-08065), March 2020  
Missouri Should Improve Its Oversight of Selected Nursing Homes Compliance With Federal 
Requirements for Life Safety and Emergency Preparedness (A-07-18-03230), March 2020 
We reviewed selected nursing homes in California, Texas, Florida, and Missouri that received 
Medicare funds, Medicaid funds, or both, to determine whether the nursing homes complied with 
Federal requirements for life safety and emergency preparedness. 
During our site visits in California, we identified deficiencies at all 19 nursing homes that we 
audited.  Specifically, we found 137 instances of noncompliance with life safety requirements and 
188 instances of noncompliance with emergency preparedness requirements.  In Texas, we 
identified deficiencies at 18 of the 20 nursing homes that we audited.  Specifically, we found 235 
instances of noncompliance with life safety requirements and 55 instances of noncompliance with 
emergency preparedness requirements.  In Florida, we identified deficiencies at all 20 nursing 
homes that we reviewed.  Specifically, we found 100 instances of noncompliance with life safety 
requirements and 87 instances of noncompliance with emergency preparedness requirements.  In 
Missouri, we identified deficiencies at all 20 nursing homes that we audited.  Specifically, we found 
178 areas of noncompliance with life safety requirements and 149 areas of noncompliance with 
emergency preparedness requirements. 
The identified deficiencies occurred because nursing homes lacked adequate management 
oversight and had high staff turnover.  In addition, California did not adequately follow up on 
deficiencies previously cited, ensure that surveyors were consistently enforcing CMS requirements, 
or have a standard life safety training program for all nursing home staff.  Texas indicated that 
building maintenance is challenging because of the advanced age of some buildings.  Florida did 
not have a standard life safety training program for all nursing home staff and generally performed 
life safety surveys no more frequently than once every 12 to 15 months.  Missouri did not 
adequately follow up on deficiencies previously cited. 
California partly agreed with our recommendations that it follow up with the 19 nursing homes to 
ensure that corrective actions have been taken regarding the deficiencies we identified and ensure 
that all surveyors consistently enforce CMS requirements.  Texas agreed with our recommendation 
that it follow up with the 18 nursing homes to verify that corrective actions have been taken 
regarding the life safety and emergency preparedness deficiencies we identified.  Florida partly 
agreed with our recommendations that it follow up with the 20 nursing homes to ensure that 
corrective actions have been taken regarding the deficiencies we identified, work with CMS on 
developing life safety training for nursing home staff, and conduct more frequent surveys at 
nursing homes with a history of multiple high-risk deficiencies and follow up to ensure that 
corrective actions have been taken.  Missouri generally disagreed with our recommendations that it 
follow up with the 20 nursing homes to ensure that corrective actions have been taken, develop 
standardized life safety training for nursing home staff, conduct more frequent surveys and 
33 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
followup at nursing homes with a history of multiple high-risk deficiencies, and update facility-
specific plans. 
The Federal Marketplace Properly Determined Individuals Eligibility for Enrollment in Qualified 
Health Plans but Improperly Determined That an Estimated 3 Percent of Individuals Were Eligible for 
Insurance Affordability Programs (A-09-18-01000), February 2020  
 
For our sample of 110 of 7.5 million individuals, the Federal marketplace properly determined that 
all 110 individuals were eligible for enrollment in qualified health plans and that 102 individuals were 
eligible for insurance affordability programs.  However, for the remaining eight individuals, the 
marketplace improperly determined that three individuals were eligible and may have improperly 
determined that five individuals were eligible. 
 
On the basis of our sample results, for the 2018 coverage year, we estimated that the Federal 
marketplace (1) improperly determined that 191,896 (3 percent) of the 7.5 million individuals were 
eligible for insurance affordability programs and (2) may have improperly determined that 402,207 
individuals (5 percent) of the 7.5 million were eligible for those programs.  We also identified a 
weakness in the Federal marketplaces procedures related to determining eligibility for insurance 
affordability programs.  
 
CMS agreed with our recommendations that it ensure the Federal marketplace (1) corrects errors in 
its eligibility and enrollment system, (2) establishes guidance to exclude income from other gains 
on an individuals Federal tax return, and (3) performs subsequent verifications for an individual 
who failed to file taxes on time.  CMS disagreed with our recommendations that it (1) redetermine 
the eligibility of the eight sampled individuals who may not have been eligible, (2) ensure that the 
Federal marketplace revises its written guidance so that it does not extend an individuals 
inconsistency period, and (3) require an individual to submit supporting documentation when he or 
she attests to having filed a tax return to reconcile a previous years premium tax credit payments. 
 
   
34 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Legal and Investigative Activities Related to 
Medicare and Medicaid  
OIG investigates allegations of fraud, waste, and abuse in all HHS programs.  Our largest body of work 
involves investigating matters related to the Medicare and Medicaid programs, such as patient harm; 
billing for services not rendered, medically unnecessary services, or upcoded services (i.e., services billed 
for at a level higher than warranted); illegal billing, sale, and diversion of prescription drugs; the marketing 
of off-label uses for prescription drugs; and solicitation and receipt of kickbacks, including illegal payments 
to patients for involvement in fraud schemes and illegal referral arrangements between physicians and 
medical companies. 
 
OIG also conducts investigations regarding organized criminal activity, including medical identity theft and 
fraudulent medical schemes established for the sole purpose of stealing Medicare dollars.  Investigators 
are opening an increasing number of cases against health care providers who engage in these health care 
fraud schemes.  Those who participate in the schemes may face heavy fines, jail time, and exclusion from 
participation in Federal health care programs. 
 
One of the most common types of fraud perpetrated against Medicare, Medicaid, and other Federal health 
care programs involves filing false claims for reimbursement.  False claims may be pursued under Federal 
and State criminal statutes and, when appropriate, under the False Claims Act.  Depending on the types of 
fraud or other violations involved, OIG investigations may culminate in criminal or civil court judgments 
and decisions, administrative sanctions and decisions, and/or negotiated settlement agreements.  
Investigative outcomes take many forms, including incarceration, restitution, fines, penalties, forfeitures, 
assessments, and exclusion of individuals or entities from participation in all Federal health care programs.  
Frequently used exclusion and penalty authorities are described on our website at 
http://oig.hhs.gov/fraud/enforcement/cmp/. 
 
During this semiannual reporting period, we reported 412 criminal and 367 civil actions against individuals 
or entities that engaged in offenses related to health care.  We also reported over $1.3 billion in 
investigative receivables due to HHS and more than $191.2 million in non-HHS investigative receivables, 
including civil and administrative settlements or civil judgments related to Medicare, Medicaid, and other 
Federal, State, and private health care programs.   
 
Criminal and Civil Enforcement Activities Related to Medicare and Medicaid 
The following recently completed actions and settlements are organized by the type of provider or entity 
involved.  Additional cases appear in the Medicare Fraud Strike Force Activities section below. 
 
35 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Patient Abuse 
The following case example involves patient abuse: 
 
South DakotaDr. Stanley Patrick Weber was convicted of multiple sex offenses against 
children.  Evidence at trial established that Weber, while employed as a pediatrician with 
the Indian Health Service at Pine Ridge, South Dakota, sexually abused multiple Native 
American children between 1999 and 2011.  Weber was sentenced to 5 consecutive life 
sentences in Federal prison for the five aggravated sexual abuse charges, and 15 years on 
each of the three counts of sexual abuse of a minor.  All of these sentences are to be 
served consecutively to each other, and also consecutive to his previous sentence in the 
District of Montana of 18 years in Federal prison.  Weber was also ordered to pay $800,000 
in criminal fines and an $800 special assessment to the Federal Crime Victims Fund. 
 
Prescription Drugs 
The following case example involves prescription drugs: 
 
VirginiaDr. Joel Smithers was convicted on 861 Federal counts of drug distribution, 
including distribution resulting in death, for operating a pill mill.  Evidence presented at 
trial showed Smithers opened an office in Martinsville, Virginia, in August 2015, and 
prescribed controlled substances to every patient in his practice, resulting in over 500,000 
Schedule II controlled substances being distributed.  The drugs involved included 
oxymorphone, oxycodone, hydromorphone, and fentanyl.  A majority of those receiving 
prescriptions from Smithers traveled hundreds of miles, one-way, to receive the drugs.  His 
office lacked basic medical supplies, his receptionist lived out of a back room during the 
work week, and many patients slept outside and urinated in the parking lot.  At trial, one 
woman, who described herself as an addict, compared Smithers practice to pill mills she 
frequented in Florida where she received medication without any kind of physical exam or 
medical records.  Patients who came to the office would wait up to 12 hours to see 
Smithers, who regularly kept his office open past midnight.  Smithers did not accept 
insurance and took in over $700,000 in cash and credit card payments prior to a search 
warrant being executed at his office on March 7, 2017.  Smithers caused West Virginia 
Medicaid to pay $469,220 and Medicare Part D to pay $775,479 in suspected fraudulent 
prescriptions.  Smithers was found guilty of 1 count of maintaining a place for the purpose 
of illegally distributing controlled substances, 1 count of possession with the intent to 
distribute controlled substances, and 859 counts of illegally prescribing Schedule II 
controlled substances, and was sentenced to 40 years in prison.   
 
Pharmacies 
The following case example involves a pharmacy: 
36 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
 
FloridaA doctor, pharmacists, and marketers in a compounding pharmacy scheme were 
sentenced for conspiring to pay and receive health care kickbacks for prescriptions for 
compounded creams billed to TRICARE, Medicare, and private insurance.  According to 
court documents, in 2014 and 2015, the marketing firm Centurion was operated by Frank V. 
Monte and Kimberly S. Anderson.  Centurion employed sales representatives to market 
compounded prescription medications, specifically, creams for pain and scars, to 
beneficiaries of health care plans, especially TRICARE.  In May 2014, Centurion entered into 
an exclusive, illegal kickback arrangement with LifeCare pharmacy, owned by Carlos 
Mazariegos and Benjamin Nundy, whereby Centurion and LifeCare agreed to share equally 
in the profits from the claims paid by health benefit programs for compounded 
medications prescribed to beneficiaries.  Baldizzi agreed with Monte, Anderson, 
Mazariegos, and Nundy, that, in exchange for kickbacks, he would write prescriptions for 
compounded creams marketed by Centurion to TRICARE beneficiaries.  Between May and 
November 2014, LifeCare billed health insurers more than $12.4 million for compounded 
cream prescriptions written by Baldizzi and marketed by Centurion.  Even after LifeCare 
closed and Baldizzi withdrew from the conspiracy, Centurion transferred the existing refills 
from Baldizzis prescriptions to a new pharmacy, which filled the prescriptions and billed 
TRICARE.  In all, Centurion caused TRICARE to be billed more than $50 million for 
compounded creams prescribed to patients that it had recruited.  The five codefendants 
involved in the scheme were sentenced to a combined 5 years, 6 months, and 2 days in 
prison and ordered to pay $6.4 million in restitution. 
 
Mental Health 
The following case example involves mental health: 
 
OhioRyan P. Sheridan, owner and operator of Braking Point Recovery Center, was 
convicted of charges from his involvement in a $48 million scheme to defraud Medicaid.  
Sheridan was the sole owner of Braking Point Recovery Center, which operated drug and 
alcohol rehabilitation centers in Austintown and Whitehall, Ohio, that provided detox, 
intensive outpatient treatment, day treatment, and residential living rehabilitation.  Sheridan 
also owned and operated numerous other businesses, including Braking Point Health and 
Fitness LLC and Braking Point Recovery Housing LLC, which owned recovery houses (or 
sober houses) for individuals attempting to maintain abstinence from drugs and alcohol.  
According to court documents, between January 12, 2015 and October 18, 2017, Sheridan 
and his codefendants submitted or caused to be submitted billings to Medicaid for drug 
and alcohol services that were: coded to reflect a service more costly than was actually 
provided; without proper documentation; without proper assessment documents 
containing valid diagnosis; billings for patients whose records did not contain diagnosis by 
a physician; related to treatment at unlicensed inpatient beds; billings related to dispensing 
of Suboxone, even though the treating physician did not have the authority to do so; for 
37 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
case management services when, in fact, the clients were working out at Sheridans gym; 
billings based on quotas provided to the nurses by the defendants to bill 4 to 5 hours of 
treatment daily, even if the services were not medically necessary; billing for inpatient detox 
and drug treatment services that were, in fact, provided in an outpatient setting, among 
other violations.  Sheridan and his codefendants developed a standard protocol of 
distributing the same amount of Suboxone to every patient seeking drug treatment 
immediately upon entering Braking Points detox program without being evaluated by a 
properly licensed physician to determine the medical necessity for the use of 
Suboxone.  Sheridan had the treating physician use another physicians DEA data waiver 
license to dispense more than 3,000 doses of Suboxone in 2017 alone without the data 
waiver physician having seen the patients.  Sheridan pleaded guilty to 60 counts related to 
health care fraud and controlled substances and was sentenced to 7 years and 6 months in 
prison and ordered to pay $24.4 million in restitution, joint and several.  Three defendants 
involved in the scheme were sentenced to probation for their role. 
 
Electronic Health Records 
The following case example involves electronic health records (EHRs): 
 
CaliforniaOn January 26, 2020, Practice Fusion, Inc. (Practice Fusion), a health IT software 
company, entered into a $113,374,962 False Claims Act settlement agreement with the 
United States.  The settlement agreement resolves allegations that Practice Fusion falsely 
represented to its Office of National Coordinator Authorized Certification Body (ONC-ACB) 
that its EHR software products met certification criteria under ONCs Health IT Certification 
Program.  Practice Fusion knew that use of certified software is a requirement for eligible 
health care providers to receive incentive payments under the CMS EHR Incentive Payment 
Programs (aka the Meaningful Use programs). Consequently, Practice Fusion knowingly 
caused eligible health care providers, who used certain versions of its EHR software, to 
falsely attest to compliance with CMS requirements necessary to receive Medicare and 
Medicaid incentive payments.  In addition, the settlement agreement resolves allegations 
that Practice Fusion knowingly and willfully solicited and received illegal remuneration from 
pharmaceutical manufacturers, in exchange for influencing and implementing clinical 
decision support (CDS) alerts in its EHR software, which did not always reflect accepted 
medical standards, and were designed to increase prescriptions for their drug products in 
violation of the Anti-Kickback Statute, 42 U.S.C.  1320a-7b.  These CDS alerts could 
influence health care providers to prescribe the pharmaceutical manufacturers drugs 
resulting in kickback tainted claims being submitted to Medicare, Medicaid, and TRICARE, 
in violation of the False Claims Act.  Practice Fusion has also executed a deferred 
prosecution agreement (DPA) and agreed to pay over $26 million in criminal fines and 
forfeiture.  In the DPA, Practice Fusion admits that it solicited and received kickbacks from a 
major opioid company in exchange for utilizing its EHR software to influence physician 
prescribing of opioid pain medications. 
38 
 
 
  Department of Health and Human Services, Office of Inspector General 
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Laboratories  
The following case example involves a laboratory: 
 
South CarolinaOn October 23, 2019, Myriad Genetics, Inc. (Myriad) entered into an 
$8,250,000 settlement agreement with a Relator to resolve allegations that Myriad 
inappropriately billed genetic testing, specifically their Integrated BRACAnalysis and their 
myRisk test, using the wrong procedure codes and modifiers to obtain higher 
reimbursement.  Of the $8,250,000 settlement agreement, $3,513,849 is restitution for the 
Medicare Part B program and $1,159,536 is payment to HHS due to multiple damages.  
HHS OIG OI will be reimbursed $46,720 in investigative costs. 
 
Home Health Agencies 
The following case example involves home health agencies: 
 
FloridaRodolfo and Marta Pichardo were sentenced to prison for their roles in a 
$38 million health care fraud and wire fraud scheme.  According to court documents, the 
Pichardos built a vast empire of fraud, consisting of at least six fraudulent home health 
agencies, three fraudulent therapy staffing companies, and two fraudulent pharmacies.  
Each of these entities purportedly provided home health services, therapy services, and 
prescription drugs, respectively, to qualified Medicare beneficiaries, though in fact they did 
not.  From May 2010 through September 2016, the Pichardos and their co-conspirators 
used this empire to submit more than $38 million in fraudulent claims to Medicare, for 
which the trust-based program then paid out more than $33 million.  The Pichardos then 
used this money to purchase multiple properties, high-end vehicles, expensive jewelry, 
plane tickets, vacations, cosmetic procedures, and more, both for themselves and their 
family members.  As part of the scheme, Rodolfo Pichardo offered and paid kickbacks, both 
by cash and by check, to numerous patient recruiters, in exchange for the referral of 
Medicare beneficiaries to home health agencies that he owned.  The conspirators also 
offered and paid cash kickbacks to owners and operators of multiple Miami-Dade medical 
clinics, in return for acquiring medically unnecessary home health prescriptions for the 
recruited Medicare beneficiaries.  These prescriptions were then used by the Pichardos 
various home health agencies and pharmacies to bill Medicare for purported services and 
pharmaceutical drugs that were provided to allegedly qualified Medicare beneficiaries.  
Rodolfo and Marta were sentenced to a total of 23 years and 8 months in prison and 
ordered to pay $33.8 million in restitution, joint and several with a codefendant.  Four 
defendants involved in the scheme were previously sentenced to a combined 12 years and 
1 month in prison and ordered to pay $135,245 in restitution. 
 
39 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
DME Company 
The following case example involves a DME company: 
 
CaliforniaOn December 19, 2019, ResMed Corp. (ResMed) agreed to pay more than 
$37.5 million under a False Claims Act settlement agreement with the United States.  The 
settlement agreement resolves allegations that ResMed (1) provided DME companies with 
free telephone call center services and other free patient outreach services that enabled 
these companies to order resupplies for their patients with sleep apnea; (2) provided sleep 
labs with free and below-cost positive airway pressure masks and diagnostic machines, as 
well as free installation of these machines; (3) arranged for, and fully guaranteed the 
payments due on, interest-free loans that DME supplies acquired from third-party financial 
institutions for the purchase of ResMed equipment; and (4) provided non-sleep specialist 
physicians free home sleep testing devices referred to as ApneaLink.  ResMed agreed to 
enter into a 5-year CIA with OIG in conjunction with the settlement.  
 
Hospital 
The following case example involves a hospital: 
 
KentuckyOn October 30, 2019, Jewish Hospital and St. Marys Healthcare, Inc. d/b/a 
Pharmacy Plus and Pharmacy Plus Solutions (collectively, Jewish Hospital) entered into a 
$10,101,132 False Claims Act settlement agreement with the United States.  The settlement 
agreement resolves allegations that Jewish Hospital submitted claims to Medicare Part B for 
prescriptions drugs that did not meet Medicare coverage requirements for a detailed 
written order or did not contain documentation supporting the prescription refill.  The 
agreement also resolves allegations that Jewish Hospital provided improper remuneration 
to Medicare beneficiaries in the form of free blood glucose testing supplies, and waiver of 
copayments and deductibles for insulin.   
 
Kickbacks 
The following case example involves kickbacks: 
 
South DakotaOn October 28, 2019, Sanford Health, Sanford Clinic, and Sanford Medical 
Center (collectively, Sanford) entered into a $20,250,000 False Claims Act settlement 
agreement with the United States.  The settlement agreement resolves allegations that 
Sanford knowingly submitted false claims to Federal health care programs predicated on 
illegal kickbacks.  Specifically, the United States alleged that a Sanford physician solicited 
and received improper remuneration, including profit distributions, from various physician-
40 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
owned distributorships in exchange for the Sanford physicians use of certain products.  
Sanford agreed to enter into a 5-year CIA with OIG in connection with the settlement.  
 
Nonprofit Organization 
The following case example involves a nonprofit organization: 
 
MassachusettsThe Assistance Fund, Inc. (TAF) entered into a civil settlement agreement 
with the United States under which it agreed to pay $4 million.  TAF is a nonprofit 
foundation that receives funding from pharmaceutical manufacturers and then uses the 
funds, less administrative fees, to cover the drug copay obligations of patients, including 
Medicare patients.  Through the settlement, TAF resolved allegations that it violated the 
False Claims Act by enabling pharmaceutical manufacturers to pay kickbacks (in the form of 
copayment assistance) to Medicare patients taking the drugs of drug manufacturers that 
donated monies to TAF.  More specifically, the United Sates alleged that TAF conspired 
with three pharmaceutical manufacturers to enable them to pay kickbacks to Medicare 
patients taking the manufacturers' drugs.  TAF agreed to enter a 3-year Integrity 
Agreement with OIG in connection with the settlement. 
 
Nursing Home 
The following case example involves a nursing home: 
 
NevadaOn October 25, 2019, Encompass Health Corp. (formerly known as HealthSouth 
Corporation); Encompass Health Rehabilitation Hospital of Henderson, LLC (EHRHH); and 
Kenneth Bowman (Bowman) (collectively, Encompass) entered into a False Claims Act 
settlement agreement with the United States.  Encompass agreed to pay $4 million to 
resolve allegations that Encompass filed improperly coded claims for Inpatient 
Rehabilitation Facility (IRF) services provided at HealthSouth Henderson, Inc. (HHI).  
Specifically, the United States alleged that Encompass, through HHI, submitted false claims 
to Medicare because HHI had improperly assigned inaccurate and artificially low admission 
Functional Independence Measure scores on Patient Assessment Instrument forms (IRF-
PAIs) for some of its patients, resulting in HHI receiving greater reimbursement for its 
services for those patients than was warranted. 
 
Occupational Therapy 
The following case example involves occupational therapy: 
 
New YorkDr. Paul Mathieu was sentenced for his participation in a $30 million scheme 
to defraud Medicare and the New York State Medicaid Program.  Between 2007 and 2013, 
Mathieu falsely posed as the owner of three medical clinics, which were actually owned by 
41 
 
 
  Department of Health and Human Services, Office of Inspector General 
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a corrupt businessman, and falsely claimed that he had examined and treated thousands 
of patients whom he had not in fact seen.  Mathieu was convicted in on charges of health 
care fraud, wire fraud, mail fraud, conspiracy to commit those offenses, and conspiracy to 
make false statements in connection with a Federal health care program.  Between 2007 
and 2013, Aleksandr Burman owned and operated six medical clinics in Brooklyn that 
fraudulently billed Medicare and Medicaid for medical services and supplies that were not 
provided, were provided without regard to medical necessity, or were otherwise 
fraudulently billed.  Under New York State law, professional medical corporations must be 
owned by a medical professional.  To circumvent this requirement, Burman and Mathieu 
agreed to have Mathieu pose as the true owner of a succession of three different clinics, 
which Burman owned and operated for more than 5 years, from 2007 through 2013.  
Throughout those years, Mathieu signed a variety of fraudulent documents that falsely 
represented to banks, Medicare, Medicaid, and others that Mathieu was the sole owner of 
The Medical Office of Paul J. Mathieu, P.C.; Sunlight Medical, P.C.; and Ocean View 
Medical of Brooklyn, P.C.  Burman also hired two other doctors, Ewald J. Antoine and 
Mustak Y. Vaid, to pose fraudulently as the owners of three additional, related clinics.  
Mathieu also came weekly to several of the clinics, where he signed stacks of false and 
fraudulent medical charts, and issued referrals for expensive additional testing, 
occupational therapy, and physical therapy.  For the last 312 years of the scheme, Mathieu 
saw no patients at all, simply falsifying enormous stacks of phony medical records falsely 
stating that he had seen and treated such patients.  In addition to his role in the clinics, 
Mathieu also wrote unneeded prescriptions for adult diapers and other incontinence 
products, which prescriptions were filled at Universal Supply Depot, a medical supply 
company also owned by Burman.  Mathieu was so prolific in this regard that, throughout 
the period of the fraud, he was the No. 1 top prescriber of adult diapers in the State of 
New York.  Mathieu continued to write such prescriptions, even after the medical clinics 
closed after Medicare stopped paying any of the clinics claims.  Mathieu was convicted 
on charges of health care fraud, wire fraud, mail fraud, conspiracy to commit those 
offenses, and conspiracy to make false statements in connection with a Federal health 
care program and was sentenced to 4 years in prison and ordered to pay $16.3 million in 
restitution, joint and several.  Nine codefendants involved in the scheme were previously 
sentenced to a combined 26 years and 8 months in prison. 
 
State Agency 
The following case example involves a state agency: 
 
LouisianaOn November 4, 2019, the Louisiana Department of Health (LDH) entered into 
a $13,442,550.96 False Claims Act settlement agreement with the United States.  LDH is the 
State agency that administers the Louisiana Medical Assistance Program, known as the 
Louisiana Medicaid Program.  The settlement agreement resolves allegations that LDH 
falsely claimed expenditures in connection with long-term care, hospice, and adult day care 
42 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
services on four CMS-64 reports submitted to CMS.  LDHs conduct resulted in the state 
receiving a higher amount of the Federal financial participation reimbursement, or Federal 
share, than it was entitled to receive.  In connection with the settlement, LDH agreed to 
enter into a 3-year State Agency Compliance Agreement with OIG, the first-of-its-kind 
compliance agreement with a Medicaid agency.  The State Agency Compliance Agreement 
will require LDH to engage an Independent Review Organization to conduct Quarterly 
Medicaid Assistance Expenditures Reviews. 
 
Medicare Fraud Strike Force Activities 
In 2007, Medicare Fraud Strike Force teams began an effort to combine resources of Federal, State, and 
local law enforcement entities to prevent and combat health care fraud, waste, and abuse.  These 
partnerships among OIG and HHS, DOJ, U.S. Attorneys Offices, the Federal Bureau of Investigation (FBI), 
and State and local law enforcement have a common goal: to analyze health care fraud data and 
investigative intelligence to quickly identify fraud and bring prosecutions.  Strike Force teams operate in 11 
areas: Miami and Tampa/Orlando, Florida; Dallas and Houston, Texas; Los Angeles, California; Detroit, 
Michigan; Brooklyn, New York; Baton Rouge and New Orleans, Louisiana; Chicago, Illinois; and Newark, 
New Jersey/Philadelphia, Pennsylvania; along with a Corporate Strike Force located in Washington, DC.  
During this semiannual reporting period, Strike Force efforts resulted in the filing of charges against 86 
individuals or entities, 118 criminal actions, and more than $262.4 million in investigative receivables. 
 
In October 2018, DOJ announced the creation of a new initiative to combat the nations opioid 
epidemic.  The Appalachian Regional Prescription Opioid Strike Force covers 10 Federal judicial districts 
in Alabama, Kentucky, Ohio, Tennessee, Virginia, and West Virginia.  OIGs Office of Investigations is 
working closely with its law enforcement partners at DEA, FBI, and the Medicaid Fraud Control Units 
(MFCUs) to provide investigative support.  Cases involve physicians and pharmacies that are 
responsible for medically unnecessary opioid prescriptions and dangerous drug combinations that are 
being paid for by Medicare and Medicaid.  In many instances, there are other allegations of 
wrongdoing relating to kickbacks, health care fraud and quality of care, including patient overdoses 
and deaths. 
 
The following case examples involve Strike Force cases: 
 
FloridaRaymond Shores was convicted of charges resulting from his involvement in a scheme to 
defraud Medicare and TRICARE.  Shores owned and operated several durable medical equipment 
supplier companies in Florida, California, and Georgia, which included: Alliance Medical Supplies, 
LLC; Empire Medical Equipment and Supplies, LLC; Hogan Prosthetics & Orthotics Inc.; Bradley 
Healthcare Group, Inc.; Universal Healthcare Group DME, Inc.; Atlantic Coastal Medical Supplies, 
LLC; and Arbor Medical Equipment, Inc.  According to court documents, from approximately 
November 2015 through March 2019, Shores and his codefendants payed kickbacks and bribes in 
exchange for signed doctors orders for orthotic braces that were not medically necessary.  The 
43 
 
 
  Department of Health and Human Services, Office of Inspector General 
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combined billed amount for both Medicare and TRICARE is $125.1 million and the combined paid 
amount is $70.3 million.  Shores pleaded guilty to conspiracy to commit health care fraud and was 
sentenced to 6 years and 8 months in prison and ordered to pay restitution of $70.3 million (which 
includes $69.6 million to Medicare Part B and $751,406 to TRICARE), joint and several with other 
co-conspirators.  Shores was also ordered to forfeit $35.1 million.  
 
FloridaThree former co-owners and clinical directors of a group of purported substance abuse 
treatment centers and sober homes were sentenced to prison for their roles in a conspiracy to 
commit health care fraud and wire fraud in which the conspirators sought to obtain more than 
$21 million.  According to court documents, from June 2016 through April 2019, Ali Ahmed, 
Sebastian Ahmed, and Mauren Morel submitted and caused others to submit, via interstate wire 
communications, approximately $1.6 million in claims that falsely represented that various health 
care benefits, primarily substance abuse Partial Hospitalization Program (PHP), Intensive Outpatient 
Program (IOP), and Outpatient Program (OP) services, were medically necessary, prescribed by a 
doctor, and provided by Jacobs Well to insurance beneficiaries of Aetna, Blue Cross Blue Shield 
(BCBS), Cigna, and UnitedHealthcare (UHC).  As a result of such fraudulent claims, the insurance 
companies made payments to the corporate bank accounts of Jacobs Well in the approximate 
amount of $320,301.  Furthermore, during the same approximate time period, Ali Ahmed, 
Sebastian Ahmed, and Hector Efrain Alvarez submitted and caused others to submit, via interstate 
wire communications, approximately $21.8 million in claims which falsely represented that various 
health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically 
necessary, prescribed by a doctor, and provided by Medi MD to insurance beneficiaries of Aetna, 
BCBS, Cigna, Humana, and UHC.  As a result of such fraudulent claims, the insurance companies 
made payments to the corporate bank accounts of Medi MD in the approximate amount of $3.8 
million.  Ali Ahmed, Hector Efrain Alvarez, and Mauren Morel each pleaded guilty to conspiracy to 
commit health care fraud and wire fraud and were sentenced to a combined 15 years and 4 
months in prison and ordered to pay $4.2 million in restitution, joint and several. 
 
Compliance Trainings 
Health Care Provider Compliance Training  
OIG provides free training on our website for health care providers, compliance professionals, and 
attorneys.  OIGs Provider Compliance Training was an initiative developed in 2011 that continues to 
reach the health care community with OIGs message of compliance and prevention via free 
downloadable comprehensive training materials and podcasts.  OIGs provider compliance training 
resources are available at https://oig.hhs.gov/compliance/compliance-guidance/index.asp. 
 
Indian Health and Human Services Compliance Training 
In addition to the May 2018 compliance and quality training held in Oklahoma for more than 200 
individuals representing IHS, Tribes, and Tribal health care and human services organizations, OIG 
44 
 
 
  Department of Health and Human Services, Office of Inspector General 
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participated throughout this semiannual reporting period in various HHS-sponsored conferences, 
providing training on fraud prevention, internal controls, and compliance.  OIG Indian health and 
human services compliance training resources are available at https://oig.hhs.gov/AIAN. 
 
Most Wanted Fugitives List 
The OIG Most Wanted Fugitives website continues to garner national and international attention and has 
greatly assisted in helping to capture fugitives charged with defrauding Federal health care programs and 
stealing millions of taxpayer dollars.  The Most Wanted Fugitives website is continually updated and 
features a profile for each fugitive as well as an online tip form and a hotline number for individuals to 
report fugitive-related information to OIG, in English or Spanish, 24 hours a day, 365 days a year.  The 
Most Wanted Fugitives list is available at https://oig.hhs.gov/fraud/fugitives/.  During this semiannual 
reporting period, one fugitive was captured. 
 
The following is a case example involving a captured fugitive: 
 
One of OIGs Most Wanted Fugitives, Alejandro Diaz Gonzalez, was captured during this reporting 
period.  Gonzalez was involved in a scheme to fraudulently bill Medicare for services not rendered.  
Gonzalez has been a fugitive since 2015 and was believed to have absconded to Cubahe was 
recently apprehended by authorities attempting to re-enter the United States through the Arizona 
border.   
 
Gonzalez became the owner of Humanly Home Health Care Agency (Humanly) in December 2014, 
and a significant increase in billing occurred in conjunction with this change of ownership during 
2014 and 2015.  In 2014, the Medicare Program reimbursed Humanly approximately $246,097.61; 
however, in March 2015, Medicare reimbursed Humanly approximately $856,478.47.  A large 
percentage of beneficiaries identified in these claims reside outside the service area for Humanly, 
and numerous complaints were received regarding services not rendered.  In November 2019, 
Gonzalez pleaded guilty to five counts of health care fraud and was sentenced to 2 years and 6 
months in prison and ordered to pay $1.3 million in restitution. 
 
HHS-OIG Hotline 
Part of OIGs Office of Investigations, the hotline is the public-facing division for OIGs intake and 
evaluation of fraud tips.  The mission of the HHS-OIG Hotline is to support OIGs oversight responsibilities 
in safeguarding the integrity of all programs and personnel under HHSs purview and protecting them 
from fraud, waste, and abuse.  The hotline achieves its mission through its staffs dedication to timely 
intake and analysis of information received from various sources, such as the Submit a Complaint link on 
the HHS-OIG website.  During this semiannual reporting period, the OIG Hotline reported expected 
recoveries of $21.7 million as a direct result of cases originating from hotline complaints. 
 
45 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
OIG Hotline Activity (10/1/20193/31/20) 
Contacts to 1-800-HHS-TIPS phone line, including  47,261 
callers seeking information 
Total tips evaluated  16,394 
Tips referred for action  11,780 
Closed; no basis provided for further action  4,614  
Closed; no HHS violation1  506 
 
Sources of tips referred for action 
Phone  4,233 
OIG website  5,381 
Letters or faxes  1,130 
Other  1,036 
 
Medicaid Fraud Control Units 
OIG Oversight of Medicaid Fraud Control Units 
MFCUs are key partners with OIG in the fight against fraud, waste, and abuse in State Medicaid 
programs.  OIG has oversight responsibility for MFCUs and administers grants that provide Federal 
funding for their operations.  Currently, all 50 States, the District of Columbia, Puerto Rico, and the 
U.S. Virgin Islands operate MFCUs.  In this reporting period, OIG certified a new MFCU in North 
Dakota.  The Federal Government reimburses 90 percent of a MFCUs total expenditures during the 
first 3 years of operation and 75 percent thereafter.  MFCUs investigate and prosecute Medicaid 
provider fraud as well as patient abuse and neglect in health care facilities and board and care 
facilities. 
 
Medicaid Fraud Control Units Fiscal Year 2019 Annual Report (OEI-09-20-00110), March 2020 
This annual report highlights statistics on the accomplishments of the 52 MFCUs in operation 
during FY 2019.  OIG found that the number of convictions in FY 2019 (1,527) remained consistent 
with previous years.  Forty-four percent of the 1,111 MFCU fraud convictions involved personal care 
services attendants and agencies.  Fraud cases accounted for 73 percent of the MFCU convictions, 
 
 
1 Some of the closed complaints in this reporting period may have been evaluated or referred for action in a previous reporting 
period. 
46 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
while 27 percent involved patient abuse or neglect.  MFCUs were responsible for 658 civil 
settlements and judgments, 25 percent of which involved pharmaceutical manufacturers.  MFCUs 
reported $1.9 billion in criminal and civil recoveries. 
In an appendix to the report, OIG summarizes beneficial practices identified by OIG in its onsite 
reports that may be useful to other MFCUs. 
OIG Onsite Reviews of MFCUs 
In addition to an annual recertification review of each MFCU, OIG conducts reviews of a sample of 
MFCUs.  OIG evaluates MFCU operations based on 12 performance standards and assesses 
compliance with laws, regulations, and OIG policy guidance.  During the reporting period, OIG 
issued reports of onsite reviews of the following MFCUs: 
 
Missouri Medicaid Fraud Control Unit: 2018 Onsite Inspection (OEI-12-18-00490), January 
2020 
Montana Medicaid Fraud Control Unit: 2019 Onsite Inspection (OEI-12-19-00170), March 
2020 
 
OIG Joint Casework With MFCUs 
The following case example involves OIGs joint efforts with MFCUs: 
 
New YorkDr. Barry Sloan was convicted of manslaughter in the opioid death of a patient.  As 
part of his guilty plea, Sloan admitted that in August 2014, he issued to L.W. without medical 
justification, two separate prescriptions for Subsys, a narcotic approved by the FDA to treat 
intense pain in late-stage cancer patients.  Four days later, L.W., an otherwise healthy young man, 
filled the prescription issued to him by Sloan and died early the next morning after overdosing on 
fentanyl.  Sloan also admitted he knowingly provided false information to Healthfirst, a Medicaid 
managed care company contracted by the State of New York to cover the cost of medical care 
and prescriptions.  Furthermore, Sloan admitted that between 2012 and 2016, he recklessly issued 
prescriptions for controlled substances, including highly addictive opioids, to four other patients, 
and that providing those prescriptions without medical justification caused a significant risk of 
overdose and death to each of these patients.  Sloan pleaded guilty to manslaughter in the 
second degree, reckless endangerment, and criminal sale of a prescription for a controlled 
substance by a practitioner and was sentenced to 4 to 9 years in prison.  OIG investigated this 
case with the New York MFCU. 
 
Advisory Opinions and Other Industry Guidance  
Advisory opinions, which are developed in consultation with DOJ, are issued to requesting parties 
regarding the interpretation and applicability of certain statutes relating to Federal health care programs.  
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  Department of Health and Human Services, Office of Inspector General 
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The Health Insurance Portability and Accountability Act of 1996 (HIPAA),  205, allows OIG to provide case-
specific formal guidance on the application of the anti-kickback statute and safe harbor provisions and 
other OIG health care fraud and abuse sanctions.  During this semiannual reporting period, OIG received 11 
requests for advisory opinions and issued 3 advisory opinions. 
 
Sanction Authorities and Other Administrative Actions  
Various Federal laws provide authorities the ability to impose administrative sanctions for fraud and abuse 
as well as other activities that pose a risk to Federal health care programs and their beneficiaries.  
Sanctions include the exclusion of individuals and entities from Federal health care programs and the 
imposition of CMPs for submitting false and fraudulent claims to a Federal health care program or for 
violating the anti-kickback statute, the physician self-referral law (commonly referred to as the Stark Law), 
or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the patient dumping 
statute.  Sanctions also include referrals for suspension and debarment in cases of grant and contract 
fraud. 
 
During this semiannual reporting period, OIG imposed 968 administrative sanctions in the form of 
program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk 
to Federal health care programs and their beneficiaries.  
 
Exclusion and penalty authorities are described in Appendix C and on our website at 
http://oig.hhs.gov/fraud/enforcement/cmp/index.asp. 
 
Program Exclusions 
During this semiannual reporting period, OIG excluded 903 individuals and entities from Medicare, 
Medicaid, and other Federal health care programs.  Most of the exclusions resulted from 
convictions for crimes relating to Medicare or Medicaid, patient abuse or neglect, financial 
misconduct, controlled substances, or as a result of license revocation.  OIG completed the 
deployment of a new service for MFCUs to report convictions through a central web-based portal 
for exclusions.  OIG is also responsible for reinstating providers who apply and have met the 
requirements of their exclusions.  For a list of excluded individuals and entities, see 
https://exclusions.oig.hhs.gov/. 
 
The following are case examples of program exclusions: 
 
TexasDr. Howard Gregg Diamond was excluded for a minimum period of 50 years based 
on his conviction of conspiracy to possess with the intent to distribute and dispense and 
distributing and dispensing of controlled substances resulting in death, health care fraud, 
and aiding and abetting.  From approximately January 2010 to about April 2018, Dr. 
Diamond prescribed controlled medications outside the scope of professional practice by 
writing prescriptions that contained fentanyl, morphine, oxycodone, oxymorphone, 
48 
 
 
  Department of Health and Human Services, Office of Inspector General 
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methadone, hydrocodone, hydromorphone, alprazolam, zolpidem, carisoprodol and 
diazepam.  As a result of his prescribing practices, at least 7 patients died. In addition to his 
prescribing issues, Dr. Diamond submitted and caused to be submitted, claims to Medicare 
for services he did not provide.  The court sentenced Dr. Diamond to 20 years of 
incarceration and the Texas Medical Boar revoked his license.    
 
TexasMario Rubio, a massage therapist, was excluded for a minimum period of 50 years 
based on his conviction of sexual assault.  During a massage therapy session, Rubio 
touched the patient inappropriately to include sexually penetrating her while providing 
massage therapy services.  The court sentenced Rubio to serve 18 years of incarceration 
and the Texas Department of Licensing and Regulation, Massage therapy program revoked 
his license.   
 
Suspensions and Debarments  
Suspensions and debarments are administrative tools used by HHS and other Federal agencies to 
protect the Government from individuals and entities that have engaged in contract fraud, have 
misused grant funds, or are otherwise not presently responsible.  Because these are 
Government-wide sanctions, an individual or entity that has been suspended or debarred by HHS 
or any other agency is ineligible to participate in any future funding opportunities across the 
Federal Government for a specified period of time. 
 
OIG refers individuals and entities that have potentially engaged in grant or contract fraud or 
misconduct to the HHS Suspension and Debarment Official, who is responsible for determining 
whether to impose a suspension or debarment.  OIG continues to develop a robust Suspension 
and Debarment program and uses this tool to protect Government programs against fraud, waste, 
poor performance, and noncompliance with contract provisions or applicable law.  
 
The following case example involves debarment: 
 
IllinoisThomas Draper was an agent with the Community Support System (CSS), also 
known as ARC Support Systems.  Draper used a credit card belonging to CSS to make 
purchases for personal transactions totaling over $74,666.  Draper pleaded guilty to one 
count of Federal program theft and was sentenced to 10 months incarceration and ordered 
to pay $74,666.92 in restitution. 
 
Civil Monetary Penalties Law 
The Civil Monetary Penalties Law (CMPL) authorizes OIG to impose administrative penalties, 
assessments, and exclusions against a person who, among other things, submits, or causes to 
be submitted, claims to a Federal health care program that the person knows, or should know, 
are false or fraudulent.  The exclusions statute also authorizes OIG to exclude a person who 
49 
 
 
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violates the CMPL.  During this semiannual reporting period, OIG concluded cases involving 
more than $16.9 million in CMPs and assessments. 
 
Affirmative Litigation 
The CMPL authorizes OIG to use its administrative remedies to affirmatively pursue cases.  OIG 
may also exclude under the exclusions statute for engaging in conduct that violates the CMPL.  
When OIG excludes under the exclusions statute for engaging in conduct that violates the 
CMPL, it is known as an affirmative exclusion. 
 
The following case examples involve affirmative litigation under the CMPL: 
   
FloridaOn October 2, 2019, Physicians Group Services, P.A. (PGS) entered into a 
$1,128,615.04 CMPL settlement agreement with OIG.  The settlement agreement resolves 
allegations that PGS received remuneration from Millennium Health, LLC f/k/a Millennium 
Laboratories, Inc. (Millennium), in violation of the anti-kickback statute, 42 U.S.C.  1320a-
7b.  Specifically, OIG alleged that PGS received improper remuneration in the form of 
point-of-care test (POCT) cups, which resulted in prohibited referrals.  OIG further alleged 
that the referrals were prohibited because the remuneration created a financial relationship 
and PGS caused Millennium to present claims for designated health services that resulted 
from the prohibited referrals, in violation of the Stark Law, 42 U.S.C.  1395nn.  This is one in 
a series of cases the OIG has settled regarding the provision of free POCT cups from 
Millennium.  To date, the OIG has recovered over $2,175,000 as a result of these CMPL 
settlements.  
 
New YorkOn January 22, 2020, SeniorCare Emergency Medical Services, Inc. (SeniorCare) 
entered into a $1,231,854.09 CMPL settlement agreement with OIG.  The settlement 
agreement resolves allegations that SeniorCare knowingly presented claims to Medicare 
Part B for ambulance transportation to and from skilled nursing facilities (SNFs) where such 
transportation was already covered by the SNF consolidated billing payment under 
Medicare Part A. 
 
TexasOn October 4, 2019, Ohio River Laboratories, LLC (ORL) entered into a $49,493.48 
CMPL settlement agreement with OIG.  The settlement agreement resolves allegations that 
ORL submitted claims to Medicare for specimen validity testing (SVT), a non-covered 
service.  SVT is a quality control process that evaluates a urine drug screen sample to 
determine whether it is consistent with normal human urine and to ensure that the sample 
has not been substituted, adulterated, or diluted.  This is one in a series of data-driven 
cases the OIG has settled concerning SVT.  To date, the OIG has recovered over 
$2.4 million as a result of these CMPL settlements.   
 
50 
 
 
  Department of Health and Human Services, Office of Inspector General 
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Patient Dumping  
Some of the CMPL cases that OIG resolved during this semiannual reporting period were pursued 
under EMTALA, a statute designed to prevent hospitals from denying emergency care to patients 
and to ensure patient access to appropriate emergency medical services. 
 
The following case examples involve EMTALA: 
 
GeorgiaOn November 22, 2019, Rockdale Medical Center (RMC) entered into a $70,000 
settlement agreement with OIG.  The settlement agreement resolves allegations that, based 
on OIG's investigation, RMC violated EMTALA when it failed to provide a medical screening 
examination, stabilizing treatment or proper transfer to a 79-year-old female.  Specifically, 
the patient presented to RMC's Emergency Department (ED) by ambulance after being 
involved in a motor vehicle crash with multiple injured individuals.  EMS contacted RMC's 
ED for guidance about disposition of the injured individuals and the ED physician at RMC 
directed that the patient be taken to a trauma center.  When one of the ambulances arrived 
in RMC's ambulance bay with the patient, a hospital nurse approached the ambulance and 
told the driver that the patient was supposed to go to the trauma center.  The ambulance 
then transported the patient to the trauma center without the patient receiving a medical 
screening examination.  During the transport, the patient's condition deteriorated, and she 
ultimately died at the receiving hospital.  
 
MarylandOn February 10, 2020, Maryland General Hospital, Inc. d/b/a UM Medical 
Center Midtown Campus (UMMC), entered into a $106,965 settlement agreement with OIG.  
The settlement agreement resolves allegations that UMMC violated EMTALA, when it failed 
to provide an adequate medical screening examination and stabilizing treatment for a 22-
year old female patient.  Specifically, the patient presented to UMMCs Emergency 
Department (ED) on January 9, 2018, via ambulance.  The patient was diagnosed with a 
contusion of the face and lip abrasion, and was discharged.  The patient refused to sign the 
discharge forms, stated that she was homeless, and refused to exit the premises.  The 
patient was escorted by security off of UMMCs property wearing only a hospital gown and 
socks.  The following day, the patient retuned to UMMCs ED via ambulance after a 
bystander called 911.  The bystander found the patient at a bus stop outside the hospital in 
30-degree weather.  A nurse told the patient that she would need to go to a shelter if she 
did not have a place to stay.  The patient was then discharged without receiving a medical 
screening examination or being stabilized. 
 
NevadaOn December 26, 2019, St. Rose Dominican HospitalSiena Campus (St. Rose) 
entered into a $90,000 settlement agreement with OIG.  The settlement agreement resolves 
allegations that, based on OIG's investigation, St. Rose violated EMTALA when it failed to 
provide an appropriate medical screening examination, stabilizing treatment and transfer 
for a patient.  On May 22, 2016, the patient presented to St. Rose's ED complaining of 
51 
 
 
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dizziness, black stool, yellow skin, and stiff muscles.  He was transferred with low blood 
pressure and without having received any blood products, and went into cardiac arrest and 
died shortly after arriving at the receiving hospital.  
 
Self-Disclosure Programs  
Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for 
acceptance into the Provider Self-Disclosure Protocol, a program created in 1998 for voluntary 
disclosure of self-discovered evidence of potential fraud.  The self-disclosure program may give 
providers the opportunity to avoid costs or disruptions associated with Government-directed 
investigations and civil or administrative litigation.  
 
Application processes for two additional self-disclosure programs were recently added to the OIG 
website for HHS contractors and grantees.  The OIG contractor self-disclosure program provides 
contractors the opportunity to self-disclose when they have potentially violated the False Claims 
Act or other Federal criminal laws prohibiting fraud, conflict of interest, bribery, or gratuity.  This 
self-disclosure process is available only to those with a Federal Acquisition Regulations (FAR)-based 
contract with HHS.  The OIG Grant Self-Disclosure Program is available for application by HHS 
grantees or HHS grant subrecipients and provides the opportunity for voluntary disclosure to OIG 
of potential fraud.  OIG evaluates the reported results of each internal investigation under the 
provider self-disclosure protocol to determine the appropriate course of action.  The self-disclosure 
guidelines are available on the OIG website at https://oig.hhs.gov/compliance/self-disclosure-
info/index.asp.  During this semiannual reporting period, provider self-disclosure cases resulted in 
more than $27 million in HHS receivables. 
 
The following case examples pertain to provider self-disclosure settlements: 
 
CaliforniaAfter it self-disclosed conduct to OIG, Central Coast In-Patient Consultants, Inc. 
(CCIC) agreed to pay $750,000 for allegedly violating the CMPL.  OIG alleged that CCIC 
submitted claims for services provided by physicians to Medicare beneficiaries at a hospital 
when those physicians were not properly enrolled in Medicare and when the names and 
National Provider Identifier numbers of physicians who did not furnish the services were 
used on claims submitted to and paid by Medicare for the services furnished by the non-
enrolled physicians. 
 
KansasAfter they self-disclosed conduct to OIG, Opti-Vision, LLC (Opti-Vision) and Grene 
Vision Group, L.L.C. (Grene), (collectively, "Opti-Vision and Grene") agreed to pay 
$916,145.39 for allegedly violating the CMPL provision applicable to kickbacks.  OIG alleged 
that Opti-Vision and Grene received remuneration from an optical laboratory for the 
purchase of membership interests in a group purchasing organization owned, in part, by 
Opti-Vision in the form of installment payments made to Opti-Vision that were conditioned 
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  Department of Health and Human Services, Office of Inspector General 
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on Opti-Vision, through Grene, purchasing a certain amount of items from the optical 
laboratory through the group purchasing organization.  
 
Corporate Integrity Agreements  
Many health care providers elect to settle their cases before litigation.  As part of the settlements, 
providers often agree to enter into CIAs with OIG to avoid exclusions from Medicare, Medicaid, 
and other Federal health care programs.  Under a CIA, a provider commits to establishing a 
program and taking other specified steps to ensure future compliance with Medicare and Medicaid 
rules.  The compliance programs are designed, in part, to prevent future fraud.  OIG monitors 
providers compliance with these agreements and may impose penalties on entities that fail to 
comply with the requirements of their CIAs. 
 
The following case examples involve CIA enforcement: 
 
South CarolinaAfter it disclosed conduct to OIG pursuant to its CIA, Drayer Physical 
Therapy, LLC (Drayer) entered into a $81,455.97 settlement agreement with OIG.  OIG 
alleged that Drayer billed and received reimbursement from TRICARE for physical therapy 
services that were provided by physical therapy assistants. 
 
TexasAfter it disclosed conduct to OIG pursuant to its CIA, Medi-Lynx Cardiac 
Monitoring, LLC (Medi-Lynx) entered into a $71,595.27 settlement agreement with OIG.  
OIG alleged that Medi-Lynx employed an individual that it knew or should have known was 
excluded from participation in Federal health care programs. 
   
53 
 
 
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Public Health and Human Service Agency 
Reports and Reviews  
Public Health Agency Reports and Reviews 
Food and Drug Administration 
OwnershipBut Not Physical Movementof Selected Drugs Can Be Traced Through the Supply 
Chain (OEI-05-17-00460), February 2020 
Drug product tracing records required by the DSCSA do not always include information about the 
drugs owner or the drugs physical path through the supply chain.  Knowing which trading partner 
owns a drug, where it is in the supply chain, and where it has been can help investigators from FDA 
do the following: ensure that a potentially dangerous drug is removed the drug supply; identify 
breaches; and protect patients from harmful, ineffective, and illegitimate drugs.  FDA concurred 
with all of our recommendations, which were: 
 
  Follow up with the wholesale distributor that did not provide tracing information to OIG, 
  Provide educational outreach to trading partners about required tracing information for 
drug products and data standardization guidelines, and 
  eek legislative authority to include information about a drug products complete physical 
path through the supply chain on drug product tracing information. 
 
Indian Health Service 
Indian Health Service Has Strengthened Patient Protection Policies but Must Fully Integrate Them 
Into Practice and Organizational Culture (OEI-06-19-00330), December 2019 
In recent years, IHS has had a number of cases of health care providers abusing patients under 
facility care, including a pediatrician who was convicted of multiple counts of child sexual abuse.  In 
early 2019, IHS updated its policies to prevent and address child sexual abuse by providers.  We 
found that IHS policies are consistent with those of other health care organizations, but the policies 
have coverage gaps and are still early in implementation.  IHS concurred with our 
recommendations, which were: 
 
  Extend policies to address more types of perpetrators, victims, and abuse; 
  Ensure that the new incident reporting system is effective and addresses risks identified in 
the current system; 
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  Department of Health and Human Services, Office of Inspector General 
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  Designate a central owner in IHS headquarters to ensure clear roles and responsibilities in 
implementing patient protection policies, and responding to abuse reports; 
  Continue to actively promote an organizational culture of transparency, and work to 
resolve barriers to staff reporting of abuse; and 
  Conduct additional outreach to Tribal communities to inform them of patient rights, solicit 
concerns, and address barriers to reporting of patient abuse. 
National Institutes of Health 
The National Institutes of Health Submitted OIG Clearance Documents for Just Over One-Half of Its 
Audit Recommendations, and the Remaining 225 Recommendations Were Unresolved as of 
September 30, 2016 (A-07-19-03236), January 2020  
NIH did not always resolve OIG audit recommendations in a timely manner during FYs 2015 and 
2016.  Specifically, NIH resolved 262 of the 487 audit recommendations that were outstanding 
during FYs 2015 and 2016.  However, it did not resolve 166 of the 262 recommendations           
(63.4 percent) within the required 6-month resolution period.  In addition, as of September 30, 
2016, NIH had not resolved 225 audit recommendations that were past due for resolution.  These 
225 recommendations were procedural and did not involve dollar amounts such as recommended 
disallowances. 
NIH had some policies and procedures in place for audit resolution, and those policies and 
procedures included references to the Federal criteria that require resolution of audit 
recommendations within 6 months of the audit reports issue date.  However, those policies and 
procedures did not differentiate between issuing a management decision (and submitting a related 
clearance document) within the required 6-month resolution period and proceeding with 
corrective action as rapidly as possible.  
NIH concurred with our recommendations that it update its policies and procedures related to the 
audit resolution process, to include issuing management decisions and submitting related 
clearance documents to OIGregardless of whether any corrective action has yet been taken
within the required 6-month resolution period and promptly resolve the 225 outstanding audit 
recommendations that were past due as of September 30, 2016. 
National Institutes of Health Had Information Technology Control Weaknesses Surrounding Its 
Electronic Health Record System (A-18-19-06003), February 2020  
An outside auditor under contract with OIG, CliftonLarsonAllen LLP (CLA), found that NIH had 
certain controls in place to secure electronic health record (EHR) information and information 
systems.  However, NIH's information security policies and practices were not operating effectively 
to preserve the security, confidentiality, integrity, and availability of NIH's EHR information and 
information systems, resulting in potential risks of unauthorized access, use, disclosure, disruption, 
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modification, or destruction.  At the time of the fieldwork, NIH located its alternative processing 
site in the same geographic location as its primary site, had delayed software upgrades until 
completion of system upgrades had been completed, and had not yet fully implemented the 
automated tool that was intended to ensure that users and inactive accounts were deactivated 
timely.  
NIH concurred with CLAs recommendations that NIH Clinical Center management (1) complete the 
National Institute of Standards and Technology requirements for implementing an alternative 
processing site that is a reasonable and viable option and identify, document, and implement 
actions to mitigate risks of using existing alternative sites until a compliant alternative site is 
established; (2) implement policies and procedures to ensure all software is upgraded or replaced 
prior to end of life; and (3) ensure that the automated Clinical Research Information System User 
Account Management tool is operating so that all changes to user privileges are authorized and 
properly documented, and that inactive accounts are deactivated. 
NIH Has Acted To Protect Confidential Information Handled by Peer Reviewers, But Could Do More 
(OEI-05-19-00240), March 2020 
We found that NIH has policies and procedures to protect the confidentiality of the peer-review 
process, that it takes action against reviewers who disclose information, and that it actively 
responds to instances of suspected undue foreign influence in peer review.  However, we 
concluded that NIH can do more to systemically and directly address concerns about foreign 
threats to the confidentiality of the peer-review process.  NIH concurred with all of our 
recommendations, which were for it to:  
 
  conduct targeted, risk-based oversight of peer reviewers using analysis of information 
about threats to research integrity; 
  update its training materials routinely to include information about breaches of peer 
reviewer confidentiality and possible undue foreign influence; 
  require all peer reviewers to attend periodic trainings about peer review integrity; and 
  consult with Federal law enforcement and national security experts to determine what 
additional steps it might take to identify and address potential risks to confidentiality of the 
peer-review process, including possible undue foreign influence. 
 
Substance Abuse and Mental Health Services Administration 
Geographic Disparities Affect Access to Buprenorphine Services for Opioid Use Disorder (OEI-12-17-
00240), January 2020 
Among the approximately 1,100 U.S. counties identified by OIG as having the greatest need for 
opioid use disorder treatment services, 56 percent likely had inadequate capacity to treat patients 
with buprenorphine in an office setting.  This finding indicates that waivered providers may not 
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  Department of Health and Human Services, Office of Inspector General 
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always be found in the areas where access to treatment is most critical.  Furthermore, although the 
number of providers obtaining waivers to prescribe buprenorphine has increased significantly since 
2002, this figure likely overstates the availability of buprenorphine treatment in these settings due 
to (1) providers not treating up to their approved patient-limit capacity (i.e., up to 30, 100, or 275 
patients) and (2) waivered providers are not evenly distributed across the nation.  MAT couples 
medication (such as buprenorphine, methadone, or naltrexone) with counseling and behavioral 
therapies to treat opioid use disorder.  The Buprenorphine Waiver Program allows qualified 
providers to prescribe buprenorphine to patients in office settings rather than limiting this service 
to specialized opioid treatment programs.  SAMHSA concurred with our recommendation to target 
its efforts to increase the participation of waivered providers in high-need counties.   
 
SAMHSAs Oversight of Accreditation Bodies for Opioid Treatment Programs Did Not Comply With 
Some Federal Requirements (A-09-18-01007), March 2020  
SAMHSA performed inspections at selected OTPs but did not (1) meet its goal for the number of 
OTPs it would inspect, (2) take actions to address accreditation bodies' noncompliance with survey 
requirements, or (3) determine whether OTPs complied with the Federal standards when patient 
charts were incomplete.  In addition, SAMHSA reviewed accreditation bodies' survey reports, but 
the reports were inconsistent and did not contain sufficient information to determine whether the 
OTPs met the Federal standards.  Finally, SAMHSA's evaluations of accreditation bodies' 
accreditation elements were not documented or retained.  (An example of an accreditation 
element would be accredited OTPs' commitment to continually improving their organizations and 
service delivery to the people served.)  Without improved oversight and proper documentation of 
its evaluations, SAMHSA may not be able to adequately evaluate the performance of accreditation 
bodies and ensure that OTPs are meeting the Federal opioid treatment standards.  
SAMHSA concurred with our recommendations that it identify steps it can take to ensure that it 
meets its goal for the number of OTPs it inspects each year, review the results of its inspections 
and take action to address accreditation bodies noncompliance with survey requirements, ensure 
that its compliance officers follow the Compliance Audit Guidance, work with the accreditation 
bodies to standardize the survey reports to include not only surveyor teams information but also 
OTPs compliance with each of the Federal opioid treatment standards, and comply with Federal 
regulations and HHS policy for documenting and retaining its evaluations of accreditation 
elements.  
 
States Use of Grant Funding for a Targeted Response to the Opioid Crisis (OEI-BL-18-00460), March 
2020 
More than $300 million of grant funding for the State Targeted Response to the Opioid Crisis grant 
program (STR grant program) remained unspent after 2 years.  Fourteen States spent less than half 
of their grant allocations.  All but six States requested extensionsknown as no-cost 
extensionsthat will allow them additional time to use their STR funding.  Although States 
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  Department of Health and Human Services, Office of Inspector General 
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reported using their STR grants to expand access to treatment, SAMHSA did not track how many 
patients received MAT, the primary form of evidence-based treatment.  With an average of 130 U.S. 
opioid-overdose deaths per day, it is paramount that SAMHSA and its State partners quickly and 
effectively use Federal grant dollars to expand access to MAT.  Given the lack of data, it is unclear 
how successful the STR grant program was at achieving its goal of expanded access to MAT.  
SAMHSA concurred with all of our recommendations, which were for it to:  
 
  work closely with States and territories during the no-cost extension period to address 
barriers to timely spending and to ensure that administrative cost caps are not exceeded 
and  
  require States that receive grants for OUD treatment to specifically report how many 
patients are receiving MAT.  
 
Human Services Agency Reports and Reviews 
Administration for Children and Families 
New York State Claimed Federal Reimbursement for Unallowable Childcare Subsidies Paid to New 
York City (A-02-17-02010), October 2019 
New York State claimed Federal reimbursement for childcare subsidy payments made to New York 
City that did not comply with Federal and State requirements.  Specifically, for 209 of our 210 
sampled beneficiary-years, New York State paid New York City for partially unallowable childcare 
subsidies related to (1) excessive program closure days or (2) the incorrect application of families 
calculated contributions toward childcare.  On the basis of our sample results, we estimated that 
New York State claimed Federal reimbursement of $24.7 million related to these unallowable 
payments.  
During our audit period, New York City did not have controls in place to prevent these unallowable 
payments. New York City officials stated that they implemented controls to prevent these errors 
from occurring after our audit period.  The officials also stated that, for the final year of our 3-year 
audit period, they manually corrected claims by applying families calculated contributions toward 
childcare subsidies.  
New York State, which is responsible for overseeing its Child Care and Development Fund (CCDF) 
program, did not detect these claiming issues because its childcare subsidy reviews focused on 
program eligibility, not on New York Citys claims for subsidy payments.  
New York State concurred with our recommendations that it refund $24.7 million in unallowable 
childcare subsidies claimed for Federal reimbursement and ensure that New York Citys recently 
implemented CCDF program controls are properly functioning. 
58 
 
 
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Wateree Community Actions, Inc., Made Improvements but Still Requires Monitoring                      
(A-04-19-08069), February 2020 
 
Our prior audit (A-04-14-04026) of Wateree Community Actions, Inc. (Wateree), for FYs 2012 and 
2013, found that Wateree improperly managed some Federal funds related to HHS programs.  
Wateree continued to experience financial management problems related to its Federal programs 
because it misallocated funds or claimed duplicate Head Start program costs in violation of Federal 
requirements, did not meet its non-Federal match requirement for Head Start, and continued to 
file Federal and non-Federal reports inaccurately or late.  However, Wateree resolved one prior OIG 
audit finding and improved its financial condition. 
 
These deficiencies occurred because Wateree did not have adequate cash management or other 
controls.  As a result, Wateree mismanaged $354,597 in Federal funds, is subject to a Federal funds 
disallowance of $252,591, and may incur other administrative actions from ACF. 
 
Since the end of our audit period, Wateree has taken steps to improve its cash management 
system.  After the initiation of our audit, Wateree repaid the unallowable amount. 
 
Although Wateree did not directly agree or disagree with our recommendations, it described 
actions taken or processes implemented to (1) monitor the non-Federal match it is receiving 
throughout the budget year and, if needed, either request a waiver from ACF immediately upon 
determining that it cannot meet its match requirements or adjust its Federal funds grant 
expenditures accordingly and (2) ensure adequate controls are in place to prevent invoicing both 
Head Start and the U.S. Department of Agricultures Child Nutrition programs for the same 
expenses.  We also made two procedural recommendations.   
 
Opportunities for Williamson and Burnet Counties Had Ineffective Accounting Controls and Used 
Unapproved or Questionable Cost Allocation Methods (A-06-18-02002), February 2020  
 
Opportunities for Williamson and Burnet Counties (Opportunities) did not always account for costs 
in accordance with Federal regulations.  Specifically, Opportunities drew down grant funds without 
an immediate cash need; did not track expenses in a way that provided for accurate, current, and 
complete disclosure of the financial results of each Federal program; did not maintain internal 
controls necessary to provide reasonable assurance that expenses were approved in accordance 
with internal policies; used unapproved methods to allocate shared costs; and did not allocate 
indirect costs to programs relative to the benefits received.  In addition, Opportunities claimed 
some unallowable costs. 
 
Opportunities agreed with our recommendations that it (1) implement procedures designed to 
ensure that Federal funds are drawn down only in the amounts needed to meet the immediate 
cash requirements of its Community Service Block Grant and Low Income Home Energy Assistance 
Program-related activities; (2) train its employees to properly use accounting software and follow 
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policies and procedures for approval of expenses; (3) work with Cost Allocation Services to either 
be released from the existing indirect cost rate or negotiate a current indirect cost rate for claiming 
future indirect costs; (4) develop and implement a reasonable basis to allocate meal costs, kitchen 
salaries, and central office expenses between the Head Start and Senior Nutrition programs in 
accordance with the benefits received; and (5) refund $3,207 in unallowable costs.   
 
Communication and Management Challenges Impeded HHSs Response to the Zero-Tolerance Policy 
(OEI-BL-18-00510), March 2020 
 
Poor interagency communication and internal management decisions that failed to protect 
childrens interests left HHS unprepared for the zero-tolerance policy.  This lack of preparation 
impeded HHSs ability to identify, care for, and reunify separated children.  ACF needs to address 
the management concerns that we identified to improve its operation of the UAC Program.  ACF 
concurred with our recommendations, which were to:   
 
  take steps to ensure that childrens interests are prioritized and represented in decisions 
affecting the UAC Program, both internally and when engaging with interagency partners; 
  modify or pursue formal agreements with DHS and the DOJ to ensure that it is receiving 
information that supports its operation of and ability to provide care for children in the 
UAC Program; 
  improve communication to care provider facilities regarding interim guidance, operational 
directives, and other instructions that are not immediately available in published policy 
documents; and 
  further improve its ability to identify and track separated children by reducing reliance on 
manual processes.   
 
 
 
 
   
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Legal and Investigative Activities Related to 
Public Health and Human Service Agencies 
Health Education Assistance Loan Program Exclusions 
OIG excludes from Federal health care programs individuals who have defaulted on Health Education 
Assistance Loan (HEAL) loans.  Under the HEAL program, which stopped making loans in 1998, the Health 
Resources and Services Administration (HRSA) guaranteed commercial loans to students seeking 
education in health-related fields.  The students can defer repayment of the loans until after they graduate 
and begin to earn income.  Although HHSs Program Support Center (PSC) takes steps to ensure 
repayment, some loan recipients do not resolve their debt.  After PSC has exhausted efforts to secure 
repayment of a debt, it declares an individual in default.  The Social Security Act permits that thereafter, 
such individuals may not receive reimbursement under Medicare, Medicaid, and all other Federal health 
care programs for nonpayment of the loans. 
 
During this semiannual reporting period, 12 individuals and related entities were excluded because of a 
PSC referral of their cases to OIG.  Individuals who have been excluded because of default may enter into 
settlement agreements whereby the exclusions are stayed while they pay specified amounts each month to 
satisfy their debts.  If they default on these settlement agreements, they may be excluded until the entire 
debt is repaid, and they may not appeal the exclusions.   
 
After being excluded for nonpayment of their HEAL debts, 2,823 individuals chose to enter into settlement 
agreements or completely repay their debts.  That figure includes 19 individuals who entered into such 
settlement agreements or completely repaid their debts.  More than $228.3 million is being repaid through 
settlement agreements or through complete repayment.  Of that amount, almost $3.6 million is 
attributable to this semiannual reporting period. 
 
The following examples are settlement agreements.  These practitioners entered into settlement 
agreements to repay the amounts indicated: 
 
  CaliforniaDrew Danchisin, Chiropractor$123,326 
 
  New JerseyKyunghoon Jung, Dentist$146,040 
 
 
 
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Child Support Enforcement Activities 
OIG Investigations 
OIG investigates noncustodial parents who violate 18 U.S.C.  228 by failing to pay court-ordered 
child support.  OIG works with ACFs Office of Child Support Enforcement; DOJ; U.S. Attorneys 
Offices; the U.S. Marshals Service; and Federal, State, and local partners to address egregious child 
support enforcement cases with appropriate law enforcement and prosecutorial action.  During this 
semiannual reporting period, OIG investigations of child support enforcement cases nationwide 
resulted in one criminal action and court-ordered restitution and settlement of $50,590.   
 
 
Engaging the Public in Capturing Deadbeat Parents 
Because of the success of OIGs Most Wanted Fugitives website, OIG launched its Most Wanted 
Deadbeat Parents website.  The site identifies parents who fail to pay court-ordered child support 
for their children and thereby put an unnecessary strain on the custodial parents and the children 
as well as on agencies that enforce these matters.  The site, which is updated frequently, includes 
information on OIGs role in pursuing parents who fail to pay court-ordered child support.  OIGs 
Most Wanted Deadbeat Parents website can be found at https://oig.hhs.gov/fraud/child-support-
enforcement/index.asp. 
   
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Other HHS-Related Reviews and Investigative 
Activities 
General Departmental 
Risk Assessment of HHS Grant Closeout Procedures (A-04-19-08072), March 2020 
 
We determined that an audit of HHSs grant closeout process is not warranted at this time.  
Overall, the risk that HHS will not meet Federal requirements for grant closeouts is low.  The Office 
of Assistant Secretary for Financial Resources (ASFR) and the HHS OpDivs have responded to the 
Grants Oversight and New Efficiency Act requirements by taking significant steps to reduce the 
HHS-wide backlog of open but expired grants and implementing controls to address the risk of a 
recurrence of the backlog.  Nevertheless, HHS still faces some challenges in mitigating the risks 
associated with grant closeouts.  Overall, we identified five sub-risk areas as low risk, three as 
moderate risk, one as high risk, and zero as critical. 
 
ASFR agreed with our recommendations that it work with Payment Management System (PMS) 
personnel to improve HHS OpDiv grant management offices access to timely data; work with 
OpDivs to ensure that personnel are trained in how to obtain and interpret the PMS reports 
available to them; continue the grant remediation process to close remaining pooled accounts; 
work with CMS to implement an electronic grant management system for the Center for Medicaid 
and Childrens Health Insurance Program Services (CMCS) and the Center for Clinical Standards 
and Quality, assign clear roles and responsibilities related to grant closeout activities at CMCS, and 
clarify CMCSs ability to close out its grants; and consider revising HHS regulations and the HHS 
Grants Policy Administrative Manual to align closeout time limits for OpDivs with those specified in 
Federal regulations. 
 
Grants and Contracts 
HHS is the largest grant-making organization and one of the largest contracting agencies in the Federal 
Government.  In FY 2019, HHS awarded more than $559 billion in grants and over $26 billion in contracts 
across all program areas.  OIGs direct annual discretionary appropriation funding is used to conduct 
program integrity and enforcement activities with regard to the more than 100 public health and human 
services programs carried out by more than 80,00 employees around the world.  The size and scope of 
departmental awards make their operating effectiveness crucial to the success of programs designed to 
improve the health and well-being of the public. 
 
Grant Fraud Investigations 
The following case examples relate to misuse of grant funds: 
63 
 
 
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MichiganVan Andel Research Institute (VARI) agreed to pay $5.5 million to resolve allegations 
that it violated the False Claims Act by submitting Federal grant applications and progress reports 
to NIH in which VARI failed to disclose Chinese government grants that funded two VARI 
researchers.  The settlement further resolves allegations that in a December 21, 2018, letter, VARI 
made certain factual representations to NIH with deliberate ignorance or reckless disregard for 
the truth regarding the Chinese grants.  VARI is an independent research institute in Grand 
Rapids, Michigan.  
 
PennsylvaniaDr. Melanie Millholland was sentenced for her role in a scheme to misuse Federal 
grant funds.  Between March 2015 and July 2017, Millholland was an employee of Phelix 
Therapeutics LLC, a company receiving NIH grant funding.  From about January 2017 to about 
June 2017, Millholland embezzled approximately $383,790 from the company by forging checks 
and fabricating invoices. Millholland pleaded guilty to embezzlement from an organization 
receiving Federal benefits and was sentenced to 5 years of probation, which includes 6 months of 
home detention and 500 hours of community service.  Additionally, Millholland was ordered to 
pay restitution of $343,790 and a $100 assessment. 
 
Small Business Innovative Research Program  
The National Defense Authorization Act for Fiscal Year 2012,  5143, requires OIG to report annually 
on the number of cases referred to OIG to fraud, waste, or abuse in the Small Business Innovation 
Research/ Small Business Technology Transfer (SBIR/STTR) program.  OIG must also report on the 
actions taken in each case; justification for not taking action on a case; and an accounting of funds 
used to address waste, fraud, and abuse in this program.  In our December 2019 report delivered to 
the three congressional oversight committees, we reported that OIG spent approximately $278,733 
in salaries on oversight related to the SBIR/STTR program. 
 
Recovery Act Retaliation Complaint Investigations  
The Recovery Act,  1553, prohibits non-Federal employers that have received Recovery Act 
funding from retaliating against employees who disclose evidence of mismanagement of Recovery 
Act funds or any violation of law related to Recovery Act funds.  OIGs are required to include in 
their Semiannual Report the retaliation complaint investigations that they decided not to conduct 
or continue during the reporting period.  During this semiannual reporting period, OIG did not 
close, decline, or give extensions on any investigations of whistleblower retaliation. 
 
Contract Audits 
Pursuant to the National Defense Authorization Act for FY 2008,  845, OIGs appointed under the 
Inspector General Act of 1978 are required to submit, as part of their semiannual report, pursuant 
to section 5 of the Inspector General Act, information on final completed contract audit reports 
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issued during the period to the contracting activity.  This information must contain significant audit 
findings.  OIG issued no final reports meeting  845 criteria during this semiannual period. 
 
OIG Reviews of Non-Federal Audits  
OIG reviews audits conducted by non-Federal auditors of entities receiving Federal awards.  During 
this semiannual reporting period, OIGs National External Audit Review Center reviewed 270 
reports covering $471.6 billion in audited costs.  Federal dollars covered by these audits totaled 
$92.6 billion, of which about $45.3 billion were HHS funds. 
Uniform guidance at 2CFR200 Subpart F establishes audit requirements for State and local 
governments, colleges and universities, and nonprofit organizations receiving Federal 
awards.  Under the uniform guidance, covered entities must conduct annual organization-wide 
single audits of all Federal money they receive.  These audits are conducted by non-Federal 
auditors, such as public accounting firms and State auditors.  OIG reviews the quality of these 
audits and assesses the adequacy of the entities management of Federal funds. 
OIGs oversight of non-Federal audit activity informs Federal managers about the soundness of 
management of Federal programs and identifies any significant areas of internal control weakness, 
noncompliance, and questioned costs for resolution or followup.  We identify entities for high-risk 
monitoring, alert program officials to any trends that could indicate problems in HHS programs, 
and profile non-Federal audit findings of a particular program or activity over time to identify 
systemic problems.  We also provide training and technical assistance to grantees and members of 
the auditing profession.  OIG maintains a process to assess the quality of the non-Federal reports 
received and the audit work that supports the selected reports. 
OIGs reports on non-Federal audits reviewed during this reporting period are categorized in the 
following table. 
 
Non-Federal Audits, October 1, 2019, Through March 31, 2020 
 
Not requiring changes or having minor changes   255 
Requiring major changes  11 
Having significant technical inadequacies  4 
Total Number of Non-Federal Audits  270 
 
65 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Other Reporting Requirements and Reviews  
Legislative and Regulatory Reviews  
Pursuant to the Inspector General Act,  4(a)(2), OIG is required to review existing and proposed 
legislation and regulations relating to HHSs programs and operations and make recommendations 
concerning their impact on economy and efficiency or the prevention and detection of fraud and 
abuse.  Most audits and other reviews that we conduct are designed to test compliance with 
and/or assess the administration and oversight of existing laws and regulations.  Our reports of 
such reviews describe findings, which include questioned costs, inefficiencies, vulnerabilities to 
fraud, inconsistencies, errors in application, or weaknesses in oversight or supporting systems.  Our 
corresponding recommendations tell HHS and its operating or staff divisions what administrative, 
regulatory, or legislative actions we believe are needed to effectively respond to the findings.  Our 
regularly published core publications reflect the relationship between our work and laws and 
regulations. 
 
  This report, like our previous Semiannual Reports to Congress, describes findings and 
recommendations from recently completed reviews, many of which focus on existing laws and 
regulations.   
  Our Solutions To Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations describes priority findings and recommendations from past periods that 
remain to be implemented.   
  Our Work Plan provides citations to laws and regulations that are the subject of ongoing or 
future reviews. 
We also review proposed legislation and regulations related to HHS programs and operations.  In 
addition, we provide independent, objective technical assistance on a bipartisan, bicameral basis to 
congressional committees and members who request it. 
   
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Appendix A: Questioned Costs and Funds To 
Be Put to Better Use 
The following tables summarize OIGs monetary recommendations and HHS responses to them.  This 
information is provided in accordance with the Inspector General Act,  5(a)(8) and (a)(9) (5 U.S.C. App.  
5(a)(8) and (a)(9)), and the Supplemental Appropriations and Rescissions Act of 1980.  
 
Audit Reports With Questioned Costs 
As defined by the Inspector General Act, the term questioned cost means a cost that is questioned by 
OIG because of (1) an alleged violation of a provision of law, regulation, contract, grant, cooperative 
agreement, or other agreement or document governing the expenditure of funds; (2) a cost that is not 
supported by adequate documentation at the time of the audit; or (3) the expenditure of funds for the 
intended purpose is unnecessary or unreasonable.  Questioned costs that HHS program officials have, in a 
management decision, sustained or agreed should not be charged to the Government are disallowed 
costs.  Superscripts indicate end notes that follow the tables below. 
 
Table 1: Audit Reports With Questioned Costs 
Number 
of  Dollar Value 
Description  Reports  Dollar Value Questioned  Unsupported 
Section 1          
Reports for which no 
management decisions had 
been made by the beginning 
of the reporting period1  86  $2,265,038,000  $563,160,000 
Issued during the reporting 
period  40  $288,390,000  $0 
Total Section 1  126  $2,553,428,000  $563,160,000 
Section 2        
Reports for which 
management decisions were 
made during the reporting 
period2, 3        
Disallowed costs  53  *$605,182,000  $7,020,000 
Costs not disallowed  2  $13,078,000  $0 
Total Section 2  55  $618,260,000  $7,020,000 
* Audit receivables (expected recoveries)       
Section 3       
67 
 
 
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Reports for which no 
management decisions had 
been made by the end of the 
reporting period 
(Section 1 minus Section 2)  71  $1,935,168,000  $556,140,000 
Section 4       
Reports for which no 
management decisions were 
made within 6 months of   
issuance4  37  $1,661,273,000  $556,140,000 
 
Table 1 End Notes 
1 The opening balance was adjusted upward by $59.1 million because of a reevaluation of previously issued 
recommendations.  
2 Revisions to previously reported management decisions: 
  A-05-07-00036, Wisconsin Improperly Claimed Federal Medicaid Reimbursement for Most Residential 
Care Center Payments.  Subsequent review by CMS determined that the original finding amount was 
allowable resulting in a decreased previously sustained amount by $22,839,628. 
 
  A-06-15-00041, Texas Did Not Appropriately Spend Some State Balancing Incentive Payments Program 
Funds.  Subsequent review by CMS determined that the original finding amount was allowable 
resulting in a decreased previously sustained amount by $11,982,826. 
 
  A-03-17-00005, University of Wisconsin Hospital and Clinics Authority Incorrectly Billed Medicare 
Inpatient Claims With Severe Malnutrition.  Subsequent review by CMS determined that the original 
finding amount was partially allowable resulting in a decreased previously sustained amount by 
$1,873,716. 
 
  A-05-15-00044, Medicare Compliance Review of NorthShore University Health System For 2013 And 
2014.  Due to subsequent review by CMS and the OIG, the amount sustained was reduced by 
$1,007,913.  
 
  Not detailed are reductions to previously disallowed management decisions totaling $976,000.   
3 Included are management decisions to disallow $33 million in questioned costs that were identified by 
non-Federal auditors in audits of State and local governments, colleges and universities, and nonprofit 
organizations receiving Federal awards conducted in accordance with Office of Management and Budget 
Circular A-133.  OIG is currently ensuring that work performed by these non-Federal auditors complies with 
Federal audit standards; accordingly, OIG tracks, resolves, and reports on recommendations in these audits. 
4 Because of administrative delays, some of which were beyond management control, resolution of the 
following 37 audits were not completed within 6 months of issuance of the reports; however, agency 
68 
 
 
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management has informed us that the agency is working to resolve the outstanding recommendations 
before the end of the next semiannual reporting period. 
 
Audits Not Completed Within 6 Months of Issuance 
Audit CIN  Audit Title 
A-02-15-02013  CMS Did Not Always Accurately Authorize Financial Assistance Payments to Qualified 
Health Plan Issuers in Accordance With Federal Requirements During the 2014 Benefit 
Year, August 2018, $939,287,686 
A-02-15-01010  New Jersey Claimed Hundreds of Millions in Unallowable or Unsupported Medicaid 
School-Based Reimbursement, November 2017, $300,452,930 
A-02-14-02017  New York Misallocated Costs to Establishment Grants for a Health Insurance 
Marketplace, November 2016, $149,654,512 
A-02-16-01022  New York May Not Have Complied With Federal and State Requirements Prohibiting 
Medicaid Payments for Inpatient Hospital Services Related to Provider-Preventable 
Conditions, May 2019, $50,256,025 
A-09-17-03035  Medicare Improperly Paid Suppliers for Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies Provided to Beneficiaries During Inpatient Stays, November 
2018, $34,014,796 
A-02-16-02007  Lincoln Hall Boys Haven, an Administration for Children and Families Grantee, Did Not 
Always Comply With Applicable Federal and State Policies and Requirements, February 
2019, $29,807,160 
A-01-14-02503  Maryland Misallocated Millions to Establishment Grants for a Health Insurance 
Marketplace, March 2015, $28,400,000 
A-04-14-07050  Kentucky Misallocated Millions to Establishment Grants for a Health Insurance 
Marketplace, February 2017, $25,530,429 
A-02-15-02008  New York Did Not Comply With Federal Grant Requirements for Allocating and 
Claiming Marketplace Contract Costs, December 2017, $20,415,344 
A-01-17-00506  Medicare Paid Twice for Ambulance Services Subject to Skilled Nursing Facility 
Consolidated Billing Requirements, February 2019, $19,979,573 
A-07-15-04226  Not All of Missouri's Child Care Subsidy Program Payments Complied With Federal and 
State Requirements, November 2017, $19,076,167 
A-01-15-02500  Vermont Did Not Properly Allocate Millions to Establishment Grants for a Health 
Insurance Marketplace, September 2016, $11,243,006 
A-02-14-02024  Newark Preschool Council, Inc., Did Not Always Comply With Head Start Requirements, 
February 2017, $9,950,556 
A-05-18-00030  Illinois Claimed Unallowable Federal Reimbursement for Some Medicaid Physician-
Administered Drugs, June 2019, $4,065,188 
A-02-16-02013  The Children's Village Inc., an Administration for Children and Families Grantee, Did 
Not Always Comply With Applicable Federal and State Policies and Requirements, April 
2019, $2,623,785 
A-07-17-02808  The Colorado Health Insurance Marketplaces Financial Management System Did Not 
Always Comply With Federal Requirements, July 2018, $2,567,604 
69 
 
 
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A-02-17-02009  New York Did Not Provide Adequate Stewardship of Substance Abuse Prevention and 
Treatment Block Grant Funds, March 2019, $1,800,212 
A-07-19-00564  National Government Services, Inc., Claimed Some Unallowable Medicare Pension 
Costs Through Its Incurred Cost Proposals, September 2019, $1,780,718 
A-07-11-06013  The University of Colorado Denver Did Not Always Claim Selected Costs Charged 
Directly to Department of Health and Human Services Awards in Accordance with 
Federal Regulations, June 2013, $1,419,524 
A-05-14-00045  The Minnesota Marketplace Misallocated Federal Funds and Claimed Unallowable 
Costs, November 2016, $1,279,677 
A-01-18-02501  Vermonts Office of Child Support Needs Better Oversight of Its Administrative Costs 
Claimed, September 2019, $1,058,309 
A-07-19-00572  National Government Services, Inc., Claimed Some Unallowable Medicare Nonqualified 
Plan Costs Through Its Incurred Cost Proposals, September 2019, $971,820 
A-09-14-01007  Nevada Misallocated Costs for Establishing a Health Insurance Marketplace to Its 
Establishment Grants, February 2016, $893,464 
A-05-16-00038  Heartland Human Care Services, Inc. Generally Met Safety Standards, but Claimed 
Unallowable Rental Costs, September 2018, $768,460 
A-06-16-07007  BCFS Health and Human Services Did Not Always Comply With Federal Requirements 
Related to Less-Than-Arm's-Length Leases, February 2018, $658,248 
A-07-18-04106  The Fort Peck Assiniboine and Sioux Tribes Improperly Administered Some Low-Income 
Home Energy Assistance Program Funds for Fiscal Years 2011 Through 2015, August 
2018, $436,765 
A-07-19-00561  Group Health Incorporated Understated Its Emblem Health Services Company, LLC, 
Employees' Retirement Plan Medicare Segment Pension Assets as of January 1, 2015, 
July 2019, $432,584 
A-07-19-00563  National Government Services, Inc., Claimed Some Unallowable Medicare Nonqualified 
Plans Costs Through Its Final Administrative Cost Proposals, September 2019, $426,123 
A-07-19-00557  Group Health Incorporated Understated Its Cash Balance Pension Plan Medicare 
Segment Pension Assets as of January 1, 2011, July 2019, $366,763 
A-04-13-01024  The University of North Carolina at Chapel Hill Did Not Always Claim Selected Costs 
Charged Directly to Department of Health and Human Services Awards in Accordance 
With Federal Requirements, June 2014, $352,843 
A-09-17-01002  Florence Crittenton Services of Orange County, Inc., Did Not Always Claim Expenditures 
in Accordance With Federal Requirements, October 2018, $342,263 
A-12-17-00002  The Office of the Secretary of Health and Human Services Did Not Comply With 
Federal Regulations for Chartered Aircraft and Other Government Travel Related to 
Former Secretary Price, July 2018, $341,616 
A-07-19-00565  National Government Services, Inc., Claimed Some Unallowable Medicare 
Supplemental Executive Retirement Plan Costs Through Its Incurred Cost Proposals, 
September 2019, $268,633 
A-05-18-00008  The Next Door Foundation Claimed Unallowable Indirect Costs and Did Not Document 
the Funding Source of Program Expenditures in Accordance With Federal 
Requirements, September 2019, $142,104 
A-06-11-00058  Crowleys Ridge Development Council, Inc., Claimed Unallowable Costs Under a 
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Recovery Act Grant, August 2012, $115,420 
A-04-17-07069  Medicare Payments to Providers for Polysomnography Services Did Not Always Meet 
Medicare Billing Requirements, June 2019, $56,668 
A-07-18-00551  National Government Services, Inc., Claimed Some Unallowable Supplemental 
Executive Retirement Plan Costs Through Its Final Administrative Cost Proposals, 
September 2019, $36,524 
TOTAL CINS: 37  
TOTAL AMOUNT: $1,661,273,000 
 
 
Audit Reports With Funds Recommended To Be Put to Better Use 
The phrase recommendations that funds be put to better use means that funds could be used more 
efficiently if management took action to implement an OIG recommendation through reductions in 
outlays, deobligation of funds, and/or avoidance of unnecessary expenditures.  Table 2 reports HHS 
program officials decisions to take action on these audit recommendations.   
 
Table 2: Audit Reports With Funds Put to Better Use 
Number of 
Description  Reports  Dollar Value 
Section 1       
Reports for which no management decisions had been made by 
the beginning of the reporting period  9  $15,625,113,000 
Reports issued during the reporting period  8  $911,270,000 
Total Section 1  17  $16,536,383,000 
Section 2     
Reports for which management decisions were made during the 
reporting period     
Value of recommendations agreed to by management     
Based on proposed management action  4  $144,131,000 
Based on proposed legislative action  0  $0 
Value of recommendations not agreed to by management    $0 
Total Section 2  4  $144,131,000 
Section 3     
Reports for which no management decisions had been made by 
the end of the reporting period1 (Sec. 1 minus Sec. 2)  13  $16,392,252,000 
 
Table 2 End Notes 
1 Because of administrative delays, some of which were beyond management control, 5 of the 13 audits open at end 
of the period were not resolved within 6 months of issuance of reports.  OIG is working with management to reach 
resolution on these recommendations before the end of the next semiannual reporting period. 
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Audits Open at End of the Period 
 
Audit CIN  Audit Title 
 
A-05-12-00020  Medicare And Beneficiaries Could Save Billions If CMS Reduces Hospital Outpatient 
  Department Payment Rates for Ambulatory Surgical Center-Approved Procedures to 
Ambulatory Surgical Center Payment Rates, April 2014, $15,000,000,000 
 
A-04-17-07069  Medicare Payments to Providers for Polysomnography Services Did Not Always Meet 
  Medicare Billing Requirements, June 2019, $269,768,285 
  A-06-17-08004  Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A 
Hospice Benefit, August 2019, $160,800,000 
 
A-03-13-03002  HHS Did Not Identify and Report Antideficiency Act Violations, May 2017, $49,445,025 
 
A-09-18-03030  Medicare Incorrectly Paid Providers for Emergency Ambulance Transports From 
  Hospitals to Skilled Nursing Facilities, September 2019, $968,718 
  TOTAL CINS: 5 
TOTAL AMOUNT: $15,480,982,000 
 
   
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  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
Appendix B: Peer-Review Results 
The Inspector General Act of 1978, as amended, requires OIGs to report the results of peer reviews of their 
operations conducted by other OIGs, the date of the last peer review, outstanding recommendations from 
peer reviews, and peer reviews conducted by an OIG of other OIGs in the semiannual period.  Peer reviews 
are conducted by member organizations of the Council of the Inspectors General on Integrity and 
Efficiency (CIGIE).   
 
Office of Audit Services  
During this semiannual reporting period, no peer reviews involving OAS were completed.  Information 
concerning OASs peer-review activity during a prior reporting period is also listed below. 
 
OAS  Date  Reviewing Office  Office Reviewed 
April 2019  HHS-OIG, OAS  U.S. Department of 
Transportation (DOT) OIG 
The system of quality control for the audit organization of DOT OIG in effect for the year ending 
September 30, 2018, has been suitably designed and complied with to provide DOT OIG with 
reasonable assurance of performing and reporting in conformity with applicable professional 
standards in all material respects.  Federal audit organizations can receive a rating of pass, pass 
with deficiencies, or fail.  DOT OIG received a peer-review rating of pass. 
 
OAS  Date  Reviewing Office  Office Reviewed 
March 2018  U.S. Postal Service OIG  HHS-OIG, OAS 
The system of quality control for the audit organization of HHS-OIG in effect for the year ending 
September 30, 2017, has been suitably designed and complied with to provide HHS-OIG with 
reasonable assurance of performing and reporting in conformity with applicable professional 
standards in all material respects.  Federal audit organizations can receive a rating of pass, pass 
with deficiencies, or fail.  HHS-OIG received a peer-review rating of pass. 
 
 
 
 
 
 
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Office of Investigations 
During this semiannual reporting period, no peer reviews involving OI were completed.  Listed below is 
information concerning OIs peer-review activities during prior reporting periods. 
 
OI  Date  Reviewing Office  Office Reviewed 
  October 2018  SSA OIG  HHS-OIG, OI 
The system of internal safeguards and management procedures for the investigative function of 
HHS-OIG in effect for the year ending September 30, 2018, was in full compliance with the quality 
standards established by CIGIE and the Attorney Generals guidelines. 
 
OI  Date  Reviewing Office  Office Reviewed 
  August 2017  HHS-OIG, OI  U.S. Postal Service OIG 
The system of internal safeguards and management procedures for the investigative function of 
the U.S. Postal Service OIG in effect for the year ending September 30, 2015, was in full compliance 
with the quality standards established by CIGIE and the Attorney Generals guidelines.  
 
Office of Evaluation and Inspections 
During this semiannual reporting period, no peer reviews involving OEI were completed.  Information 
concerning OEIs peer-review activity during a prior reporting period is also listed below. 
 
OEI  Date  Reviewing Office  Office Reviewed 
September 2019  HHS-OIG, OEI  U.S. Department of Interior 
(DOI) OIG 
The DOI OIG Inspection and Evaluation components policies and procedures mostly met CIGIEs 
Quality Standards for Inspection and Evaluation (Blue Book) standards.  We reviewed four reports: 
two fully met the applicable Blue Book standards and two did not.  DOI OIG concurred with 
recommendations related to Evidence, Planning, and Data Collection and Analysis but did not 
concur with recommendations related to Reporting. 
 
OEI  Date  Reviewing Office  Office Reviewed 
September 2018  HHS-OIG, OEI  U.S. Department of Defense 
(DoD) OIG 
The DoD OIG Inspection and Evaluation components policies and procedures generally met 
CIGIEs Quality Standards for Inspection and Evaluation (Blue Book) standards.  In addition, the 10 
74 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
reports reviewed generally met the applicable Blue Book standards.  Onsite visits for these reviews 
 
were conducted from October 2, 2017, through November 17, 2017. 
75 
 
 
  Department of Health and Human Services, Office of Inspector General 
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Appendix C: Summary of Sanction Authorities 
The Inspector General Act of 1978, as amended, specifies requirements for semiannual reports to be made 
to the HHS Secretary for transmittal to Congress.  A selection of other authorities appears below.  
 
Program Exclusions 
The Social Security Act,  1128 (42 U.S.C.  1320a-7), provides several grounds for excluding individuals and 
entities from participation in Medicare, Medicaid, and other Federal health care programs.  Exclusions are 
required (mandatory exclusion) for individuals and entities convicted of the following types of criminal 
offenses: (1) Medicare or Medicaid fraud; (2) patient abuse or neglect; (3) felonies for other health care 
fraud; and (4) felonies for illegal manufacture, distribution, prescription, or dispensing of controlled 
substances.   
 
OIG is authorized (permissive exclusion) to exclude individuals and entities on several other grounds, 
including misdemeanors for other health care fraud (other than Medicare or Medicaid); suspension or 
revocation of a license to provide health care for reasons bearing on professional competence, 
professional performance or financial integrity; provision of unnecessary or substandard services; 
submission of false or fraudulent claims to a Federal health care program; or engaging in unlawful kickback 
arrangements.  
 
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to 
be made, any false statements or omissions in any application, bid, or contract to participate as a provider 
in a Federal health care program, including managed care programs under Medicare and Medicaid, as well 
as Medicares prescription drug program.  
 
Providers subject to exclusion are granted due process rights.  These include a hearing before an 
administrative law judge and appeals to the HHS Departmental Appeals Board and Federal district and 
appellate courts regarding the basis for and the length of the exclusion.  
 
Civil Monetary Penalties Law 
The CMPL of the Social Security Act, 1128A (42 U.S.C.  1320a 7a), imposes penalties, assessments, and 
exclusion from participation in Federal health care programs for engaging in certain activities.  For 
example, a person who submits, or causes to be submitted, to a Federal health care program a claim for 
items and services that the person knows, or should know, is false or fraudulent is subject to a penalty of 
up to $15,270 for each item or service falsely or fraudulently claimed, an assessment of up to 3 times the 
amount falsely or fraudulently claimed, and exclusion.  
 
For the purposes of the CMPL, should know is defined to mean that the person acted in reckless 
disregard or deliberate ignorance of the truth or falsity of the claim.  The law and its implementing 
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regulations also authorize actions for a variety of other violations, including submission of claims for items 
or services furnished by an excluded person; requests for payment in violation of an assignment 
agreement; violations of rules regarding the possession, use, and transfer of biological agents and toxins; 
and payment or receipt of remuneration in violation of the anti-kickback statute (42 U.S.C.  1320a 7b (b)).   
 
The ACA added more grounds for imposing CMPs.  These include, among other types of conduct, 
knowingly making, or causing to be made, any false statements or omissions in any application, bid, or 
contract to participate as a provider in a Federal health care program (including Medicare and Medicaid 
managed care programs and Medicare Part D); the ACA authorizes a penalty of up to $55,262 for each 
false statement, as well as activities relating to fraudulent marketing by MCOs, their employees, or their 
agents.   
 
The 21st Century Cures Act (enacted on December 13, 2016) added more grounds for imposing CMPs, 
assessments, and exclusion from Federal health care programs for fraudulent conduct in an HHS grant, 
contract, or other agreement.  OIG may assess CMPs of up to $10,000 per claim and assessments of up to 
3 times the amount claimed for knowingly presenting a false or fraudulent claim.  In addition, OIG may 
impose a penalty of up to $50,000 and assessments of up to 3 times the amount of funds at issue: (1) for 
each instance of knowingly making a false statement in a document required to be submitted in order to 
receive funds under an HHS contract, grant, or other agreement; (2) for knowingly making or using a false 
record or statement that is material to a false or fraudulent claim; and (3) for knowingly making or using a 
false record or statement material to an obligation to pay or transmit funds or property owed to HHS.  OIG 
may impose a penalty of up to $10,000 per day and assessments of up to 3 times the amount at issue for 
knowingly concealing, or knowingly and improperly avoiding or decreasing, an obligation owed to HHS 
with respect to an HHS grant, contract, or other agreement.  Finally, HHS-OIG may impose a penalty of up 
to $15,000 per day for failing to grant timely access to OIG upon reasonable request for audits or to carry 
out other statutory functions in matters involving an HHS grant, contract, or other agreement.   
 
Patient Dumping 
The Social Security Act, 1867 (42 U.S.C.  1395dd), provides that when an individual goes to the ER of a 
Medicare-participating hospital, the hospital must provide an appropriate medical screening examination 
to determine whether that individual has an emergency medical condition.  If an individual has such a 
condition, the hospital must provide either treatment to stabilize the condition or an appropriate transfer 
to another medical facility.  
 
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of 
transfer and must ensure that the receiving hospital agrees to the transfer and has available space and 
qualified personnel to treat the individual.  In addition, the transferring hospital must effect the transfer 
through qualified personnel and transportation equipment.  Further, a participating hospital with 
specialized capabilities or facilities may not refuse to accept an appropriate transfer of an individual who 
needs services if the hospital has the capacity to treat the individual.  
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OIG is authorized to collect CMPs of up to $53,484 against small hospitals (fewer than 100 beds) and up to 
$106,965 against larger hospitals (100 beds or more) for each instance in which the hospital negligently 
violated any of the section 1867 requirements.  In addition, OIG may collect a penalty of up to $106,965 
from a responsible physician for each negligent violation of any of the section 1867 requirements and, in 
some circumstances, may exclude a responsible physician.   
 
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities 
The Anti-Kickback Statute 
The anti-kickback statute authorizes penalties against anyone who knowingly and willfully solicits, 
receives, offers, or pays remuneration, in cash or in kind, to induce or in return for: (1) referring an 
individual to a person or an entity for the furnishing, or arranging for the furnishing, of any item or 
service payable under the Federal health care programs; or (2) purchasing, leasing, or ordering, or 
arranging for or recommending the purchasing, leasing, or ordering, of any good, facility, service, 
or item payable under the Federal health care programs (Social Security Act,  1128B(b) (42 U.S.C.  
1320a-7b(b)).  
 
Individuals and entities that engage in unlawful referral or kickback schemes may be subject to 
criminal penalties under the general criminal anti-kickback statute; a CMP under OIGs authority 
pursuant to the Social Security Act,  1127(a)(7) (42 U.S.C.  1320a-7a); and/or program exclusion 
under OIGs permissive exclusion authority under the Social Security Act,  1128(b)(7) (42 U.S.C.  
1320a-7(b)(7)).  
 
The False Claims Act 
Under the False Claims Act, as amended by the False Claims Amendments Act of 1986 (31 U.S.C.  
37293733), a person or an entity is liable for up to treble damages and a penalty between $11,181 
and $22,363 for each false claim it knowingly submits, or causes to be submitted, to a Federal 
program.  Similarly, a person or an entity is liable under the False Claims Act if it knowingly makes 
or uses, or causes to be made or used, a false record or statement to have a false claim paid.  The 
False Claims Act defines knowing to include not only the traditional definition but also instances 
in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the 
information.  Under the False Claims Act, no specific intent to defraud is required.  Further, the 
False Claims Act contains a qui tam, or whistleblower, provision that allows a private individual to 
file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any 
fraud recoveries.  The False Claims Act was again amended in 2009 in response to recent Federal 
court decisions that narrowed the laws applicability.  Among other things, these amendments 
clarify the reach of the False Claims Act to false claims submitted to contractors or grantees of the 
Federal Government.   
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Appendix D: Reporting Requirements in the 
Inspector General Act of 1978 
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following 
table along with the location of the required information.  
 
Section  Requirement  Location 
Section 4 
(a)(2)  Review of legislation and regulations  Other HHS-Related 
Reviews and 
Investigations section   
Section 5 
(a)(1)  Significant problems, abuses, and deficiencies  Throughout this report 
(a)(2)  Recommendations with respect to significant problems,  Throughout this report 
abuses, and deficiencies 
(a)(3)  Prior significant recommendations on which corrective  Solutions To Reduce 
action has not been completed  Fraud, Waste, and Abuse 
in HHS Programs: Top 
Unimplemented 
Recommendations 
(previously known as the 
Compendium of 
Unimplemented 
Recommendations) 
(a)(4)  Matters referred to prosecutive authorities  Legal and Investigative 
Activities Related to the 
Medicare and Medicaid 
Programs section 
(a)(5)  Summary of instances in which information requested by  None for this reporting 
OIG was refused  period 
(a)(6)  List of audit reports  Submitted to the Secretary 
under separate cover 
(a)(7)  Summary of significant reports  Throughout this report 
(a)(8)  Statistical Table 1Reports With Questioned Costs  Appendix A 
(a)(9)  Statistical Table 2Funds Recommended To Be Put to  Appendix A 
Better Use 
(a)(10)  Summary of previous audit reports without management  Appendix A 
decisions, in which no establishment comment was returned 
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Section  Requirement  Location 
within 60 days, and in which there are any outstanding 
unimplemented recommendations 
(a)(11)  Description and explanation of revised management  Appendix A 
decisions 
(a)(12)  Management decisions with which the Inspector General  None for this reporting 
disagrees  period 
(a)(13)  Information required by the Federal Information Security  None for this reporting 
Management Act.   period 
(a)(14)-(16)  Results of peer reviews of HHS-OIG conducted by other  Appendix B 
OIGs or the date of the last peer review, outstanding 
recommendations from peer reviews, and peer reviews 
conducted by HHS-OIG of other OIGs 
(a)(17)  Investigative statistical tables  Appendix E 
(a)(18)  Metrics description for statistical tables  Appendix E 
(a)(19)  Investigations on senior Government employees  Appendix E 
(a)(20)  Description of whistleblower retaliation instances  Appendix E 
(a)(21)  Description of attempts to interfere with OIG independence  Appendix E 
(a)(22)  Description of closed and nondisclosed reports and  Appendix E 
investigations regarding senior Government employees 
 
Other Reporting Requirements 
Section  Requirement  Location 
845  Significant contract audits required to be reported pursuant  Other HHS-Related 
to the National Defense Authorization Act for FY 2008  Reviews and 
(P.L. No. 110-181),  845.  Investigations section 
   205  Pursuant to HIPAA (P.L. No. 104-191),  205, the Inspector  Appendix F 
General is required to solicit proposals annually via a Federal 
Register notice for developing new and modifying existing 
safe harbors to the anti-kickback statute of the Social 
Security Act,  1128(b) and for developing special fraud 
alerts.  The Inspector General is also required to report 
annually to Congress on the status of the proposals received 
related to new or modified safe harbors. 
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Section  Requirement  Location 
1553  Pursuant to the American Recovery and Reinvestment Act of  Other HHS-Related 
2009, P.L. No. 111-5,  1553, OIG reports to Congress the  Reviews and 
retaliation complaint investigations it decided not to 
Investigations section 
conduct or continue during the period. 
 
 
 
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Appendix E: Reporting Requirements in the 
Inspector General Empowerment Act of 2016 
The Inspector General Empowerment Act of 2016 establishes new reporting requirements for the 
Semiannual Reports.  These requirements amend portions of  5 of the Inspector General Act.  The 
requirements are below in italics, followed by OIGs responses.  
 
Each Inspector General shall, not later than April 30 and October 31 of each year, prepare 
semiannual reports summarizing the activities of the Office during the immediately preceding six-
month periods ending March 31 and September 30.  Such reports shall include, but need not be 
limited to- 
(10) A summary of audit, inspection, and evaluation reports issued before the commencement of the 
reporting period- 
(A) for which no management decision has been made by the end of the reporting period (including 
the date and title of each such report), an explanation of the reasons such management decision has 
not been made, and a statement concerning the desired timetable for achieving a management 
decision on each such report;  
 
For audit, inspection, and evaluation reports issued from FY 2011 through FY 2020, OIG had a total 
of 113 reports with overdue final management decisions (FMD) as of the end of this reporting 
period.2  The breakdown of those 113 reports by HHS operating division is as follows: 
 
Operating Division  Overdue FMDs 
ACF   17 
ACL   2 
ASPR   1 
CDC   4 
CMS   48 
FDA   2 
IHS   12 
NIH   7 
OASH   1 
OS   17 
SAMHSA   2 
 
 
2 OIG can track the status of management decisions for all reports back to FY 2011.  OIG can track the status of management 
decisions for audit reports back to FY 1990.  We have identified three additional audit reports (one CMS, one FDA, one OS) with 
overdue management decisions from FY 1990 through FY 2010. 
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OIG is unable to provide reasons and timetables for each of these overdue management decisions, 
due to the volume and that OIG did not historically track this information.  
 
(B) for which no establishment comment was returned within 60 days of providing the report to the 
establishment; and  
 
For draft reports that include recommendations, OIG typically requests establishment comments 
within 30 days.  In some instances, OIG grants extensions when requested and appropriate.  When 
OIG does not receive establishment comments or a request for extension within the 30-day 
timeframe, OIG typically issues the report and notes the lack of establishment comments.   
 
For this semiannual reporting period, OIG had no reports with comments exceeding 60 days.   
 
(C) for which there are any outstanding unimplemented recommendations, including the aggregate 
potential cost savings of those recommendations.  
 
OIG is actively tracking 1,253 unimplemented open recommendations made in reports issued since 
FY 2011.  Given the volume of recommendations OIG makes each year, the table below reflects 
summary data by FY: 
 
  FY (2011 Number of Reports  Number of  Dollar Value of 
  2020)  With Unimplemented  Unimplemented  Aggregate Potential 
  Recommendations  Recommendations  Cost Savings 
 
2011  13  20  $446,994,129 
 
2012    24  29  $397,437,195 
 
2013  31  48  $235,963,777 
 
  2014  33  56  $15,142,396,350 
  2015  29  47  $333,957,018 
  2016  31  77  $191,370,339 
  2017  41  124  $1,116,136,306 
 
2018  59  189  $2,214,327,855 
 
2019  104  401  $1,263,918,211 
 
2020  76  262  $1,007,060,034 
 
Totals  441  1,253  $22,349,561,214 
 
 
OIG annually produces a Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIGs Top 
Recommendations (previously known as the Compendium of Unimplemented Recommendations), 
which constitutes OIGs response to a specific requirement of the Inspector General Act, as 
amended ( 5(a)(3)).  It identifies significant recommendations with respect to problems, abuses, or 
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deficiencies for which corrective actions have not been completed.  It also includes an appendix 
listing OIGs significant unimplemented recommendations, which represent opportunities to 
achieve expected impact through cost savings, improvements in program effectiveness and 
efficiency, or increasing quality of care and safety of beneficiaries.  In OIGs view, these 
recommendations would most positively impact HHS programs in terms of cost savings and/or 
quality improvements and should therefore be prioritized for implementation.   
 
(17) Statistical tables showing- 
(A) the total number of investigative reports issued during the reporting period; 
(B) the total number of persons referred to the DOJ for criminal prosecution during the reporting 
period; 
(C) the total number of persons referred to State and local prosecuting authorities for criminal 
prosecution during the reporting period; and 
(D) the total number of indictments and criminal information during the reporting period that 
resulted from any prior referral to prosecuting authorities; 
 
Total number of investigative reports issued during the reporting period,  0 
including Management Implication Reports and Investigative Advisories 
Total number of persons referred3 to Federal prosecuting authorities for  1,659 
criminal prosecution during the reporting period4   
Total number of persons referred to State and local prosecuting  203 
authorities for criminal prosecutions during the reporting period  
Total number of Federal indictments and criminal information during the  370 
reporting period that resulted from any prior referral to prosecuting 
authorities 
Total number of State and local indictments and criminal information  150 
during the reporting period that resulted from any prior referral to 
prosecuting authorities 
 
(18) A description of the metrics used for developing the data for the statistical tables under 
paragraph (17);  
 
Regarding (17)(A), OIG considers Investigative Reports as Management Implication Reports 
and Investigative Advisories.  A Management Implication Report identifies systemic 
weaknesses or vulnerabilities within HHS programs, which are generally identified during the 
 
 
3 A referral includes OIG presentations to DOJ and/or State/local prosecutorial authorities.   
4 OIG counts persons as both individuals and entities.   
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course of an OIG investigation and could lead to fraud, waste, or abuse.  It provides 
recommendations to correct or minimize the problem.  Corrective actions may require 
administrative, procedural, policy, regulatory, or legislative change.  When a Management 
Implication Report is issued to an HHS OpDiv or Staff Division, it is generally signed by the 
Inspector General.  Investigative Advisories are similar documents that bring renewed attention 
to an identified HHS issue and are generally signed by the Deputy Inspector General for 
Investigations.  
 
Regarding (17)(B) and (C), OIG defines this measure as the term "presentations" to both 
Federal and State/local prosecuting jurisdictions as the representation of the work we do.  For 
example, when OIG opens an investigation, it evaluates the complaint and decides whether to 
"present" the matter for prosecution.  Generally, if the case has prosecutorial merit, and is 
accepted for Federal prosecution, OIG works with DOJ as the primary investigative agency, as 
opposed to referring the matter to DOJ without further involvement on OIG's part.  OIG works 
with State and local prosecutorial authorities in addition to working with DOJ.  
 
Regarding (17)(D), the table above provides the number of indictments/criminal information 
during the semiannual reporting period, including sealed indictments/criminal information.  
However, the information cannot be limited to only those that occurred as a result of a 
presentation in a previous period.  In certain situations, the presentation and charging dates 
are in the same reporting period.  
 
(19) A report on each investigation conducted by the Office involving a senior Government employee 
where allegations of misconduct were substantiated, including a detailed description of- 
(A) the facts and circumstances of the investigation; and 
(B) the status and disposition of the matter, including- 
(i) if the matter was referred to the Department of Justice, the date of the referral; and 
(ii) if the Department of Justice declined the referral, the date of the declination; 
 
To respond fully to this subparagraph, OIG would need to make a finding of misconduct.  However, 
OIG does not make findings regarding its investigations relating to substantiated allegations of 
departmental employee misconduct.  Our reports relay the facts obtained during the investigations 
(e.g., parties involved, dates of events) related to any substantiated allegations.  At the conclusion 
of an OIG investigation related to substantiated allegations concerning possible employee 
misconduct, OIG provides a report to management in the employing agency.  The agency 
management makes determinations of employee misconduct.  The disposition of the matter and 
any resulting administrative actions are taken by the agency.   
 
However, we request from the agency a copy of an SF-50 documenting a personnel action, if one is 
taken.  To the extent that we have information regarding subsequent administrative action, OIG can 
provide that information.  However, because there are sometimes settlement agreements that may 
impact the final action, OIG may not have a complete record of the disposition of the investigation.  
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Accordingly, such information might be more efficiently and effectively provided directly by the 
employing agency.   
 
For this section, OIG describes investigations during this reporting period, both criminal and 
administrative, involving senior Government employees for whom allegations of misconduct were 
substantiated.  The descriptions below include a level of detail appropriate for each investigation, 
depending on whether the case details were available in public documents.  During this reporting 
period, OIG investigated no senior Government employees for misconduct.  
(20) A detailed description of any instance of whistleblower retaliation, including information about 
the official found to have engaged in retaliation and what, if any, consequences the establishment 
imposed to hold that official accountable; 
 
For departmental agencies, OIG conducts investigations and gathers facts related to whistleblower 
complaints.  Before 2015, OIG made no determinations as to whether retaliatory action had been 
taken.  However, to better facilitate the report review process, OIG changed its process in 2015 to 
include findings in its reports as to whether it was more likely than not that whistleblower 
retaliation had occurred.  Although OIG now includes these findings in its reports, it does not make 
recommendations as to what, if any, corrective action(s) should be taken.   
 
During the time period from October 1, 2019, through March 31, 2020, OIG did not issue any 
reports that included findings of retaliation. 
 
When determining the level of detail to provide for a description of any instance of whistleblower 
retaliation, OIG is always mindful of the risk that a detailed description of the allegation could 
inadvertently reveal the whistleblowers identity, thus having a chilling effect on future 
whistleblowers.  
 
(21) A detailed description of any attempt by the establishment to interfere with the independence of 
the Office, including- 
(A) with budget constraints designed to limit the capabilities of the Office; and 
(B) incidents where the establishment has resisted or objected to oversight activities of the Office 
or restricted or significantly delayed access to information, including the justification of the 
establishment for such action; and 
 
Although there have been instances in which HHS agencies have questioned OIG oversight 
activities or have not provided all information in the precise content, format, and timeline as 
requested, OIG has not identified any instances in which HHS interfered with the independence of 
OIG during this reporting period.  OIG would immediately notify Congress if it were unable to 
resolve these issues within HHS.   
 
(22) Detailed descriptions of the particular circumstances of each- 
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(A) inspection, evaluation, and audit conducted by the Office that is closed and was not 
disclosed to the public; and 
 
The table below lists evaluation and audit reports for this semiannual reporting period that did not 
result in public reports.  However, in some circumstances, a public summary of these nonpublic 
reports was published.   
 
Nonpublic Reports by Category, October 1, 2019, Through March 31, 2020 
 
Number of 
Category/Description 
Reports 
IT security reviews (involve IT systems, e.g., penetration test audits)  1 
Homeland security issues (involve particularly sensitive topics, e.g., bioterrorism, 
0 
emergency preparedness, and classified or potentially classified information) 
Recipient Capability Audits (primarily in Head Start/Early Head Start programs)  0 
Reimbursable audits performed for other Federal agencies (primarily contract 
0 
audits) 
Confidential or proprietary information (e.g., Medicare Part B drug 
0 
claims/imaging services, Medicare investment income) 
Medicare Adverse Event Reviews (required by law not to disclose)  0 
Medicare Prescription Drug Event Reviews  0 
Other  0 
HHS technical assistance reports5  0 
Finance-related attestation reviews  1 
   Total  2 
 
(B) Investigation conducted by the Office involving a senior Government employee that is closed and 
was not disclosed to the public.  
 
In section 5(a)(19), we detail investigations of senior Government employees in which allegations 
were substantiated.  Those investigations are all closed and none have been disclosed to the 
public.  OIG interprets section 5(a)(22)(B) as requiring reporting on investigations with either 
substantiated or unsubstantiated allegations.  As such, we refer to our section 5(a)(19) response to 
address investigations of senior Government employees in which allegations were substantiated 
that were closed and not disclosed to the public.  Our section 5(a)(22)(B) response describes 
 
 
5 OIG routinely provides technical assistance to HHS.  Generally, that technical assistance is not part of a formal report and is not 
formally tracked.  However, in some limited circumstances, OIG does provide technical assistance in a formal report, and only that 
category of technical assistance is reflected in this table.   
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investigations during this reporting period, both criminal and administrative, involving a senior 
Government employee in which OIG did not substantiate allegations of misconduct.   
 
When determining the level of detail to provide for the investigations described above, OIG is 
mindful of the risk that a detailed description of the investigation could inadvertently reveal the 
subjects identity.  During this reporting period, OIG investigated four senior Government 
employees for misconduct, but OIG determined the allegations to be unsubstantiated.  
Descriptions of the investigations are below.  
 
Description of  Status  Disposition  DOJ  DOJ  DOJ  DOJ 
Investigation  Referral  Referral  Declination  Declination 
Date  Date 
Complaint alleged  Closed.  No evidence  N/A  N/A  N/A  N/A 
that a Senior  to support   
Executive Service (SES)  allegations.   
employee  and   
members of his staff, 
which included 
another SES, violated 
FAR when the SES 
instructed contracting 
companies to engage 
in prohibited 
personnel practices 
when the SES 
improperly used 
Schedule A Excepted 
Service Appointments 
to hire family and 
friends, and the SES 
violated a court order 
when the SES 
instructed their staff 
to not track children 
that fell with the 
court-ordered 
definition of an 
Unaccompanied 
Minor. 
 
A complaint alleged  Closed.  Allegations  N/A  N/A  N/A  N/A 
that a senior  determined 
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Government  to be 
employee had  unfounded 
inappropriate sexual  and un-
contact with a female  proveable. 
patient. 
 
The Complaint  Closed.  No current   N/A  N/A  N/A  N/A 
alleged that a senior  criminal 
Government  allegations 
employee was caught  received, or 
in 2011 or 2012 having  actionable 
sexual contact with a  information 
juvenile female while  discovered.  
employed in the 
private sector.  The 
senior Government 
employee then 
resigned his 
employment and 
began working for the 
Government.  No 
current sexual abuse 
allegation was 
received regarding 
the senior 
Government 
employee while 
employed by the 
Government.  
 
 
 
 
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Appendix F: Anti-Kickback StatuteSafe 
Harbors 
Pursuant to HIPAA,  205, the Inspector General is required to solicit proposals annually via a Federal 
Register notice for developing new and modifying existing safe harbors to the anti-kickback statute, section 
1128B(b) of the Social Security Act and for developing special fraud alerts.  The Inspector General is also 
required to report annually to Congress on the status of the proposals received related to new or modified 
safe harbors.   
 
In 2018, OIG did not publish its typical December annual solicitation in the Federal Register.6   For 2018, OIG 
issued a request for information (OIG RFI) regarding the Federal anti-kickback statute and beneficiary 
inducements CMP, which published in the Federal Register on August 27, 2018.7  In the OIG RFI, we sought 
feedback on ways in which OIG might modify or add new safe harbors to the Federal anti-kickback statute 
and exceptions to the beneficiary inducements CMP definition of remuneration to foster arrangements 
that would promote care coordination and advance the delivery of value-based care while also protecting 
patients and taxpayer dollars against harms caused by fraud and abuse.  Consequently, below OIG reports 
on the proposals repeatedly set forth in numerous comments responding to the OIG RFI.         
 
In crafting safe harbors for a criminal statute, it is incumbent upon OIG to engage in a complete and 
careful review of the range of factual circumstances that may fall within the proposed safe harbor subject 
area to uncover all potential opportunities for fraud and abuse by unscrupulous providers.  Having done 
so, OIG must then determine, in consultation with DOJ, whether it can develop effective regulatory 
limitations and controlsnot only to foster beneficial or innocuous arrangements but also to protect the 
Federal health care programs and their beneficiaries from abusive practices. 
 
Public proposals for new and modified safe harbors  
In response to the OIG RFI, OIG received 359 comments from a variety of individuals and organizations.  
Due to the number and variety of proposals for new and modified safe harbors set forth in the comments 
received in response to the OIG RFI, we highlight some of the most common proposals below.      
 
Although most commenters to the OIG RFI strongly asserted the need for regulatory reform to the anti-
kickback statute safe harbors, a number of commenters acknowledged that increased regulatory flexibility 
 
 
6 See, e.g., OIG, Notification of intent to develop regulations, 81 Fed. Reg. 95,551 (Dec. 28, 2016), available at 
https://www.govinfo.gov/content/pkg/FR-2016-12-28/pdf/2016-31170.pdf; OIG, Notification of intent to develop regulations, 82 
Fed. Reg. 61,229 (Dec. 27, 2017), available at https://www.govinfo.gov/content/pkg/FR-2017-12-27/pdf/2017-27117.pdf. 
7 OIG, Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute 
and Beneficiary Inducements CMP, 83 Fed. Reg. 43,607 (Aug. 27, 2018), available at 
https://oig.hhs.gov/authorities/docs/2018/RFI_Regarding_AKS_Beneficiary_Inducements_CMP.pdf. 
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could create program integrity vulnerabilities or increase the risk of harms associated with fraud and abuse 
and urged OIG to exercise caution and include adequate safeguards in any regulatory proposals.  
Comments supporting regulatory reform encompassed a number of themes, including requests for:   
 
  new safe harbors protecting financial arrangements among parties participating in alternative 
payment models (APMs), value-based arrangements, and care coordination activities;  
  safe harbor protection for financial arrangements with entities not participating in Innovation 
Center models, including commercial and self-pay APM arrangements;  
  additional protection for patient tools and supports, such as in-kind items and services to support 
patient compliance with discharge and care plans, services and supports to address unmet social 
needs affecting health, and expanded protections under the local transportation safe harbor;  
  enhanced safe harbor protection for transfers of information technology, data, and cybersecurity 
tools;  
  modifications to the current patchwork fraud and abuse waiver framework for Innovation Center 
models and the Medicare Shared Savings Program; and 
  a variety of protections for pharmaceutical and medical device manufacturer arrangements, 
including broad protections for drug and medical device manufacturer participation in value-based 
contracts, pricing arrangements, warranty arrangements, and APMs, as well as protection for 
coupons and other means of direct copayment assistance to Medicare Part D beneficiaries in 
certain situations. 
In the October 17, 2019, Federal Register, OIG issued a Notice of Proposed Rulemaking, Revisions to the 
Safe Harbors Under the Anti-Kickback Statute and Civil Monetary Penalty Rules Regarding Beneficiary 
Inducements (OIG NPRM).8  The OIG NPRM includes proposals that may be responsive to certain of the 
abovementioned requests for additional protections included in comments responding to the OIG RFI.  
 
In particular, among other proposals, and subject to definitions and conditions set forth in the OIG NPRM, 
the OIG NPRM includes the following proposals:  
 
  three proposed new safe harbors for certain remuneration exchanged between or among 
participants in a value-based arrangement (as further defined) that fosters better coordinated and 
managed patient care: (i) care coordination arrangements to improve quality, health outcomes, 
and efficiency (1001.952(ee)); (ii) value-based arrangements with substantial downside financial risk 
(1001.952(ff)); and (iii) value-based arrangements with full financial risk (1001.952(gg)).  These 
proposed safe harbors vary, among other ways, by the types of remuneration protected (in-kind or 
in-kind and monetary), the level of financial risk assumed by the parties, and the types of 
safeguards included as safe harbor conditions; 
 
 
8 OIG, Medicare and State Healthcare Programs: Fraud and Abuse; Revisions to Safe Harbors Under the Anti-Kickback Statute, and 
Civil Monetary Penalty Rules Regarding Beneficiary Inducements, 84 Fed. Reg. 55,694 (Oct. 17, 2019), available at 
https://www.govinfo.gov/content/pkg/FR-2019-10-17/pdf/2019-22027.pdf.  
91 
 
 
  Department of Health and Human Services, Office of Inspector General 
Semiannual Report to CongressOctober 1, 2019, through March 31, 2020
 
 
  a proposed new safe harbor (1001.952(hh)) for certain tools and supports furnished under patient 
engagement and support arrangements to improve quality, health outcomes, and efficiency; 
  a proposed new safe harbor (1001.952(ii)) for certain remuneration provided in connection with a 
CMS-sponsored model, which should reduce the need for OIG to issue separate and distinct fraud 
and abuse waivers for new CMS-sponsored models; 
  a proposed new safe harbor (1001.952(jj)) for donations of cybersecurity technology and services;  
  proposed modifications to the existing safe harbor for EHR items and services (1001.952(y)) to add 
protections for certain cybersecurity technology included as part of an EHR arrangement, to 
update provisions regarding interoperability, and to remove the sunset date; 
  proposed modifications to the existing safe harbor for personal services and management 
contracts (1001.952(d)) to add flexibility with respect to outcomes-based payments and  part-time 
arrangements; 
  proposed modifications to the existing safe harbor for warranties (1001.952(g)) to revise the 
definition of warranty and provide protection for warranties for one or more items and related 
services; and  
  proposed modifications to the existing safe harbor for local transportation (1001.952(bb)) to expand 
and modify mileage limits for rural areas and for transportation for discharged patients. 
 
Comments to the OIG NPRM were due December 31, 2019, and are currently under consideration.  No final 
determination has been made that the arrangements described in the OIG NPRMs proposals are, or 
should be, exempt from liability under the anti-kickback statute.  In addition, any final safe harbors would 
provide only prospective protection.  In the meantime, questions about the application of the anti-kickback 
statute to specific arrangements should be addressed on a case-by-case basis, such as under the advisory 
opinion process. 
 
 
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