Office of  
Inspector 
General 
Medicaid Integrity 
Program Report 
for Fiscal Year 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 March  
 
2013 
 
   
 
 
 
      HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  http://oig.hhs.gov 
 
 
 
 
      HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Table of Contents 
 
 
Office of Inspector General 
Medicaid Integrity Program Report for Fiscal Year 2012 
 
 -------------------------------------------------------- 1 
FY 2012 Funding for  Medicaid Integri -t--y-- -A--c--t-i-v--i-t--i-e--s---------------------------------------------------------- 2 
Overlap in Oversight Activities  ------------------------------------------------------------- 2 
Allocation of Statutory Funding St r--e--a--m---s--------------------------------------------------------------- 3 
FY 2012 Medicaid  Activities and Results  --------- 3 
OIG Participation in FY 2012 Medicaid-Related Congressional H e--a--r--i-n--g--s---------- 4 
 ---------------------------------------------------------------------------------- 4
Medicaid-Related Beneficiary Safety a --n---d--- -Q----u---a--l--i-t--y-----o---f----C---a---r--e--- -I-s---s--u---e---s------------------------------- 4 
Quality of Care for Waiver Program Beneficiaries  
 ------------------------------------------------------------------------------------------------5
Vaccines for Children Mismanaged in Storage  
Nursing Home Services Found Wo r-t-h--l-e-s-s-------------------------------------------------------------------------- 5 
 -----------------------------------------------------------------5
Medicaid Wasteful Spending  --------------------------------------- 6 
Developmental CentersExcessive Daily Rates (New York)  
 --------------------------------------------------------------------------- 6
Prescription DrugsMultitier Strategy Would Fine-Tune Medicaid Pricing  
Prescription Drug RebatesMedicaid Managed Care  ------------------------------------------- 6 
 --------------------------------------------------------------------- 7
Improper State Claims for Federal Reimbursement ------------------------------------------------------- 7 
HCBS WaiversRoom-and-Board Costs (South Carolina)  
 ----------- 8
HCBS WaiversNoncompliant Providers (New Jersey, New York)  
 ------------------------------------------------- 9
Personal Care ServicesDocumentation, Other Errors (New Mexico, New Jersey, Missouri)  
----------------------------------------------------------------------------------- 9
Continuing Day Treatment Services Improperly Claimed (New York)  
 --------------------------- 10
Adult Mental Health Rehabilitation (New Jersey)  
 ------------- 10
Nonemergency Medical Transportation Services Improperly Claimed (New York)  
 ----------------------------------------------------------------------------- 11
Family PlanningPharmacy and Sterilization Claims (North Carolina, Wyoming, Oregon)  
 ------------------------------------------- 11
Therapy ServicesPayments Exceeded State Limits  
 ------------------------------------------------------------ 12
Prescription DrugsState Controls Over Drug Expenditures Inadequate  
 ------------------------------ 12
Part B PremiumsClaims for State-Paid Premiums (Nevada)  
 ----------------------------------- 13
Medicare Deductibles and CoinsuranceState Plan Rates (Montana, Nebraska)  
 --------------- 13
Administrative CostsUnallowable Provider Training Costs (Pennsylvania)  
Administrative CostsUnallowab --l-e-- -S--a--l-a--r--i-e--s-,- -O---p--e--r-a--t--i-n--g-- -C--o--s--t-s--,- -O--t-h---e--r- -I-s--s--u--e--s-- (--N---e--w--- -J-e--r-s--e--y--)---------------- 14 
Improper Claims for Individuals Concurrently Enrolled in Medicaid and the Childrens Health 
Insurance Program (Alabama)  -------------------------------------------- 14 
 --------------------------------------------------------------------------------------- 14
Improper Quarterly Statements and Adjus --t--m----e---n---t-s-------------------------------------------------------------- 15 
Adjustments Made at Improper Rate (Maine)  
 ------------------------------------------------------------------------------- 15
Calculation, Documentation Errors (Virgin Islands)  
Adjustments for Excess Contractor Profits (Texas)  
      HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Table of Contents 
 
 
 --------------------------------------------------------- 15
 ----------------------------------------------------------------------------------- 16
Adjustments for State Collections of Overpayments (Delaware)  
 --------------------------------------------------- 16
Overpayments Not Fully Reported (New Jersey)  
 -------------------------------------- 17
Federal Share of Collections Improperly Retained (Multiple States)  
 --------------------------------- 17
Improper Reporting of Overpayments and Collections (Illinois, Oklahoma)  
Managed CareFederal Share o f- -E--x-c-e--s-s-- C--a-p--i-t-a-t-i-o--n- -P--a-y--m--e--n-t-s-- (-P--e--n-n--s-y--l-v-a--n-i-a--)------------------------- 18 
 ----------------------------------------------------------------------- 18
Medicaid Fraud and Abuse  ------------------------------------------------------------------------- 19 
Medicaid Integrity Contractors Performance Hindered  
 ------------------------------------------- 19
Managed CareEmployment of Excluded Individuals  
Managed CareFraud and Abuse Concerns Remain Despite Sa f-e--g-u--a-r-d--s-------------------------------- 20 
State Medicaid Fraud Control Unit Onsite Reviews  ------------------------ 20 
Joint Investigations With State Medicaid Fraud  C---o--n--t-r--o--l- -U---n--i-t-s--------------------------- 22 
 --------------------------------------------------------------------------------------------------------------------- 22
OthPeharr mMaecidstisc--a---i-d------R---e---l-a---t--e--d--- -C---a---s--e---s-- -a---n---d-- --S--e---t--t-l--e--m-----e--n---t--s------------------------------------------------------------------- 23 
Pharmaceutical Companies  
 --------------------------------------------------------------------------------------------------------------------------------------- 23
 
 ---------------------------------------------------------------------------------------------------------------------------------------------------24
Drug Trafficking  
 -----------------------------------------------------------------------------------------------------------------------------24
Hospitals  
 -----------------------------------------------------------------------------------------------------------------------------------------24
Personal Care Services  
 -------------------------------------------------------------------------------------------------------------------------------------------------------- 25
Nursing Homes  
 ------------------------------------------------------------------------------------------------------------ 25
Clinics  
 -------------------------------------------------------------------------------------------------------------------------------------------- 26
Medical Equipment and Supplies  
----------------------------------------------------------------------------------------------------------------------- 26
Laboratories  
Managed Care Companies  
 
 
Appendix A  FY 2012 Medicaid Audit and Evaluation Reports . . . .  29 
Appendix B  OIG Open Recommendations From P rior Fiscal Years . . . .  37 
Appendix C  FY 2013 Medicaid Work Plan . . . .  43
      HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Office of Inspector General 
Medicaid Integrity Program Report for Fiscal Year 2012 
 
FY 2012 Funding for  
 
Medicaid Integrity Activities 
During fiscal year (FY) 2012, the Office of Inspector General (OIG) of the Department of 
Health and Human Services (HHS) used funding from two sources to oversee the integrity of 
Medicaid activities:  the Health Care Fraud and Abuse Control (HCFAC) program, created by the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the Medicaid Integrity 
Program (MIP), created by the Deficit Reduction Act of 2005 (DRA).  Following are descriptions of 
Heath Care Fraud and Abuse Control Program.
each funding source.  
  The HCFAC program was established by HIPAA to be 
under the joint direction of the Attorney General and the Secretary of HHS, acting through the 
Inspector General.  Funds are appropriated in amounts that the Secretary and Attorney General 
jointly certify as necessary to finance antifraud activities, up to ceilings fixed by the legislation.  
Certain of these funds are, by law, set aside for OIG activities ... with respect to Medicare and 
1
Medicaid.   HIPAA also requires the Attorney General and the Secretary of HHS to submit a joint 
annual report to Congress identifying expenditures and accomplishments under the law (Social 
Security Act,  1817(k)(5)).  These reports are available on the Web sites of both agencies 
at:  http://www.oig.hhs.gov/publications/hcfac.asp and http://www.usdoj.gov/dag/pubdoc.html.  
Since FY 1997, the HCFAC program has been the primary source of funding for Medicare and 
Medicaid fraud investigations and prosecutions by OIG and the Department of Justice (DOJ).  
Beginning in FY 2009, OIG began receiving discretionary funding in support of HCFAC-related 
Medicaid Integrity Program.
activities to provide additional resources for program integrity work. 
  Section 6034 of the DRA established the MIP, through which OIG received 
enhanced funding for fraud and abuse control activities with respect to the Medicaid program 
(section 6034(c)).  This funding was provided annually from FY 2006 through FY 2010 in addition to 
OIGs HCFAC resources and is available until expended.  In FY 2012, MIP funds were still available.  
 
Specific DRA requirements that pertain to OIG are described in Appendix C. 
 
                                                                    
1
 Social Security Act,  1817(k)(3)(A).   
  Page 1    HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Overlap in Oversight Activities   
 
Because there is an overlap among the oversight activities funded by HCFAC, MIP, and other sources, 
our work relating to Medicaid may draw on funding from more than one source.  For investigations 
and prosecutions, it is particularly difficult (sometimes impossible) to accurately segregate 
enforcement activities by funding stream.  For example, even if we conduct an investigation 
exclusively with MIP funds, the prosecution of that case could draw upon DOJs HCFAC funding and 
the matter would be reportable pursuant to the requirements of both HCFAC and MIP.  An overlap 
could also occur when an investigation involves fraud in Medicaid and other Federal health care 
programs, such as Medicare, as is often the case.  For these reasons, this document does not 
artificially divide accomplishments among funding sources; our Medicaid successes are typically the 
result of combined funding from available resources.   
Our audit, evaluation, and investigation work often requires more than a year to yield results.  As a 
consequence, many of the reviews and investigations summarized in this document reflect the results 
of our work over several years that culminated in FY 2012.  
Allocation of Statutory Funding Streams 
 
Allocation of Statutory Funding Streams for  
 
Medicaid Integrity Oversight, FY 2006  FY 2012 
(Dollars in Millions)  
   
Estimated 
  Funding Appropriated to  Estimated OIG 
Percentage of OIG 
OIG for Health Care  Obligations for 
Health Care 
Oversight  Medicaid Oversight 
  Estimated Total  Oversight 
Fiscal  HIPAA/  MIP &  HIPAA/  MIP &  OIG Obligations for  Obligations for 
Year  HCFAC  Other  HCFAC  Other  Medicaid Oversight  Medicaid Integrity 
2006  $160  $25  $45    $45  28 % 
2007  $166  $25  $25  $29  $53  28 % 
2008  $170  $25  $33  $29  $62  31 % 
2009  $196  $81  $34  $31  $65  29 % 
2010  $209  $25  $42  $34  $76  32% 
2011  $228  $0  $37  $38  $76  28% 
2012  $226  $0  $53  $19  $72  28% 
Note:  Numbers have been updated and are approximate because of rounding. 
 
The table illustrates that a sizable portion of OIG's obligated funding has been used for Medicaid 
oversight in recent years.   
  Page 2    HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
FY 2012 Medicaid  
Activities and Results 
Semiannual Reports to Congress
Following are key Medicaid-related congressional testimonies, audit and evaluation reports, and 
Semiannual Reports 
investigative outcomes that were included in the OIG spring and fall   
Semiannual Reports
for FY 2012.  The  summarize in 6-month increments significant OIG activities and 
outcomes related to at-risk HHS programs and management issues.  The   and 
corresponding audit and evaluation reports are available on OIGs Web site at https://oig.hhs.gov.  
(See Appendix A of this document for a complete list of Medicaid reports issued in FY 2012.) 
OIG Participation in FY 2012 
Medicaid-Related Congressional Hearings 
9-20-2012   
 
John Hagg, Director of Medicaid Audits, testified before 
two subcommittees of the U.S. House of Representatives 
Committee on Oversight and Government Reform on 
Medicaid payment rates for State-operated developmental 
centers in New York.  Testimony. 
John Hagg, 
Director, Medicaid Audits  
 
6-14-2012 
 
Ann Maxwell, Regional Inspector General for Evaluation and 
Inspections, testified before the U.S. Senate Committee on 
Homeland Security and Governmental Affairs, Subcommittee 
on Federal Financial Management, Government Information, 
Federal Services, and International Security, on saving 
Ann Maxwell, 
taxpayer dollars by curbing waste and fraud in Medicaid.  
Regional Inspector Gener al 
Testimony. 
for Evaluation and 
 
Inspections
12-07-2011   
Gary Cantrell, Deputy Inspector General for Investigations, 
testified before the U.S. House of Representatives Committee 
on Oversight and Government Reform, Subcommittee on 
Government Organization, Efficiency and Financial 
Management, and Subcommittee on Health Care, District of  Gary Cantrell, 
Columbia, Census and the National Archives.  Mr. Cantrell  Deputy Inspector Genera l 
summarized OIGs efforts to combat Medicaid fraud.   for  Investigations 
Testimony 
 
 
  Page 3  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Medicaid-Related Beneficiary 
Safety and Quality-of-Care Issues 
 
As purchasers of health care, Medicare and Medicaid face challenges in ensuring quality of care for 
their beneficiaries.  Despite increased attention to patient safety, administrative, civil, and criminal 
problems persist. 
Quality of Care for Waiver Program Beneficiaries  
Additional Federal Guidance, Onsite Reviews, Other Oversight Measures Needed.
  Of 25 States we 
reviewed, 7 States did not have adequate systems to ensure the quality of care provided to 
beneficiaries of the States home and community-based services (HCBS) waiver programs.  Although 
the Centers for Medicare & Medicaid Services (CMS) renewed the waiver programs in all seven of 
these States, three did not adequately correct identified problems.  Not only did the States fail to 
correct the problems before renewal of their programs, but also they had not adequately addressed 
the problems long after renewal.  Also, CMS did not consistently use the few tools it has to ensure that 
States correct problems related to quality of care.  States must operate their HCBS waiver programs in 
accordance with certain "assurances," including three related to quality of care.  To meet these 
assurances, States must demonstrate that they have systems to effectively monitor the adequacy of 
service plans, the qualifications of providers, and the health and welfare of beneficiaries. 
RecommendationsCMS should provide additional guidance to States for meeting the required 
assurances, require States that do not meet one or more assurances to develop corrective action 
plans, require at least one onsite visit before a waiver program is renewed and develop detailed 
protocols for such visits, develop a broader array of approaches to ensure compliance with each of 
Oversight of Quality of Care in Medicaid Home and Community-Based Services Waiver 
the assurances, and make information about State compliance with the assurances available to the 
Programs
public.  
.  OEI-02-08-00170.  June 2012.    
Vaccines for Children Mismanaged in Storage 
Vulnerabilities in Vaccine Storage and Management Threaten Efficacy.  
A June 2012 report revealed 
that providers in the Vaccines for Children (VFC) program exposed vaccines in storage to 
inappropriate temperatures, which could reduce vaccine potency and efficacy, increasing the risk that 
children are not provided with maximum protection against preventable diseases.  The VFC program 
is a Medicaid benefit that provides free vaccines to eligible children.  CMS delegates the programs 
implementation to the Centers for Disease Control and Prevention (CDC), which purchases VFC 
vaccines and distributes them to VFC providers.  We found that vaccines stored by 76 percent of 
45 selected providers were exposed to inappropriate temperatures for at least 5 cumulative hours.  
We also found expired vaccines stored together with nonexpired vaccines, increasing the risk of 
mistakenly administering the expired vaccine.  The selected providers generally did not meet vaccine 
management requirements or maintain required documentation.   
  Page 4  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
RecommendationsCDC should work with VFC grantees and providers to ensure that VFC vaccines 
are stored according to requirements; that expired vaccines are identified and separated from 
Vaccines for Children Program:  Vulnerabilities in Vaccine 
nonexpired vaccines; that grantees better manage providers vaccine inventories; and that grantees 
Management
meet oversight requirements.  
.  OEI-04-10-00430.  June 2012.   
Nursing Home Services Found Worthless  
Georgia  Nursing Home Operator Sentenced to 20 Years for Providing Worthless Services.  
Former 
nursing home operator George Houser was sentenced to 20 years of incarceration and ordered to pay 
$6.7 million in restitution after being convicted of submitting claims to Medicare and Georgia 
Medicaid for services provided to residents that were so deficient the judge determined them to be 
worthless.  During the trial, witnesses testified that there were food shortages, leaking roofs, 
virtually no nursing or housekeeping supplies, poor sanitary conditions, major staff shortages, and 
serious safety concerns at the three nursing homes that Houser and his wife owned and operated.  
This is the first time that a defendant has been convicted after a trial in Federal court of submitting 
claims for payment for worthless services.   
Medicaid Wasteful Spending 
 
The reports in this section describe the wasteful spending that occurs when Federal or State Medicaid 
laws, policies, and methodologies fail to ensure that program costs are consistent with efficiency and 
economy; reasonableness; and Medicaids role as a high-volume, prudent insurer/payer in the health 
care marketplace.    
Developmental CentersExcessive Daily Rates (New York)    
New Yorks Rate-Setting Methodology for State-Operated Developmental Center Reimbursement Was 
Inconsistent With Efficiency and Economy.  
The Medicaid daily rate for 15 selected State-operated 
Intermediate Care Facilities (ICF) for individuals with intellectual and developmental disabilities 
(developmental centers) was more than nine times the average daily rate for all other State-operated 
and privately operated ICFs in State FY (SFY) 2009.  If New York had used prior year actual costs as 
the starting point in its rate methodology instead of its current method, the Federal Government 
might have saved over $700 million in reimbursements in SFY 2009.  The daily rate for the selected 
developmental centers grew to $4,116 per day in SFY 2009the equivalent of $1.5 million per year 
for one Medicaid beneficiary.  The growth occurred because the States rate-setting methodology 
significantly inflated the Medicaid daily rate for the developmental centers and CMS did not prevent 
the rate from increasing to its current levels.   
RecommendationCMS should ensure that New Yorks Medicaid daily rate methodology for 
State-operated developmental centers meets the Federal requirement that payment for services be 
consistent with efficiency and economy.  On the basis of this report and previous audits of payments 
Medicaid 
to public providers in other States, OIG reiterated in testimony before a congressional committee that 
payments to public providers should be limited to the actual cost of providing services.  
  Page 5  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Rates for New York State-Operated Developmental Centers May Be Excessive
.  A-02-11-01029.  May 
2012.  Testimony.       
Prescription DrugsMultitier Strategy Would Fine-Tune Medicaid Pricing  
States Pharmacy Reimbursement Methodologies Did Not Always Reflect Pharmacies Actual Costs for 
Major Categories of Drugs. 
 States could better approximate pharmacies actual costs of drugs by 
developing separate reimbursement methodologies for major categories of drugs, i.e., single-source 
drugs, brand-name multiple-source drugs, and generic multiple-source drugs.  Numerous OIG 
reviews have found that the basis that States historically used for Medicaid drug reimbursements did 
not represent pharmacies actual costs to acquire drug ingredients.  As a result, States often have 
overreimbursed pharmacies for those costs.  This review evaluated the relationships between three 
recognized pricing benchmarks and pharmacy invoice prices for Medicaid-reimbursed drugs and 
found variations depending on whether the drugs were brand-name or generic.   
RecommendationCMS should encourage States to use the results of this review when considering 
Review of Drug Costs to Medicaid Pharmacies and Their Relation to Benchmark 
changes to pharmacy reimbursement methodologies, including methodologies for the major 
Prices
categories of drugs.  
.  A-06-11-00002.  October 2011.   
Prescription Drug RebatesMedicaid Managed Care  
Some States Did Not Collect All the Manufacturer Rebates They Are Due.
  The Patient Protection and 
Affordable Care Act of 2010 (Affordable Care Act) expanded the Medicaid rebate requirement to 
include drugs paid for through managed care organizations (MCOs).  To realize the full savings under 
the expansion, States must implement processes to collect accurate drug utilization data from MCOs 
and invoice and collect rebate payments from manufacturers.  Of 22 States we identified that paid for 
prescription drugs through MCOs during our period of review, 10 did not invoice manufacturers and 
collect the rebates they were due.  The actions were not taken because, for example, States had to 
complete programming changes to the systems that process MCO claims.        
RecommendationCMS should follow up with the 10 States that had not collected rebates for drugs 
States' Collection of Medicaid Rebates for Drugs Paid Through Medicaid Managed Care 
dispensed to Medicaid MCO beneficiaries and take action to enforce rebate collection if 
Organizations
necessary.  
.  OEI-03-11-00480.  September 2012.   
Improper State Claims 
for Federal Reimbursement 
 
States and the Federal Government jointly fund Medicaid.  States sometimes inadvertently or 
inappropriately cause the Federal Government to pay more than its correct share of Medicaid costs.  
This condition typically occurs when States pay too much on the basis of improper billings by 
providers or suppliers.  Billings are considered improper when, for example, required documentation 
in patients medical files is missing or insufficient; the items or services billed were not medically 
necessary; the services were not provided; the billings contained errors, such as miscoding; or other 
  Page 6  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
State or Federal requirements for payment were not met.  States do not always readily identify such 
problems before claiming Federal reimbursement.  States may also improperly claim Federal 
reimbursement for other types of costs, such as administrative costs, for which requirements are not 
met, or they may claim Federal reimbursement at the wrong rates.  Following are reports issued in 
FY 2012 that revealed improper State claims for Federal reimbursement. 
HCBS WaiversRoom-and-Board Costs (South Carolina)  
Unallowable Room-and-Board Costs Claimed by South Carolina.
  South Carolina improperly claimed 
about $4.8 million (Federal share) of unallowable room-and-board costs under an HCBS intellectual 
and related disabilities waiver program.  The States controls were inadequate to ensure that 
applicable Federal law and State guidance were followed.  The State did not detect errors or 
misstatements on local participating entities cost reports.  Also, the State did not prescribe a uniform 
format for the local entities to follow when preparing cost reports.  Rather, each local entity prepared 
its cost reports in its own format, making it difficult to identify when unallowable costs were claimed.  
RecommendationsSouth Carolina should refund to the Federal Government the improperly claimed 
$4,832,975 Federal share.  The State should remove room-and-board-related administrative and 
general costs from future waiver program cost reports, develop a uniform cost reporting process and 
South Carolina Claimed Some Unallowable Room and Board Costs Under the Intellectual 
require that participating entities follow the process, and strengthen cost report review 
and Related Disabilities Waiver
procedures.  
.  A-04-11-04012.  September 2012.   
HCBS WaiversNoncompliant Providers (New Jersey, New York)  
Individual Plans of Care, Documentation, Insufficient Policies and Procedures.
  Three reports 
revealed that claims for Federal reimbursement for Medicaid HCBS in New Jersey and New York 
were unallowable because they did not meet certain Federal and State requirements.  Policies and 
procedures for overseeing and administering the waiver programs were not adequate to ensure that 
providers claimed reimbursement only for services actually provided and maintained all the required 
documentation to support the services billed and to ensure that waiver program services were 
provided to beneficiaries only when rendered pursuant to written plans of care.  For example, at one 
p rovider, beneficiaries plans of care were not reviewed by a physician every 60 days, as required.    
RecommendationsNew Jersey.  Refund to the Federal Government the estimated $60,740,637 
in improperly claimed Federal reimbursements; ensure that providers bill only for documented, 
allowable Community Care Waiver program services that are provided only to beneficiaries for 
whom there are completed and approved individual habilitation plans; and ensure and document 
Medicaid Payments for Services Under New Jerseys Section 1915c 
that all beneficiaries approved for services have been assessed and certified to need the 
Community Care Waiver
designated level of care.  
  .  A-02-10-01029.  April 2012.     
RecommendationsNew York.  Refund to the Federal Government an estimated $7,772,807 in 
improperly claimed Federal share reimbursements and strengthen policies and procedures to 
New York Claimed 
ensure that providers bill only for services actually provided, maintain the required 
Unallowable Costs for Services by NYC Providers Under the States Developmental Disabilities 
documentation, and provide services pursuant to written plans of care.  
Waiver Program
.  A-02-10-01027.  August 2012.     
  Page 7  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
 
RecommendationsNew York.  Refund the improperly claimed $8,177,970 Federal share and 
Review of Selected Medicaid Home 
improve its monitoring of the reviewed provider and its other contracted home health providers 
Health Services Claims Made by Jewish Home and Hospital Lifecare Community Services  
to ensure compliance with Federal and State requirements.  
Manhattan LTHHCP
.  A-02-10-01002.  April 2012.     
Personal Care ServicesDocumentation, Other Errors (New Mexico, 
New Jersey, Missouri)  
Inadequate Certifications, Inadequate Documentation, Other Errors Associated With Provider Claims 
to States.
  New Mexico, New Jersey, and Missouri improperly claimed Federal reimbursement for 
personal care services claims submitted by providers that did not comply with certain Federal and 
State requirements; the claims were therefore ineligible for Federal reimbursement.  Examples of 
personal care services include, but are not limited to, meal preparation, shopping, grooming, and 
bathing.  The deficiencies included inadequate personal care attendant qualifications and 
certifications; lapses in authorizations, in-service education for personal care attendants, nursing 
supervision, documentation of services, nursing assessments, and certification; and various 
documentation deficiencies, including no documentation of supervisory visits, unsupported units of 
service claimed, no documentation of physician authorization, and lack of State approval for personal 
care services provided by certain caregivers.  Personal care services may be provided to individuals 
who are not inpatients at a hospital or residents of a nursing facility, an intermediate care facility for 
in dividuals with intellectual disabilities, or an institution for mental diseases.   
RecommendationsNew Mexico.  Refund to the Federal Government the estimated $404,817 
Review of 
Federal share paid for unallowable personal care services and ensure that personal care services 
New Mexico Medicaid Personal Care Services Provided by Clovis Homecare, Inc
providers maintain evidence that they complied with Federal and State requirements.  
.   A-06-09-00117.  
  June 2012.   
RecommendationsNew Mexico.  Refund to the Federal Government the Federal share, 
estimated at $4,483,492, of the States payments for unallowable personal care services and 
Review of New Mexico Medicaid Personal Care Services Provided by 
ensure that personal care services providers maintain evidence that they comply with Federal 
Heritage Home Healthcare
and State requirements.  
  .  A-06-09-00063.  May 2012 
RecommendationsNew Mexico.  Refund $889,000 to the Federal Government and ensure that 
Review of New Mexico Medicaid Personal Care Services Provided by Ambercare 
personal care services providers maintain evidence that they comply with Federal and State 
Home Health
requirements.  
  .  A-06-09-00062.  March 2012.      
RecommendationsNew Jersey.  Refund an estimated $774,274 to the Federal Government and 
New Jersey Did Not Always Claim Federal Medicaid Reimbursement for Personal 
direct the provider to ensure that all of its offices comply with Federal and State 
Care Services Made by Bayada Nurses, Inc., in Accordance With Federal and State Requirements
requirements.  
.  A-
  02-10-01001.  September 2012.   
RecommendationsNew Jersey.  Refund $145 million to the Federal Government and improve 
its monitoring of the personal care services program to help ensure compliance with Federal and 
  Page 8  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Review of Medicaid Personal Care Claims Submitted by Providers in 
New Jersey
State requirements.  
  .  A-02-09-01002.  December 2011.   
RecommendationsMissouri.  Refund an estimated $26,953,855 to the Federal Government, 
implement procedures to ensure that it adequately supports the costs claimed for personal care 
services and maintains the supporting documentation, and improves its policies and procedures 
Missouri Claimed Federal Reimbursement for Unallowable Personal Care Services 
for monitoring the personal care services program for compliance with Federal and State 
Claims
requirements.  
.  A-07-11-03P1e7r1so. n Saelp Ctaemreb Seerr v2i0ce1s2. 
Also see OIG Portfolio:   .  OIG 12-12-01.  November 2012.   
Continuing Day Treatment Services Improperly Claimed (New York)  
State Monitoring Did Not Ensure Compliance.
  More than half of the claims for continuing day 
treatment (CDT) services that we reviewed did not comply with one or more of New York States 
requirements for payment, resulting in unallowable Federal reimbursements.  CDT is a form of clinic 
services performed by nonhospital providers that New York includes among its licensed outpatient 
programs.  Providers did not properly document the type of CDT services billed, recipients clinical 
progress, and/or recipients contacts with outpatient program staff.  Although the State conducts 
periodic onsite monitoring, its monitoring program did not ensure that providers complied with all 
State requirements.   
RecommendationsNew York should refund $84.4 million to the Federal Government, work with the 
State Office of Mental Health to issue guidance to providers regarding State requirements for claiming 
Review of Medicaid Claims 
Medicaid reimbursement for CDT services, and work with the State office to improve its monitoring 
Submitted by Continuing Day Treatment Providers in New York State Audit
of the CDT program to ensure compliance with State requirements.  
.  A-02-09-01023.  
October 2011.   
Adult Mental Health Rehabilitation (New Jersey) 
Guidance, Monitoring Needed To Curb Deficiencies. 
 New Jersey improperly claimed Federal 
reimbursement for adult mental health rehabilitation claims that were unallowable because 
community residence rehabilitation providers failed to comply with Federal and State requirements.  
We found the following seven types of deficiencies:  provider staff did not meet education and 
training requirements; service plan requirements were not met; the providers staffing levels were 
not consistent with the required level of care or the provider claimed a higher level of care than was 
recommended; weekly progress notes were not documented; a registered nurse did not conduct a 
face-to-face visit within the required time period; services were not documented, supported, or 
allowable; and nursing assessment requirements were not met. 
RecommendationsNew Jersey should refund to the Federal Government an estimated $30,589,719 
in improper Federal reimbursements, give community residence rehabilitation providers guidance to 
Review of Medicaid 
help ensure that they comply with Medicaid State plan requirements, and improve monitoring of 
Claims for Adult Mental Health Rehabilitation Services Made by Community Residence Providers in 
providers claims to ensure compliance with Federal and State requirements.  
New Jersey
.  A-02-09-01028.  May 2012.     
  Page 9  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Nonemergency Medical Transportation Services Improperly 
Claimed (New York)  
New Yorks Policies and Procedures Did Not Ensure That Providers Complied With Requirements.
  
States are required to ensure necessary transportation for Medicaid beneficiaries to and from 
providers.  Providers in New York did not comply with Federal and State requirements for ordering, 
documenting, providing, and claiming such services, and New York Citys social services district's 
q uality assurance mechanism did not ensure that services were properly provided. 
RecommendationsNew York State.  Refund $13.5 million to the Federal Government; 
strengthen policies and procedures to ensure compliance with requirements for ordering, 
documenting, and claiming transportation services; and require the New York State social 
Review of Medicaid Payments for Nonemergency Medical Transportation 
services districts to strengthen their quality assurance mechanism to ensure that services are 
Services Claims Submitted by Providers in New York State
properly provided.  
  .  A-02-09-01024.  February 2012.     
RecommendationsNew York City.  Refund an estimated $17 million to the Federal Government; 
Review of Medicaid Payments for Nonemergency Medical Transportation Services 
resolve $2.9 million set aside for further analysis; and strengthen policies, procedures, and 
Claims Submitted by Providers in New York City
quality controls.  
.  A-02-08-01017.  November 2011.   
Family PlanningPharmacy and Sterilization Claims (North Carolina, 
Wyoming, Oregon)  
Documentation, Other Requirements Not Met.
  Reviews of North Carolina, Wyoming, and Oregon 
Medicaid revealed that the States did not always claim Medicaid family planning reimbursement for 
pharmacy and sterilization costs in accordance with Federal and State requirements.  States furnish 
family planning services and supplies to individuals of childbearing age who are eligible under the 
State Medicaid plan and who desire such services and supplies.  The Federal Government is 
authorized to reimburse States for expenditures in family planning services at a 90-percent enhanced 
rate.  Claims lacked supporting documentation, and the States controls did not ensure that costs 
were claimed pursuant to Federal and State requirements.  Also, services provided under Oregons 
Expansion Project for certain categories of individuals were unallowable for Federal reimbursement 
in  their entirety.  
RecommendationsNorth Carolina.  Refund to the Federal Government the pharmacy claim 
amounts (estimated at $1,383,713) and sterilization claim amounts (estimated at $3,665) that 
were improperly reimbursed at the enhanced rate for family planning, improve its controls to 
ensure that it claims the enhanced rate only for contraceptive drugs that physicians prescribe for 
North Carolina Incorrectly Claimed Enhanced Federal Reimbursement For 
family planning, and ensure that sterilization consent forms are completed in accordance with 
Some Medicaid Services That Were Not Family Planning
Federal regulations.  
  .  A-04-10-01089.  June 2012.   
RecommendationsWyoming.  Refund $1,348,942 in improper Federal reimbursements, review 
costs for inpatient sterilization procedures for quarterly reporting periods after our audit period 
and refund any overpayments, and strengthen internal controls to ensure that costs for Medicaid 
Wyoming Incorrectly Claimed Enhanced Reimbursement for Medicaid Family 
family planning sterilization procedures are claimed in accordance with Federal and State 
Planning Sterilization Costs
requirements.  
.  A-07-11-01100.  August 2012.  
  Page 10  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
 
RecommendationsOregon.  Refund an estimated $1.7 million to the Federal Government, 
resolve $3 million set aside for further analysis, limit income eligibility in accordance with 
Oregon Improperly Claimed Federal 
Federal requirements, verify clients incomes and Social Security numbers, and strengthen 
Reimbursement for Medicaid Family Planning Services Provided Under the Family Planning 
controls to prevent and detect duplicate claims.)  
Expansion Project
.  A-09-11-02010.  January 2012.    
Therapy ServicesPayments Exceeded State Limits  
Improper Payments Easily Preventable.
  A relatively low number of claims for therapy services were 
paid improperly; however, most of the errors that occurred were easily preventable.  Medicaid law 
allows States to provide optional servicessuch as physical; occupational; and speech, hearing, and 
language (speech) therapythrough their Medicaid State plans.  States may establish limits on the 
amount, duration, and scope of the Medicaid services they will cover, as long as each service is 
sufficient to reasonably achieve its purpose.  State-established limits include the number of therapy 
services, hours of therapy services, or total dollar amount the Medicaid program will pay for each 
beneficiary during a certain period.  All of the eight States that we selected for indepth review had 
safeguards to prevent payments in excess of State limits.  Despite the safeguards, we identified 
improperly paid therapy services claims totaling approximately $744,000 in six of the eight States.  
Additional claims that were potentially improper were identified in three of the eight States.  Several 
States reported improving their program integrity safeguards to address our findings.   
Medicaid 
RecommendationsCMS should work with States to prevent Medicaid payments for therapy services 
Payments for Therapy Services in Excess of State Limits
in excess of State limits and follow up on the inappropriate claims identified in our review.  
.  OEI-07-10-00370.  March 2012.    
Prescription DrugsState Controls Over Drug Expenditures Inadequate  
Neither CMS Nor the 14 States Reviewed Had Adequate Controls To Ensure That Drug Expenditures 
Complied With Federal Requirements for Payment.
  Cost savings to Medicaid could be realized by 
implementing several corrective actions that we outlined.  Federal Medicaid funding is generally 
available for covered outpatient drugs if the drug manufacturers have rebate agreements with CMS 
and pay rebates to the States.  The agreements require manufacturers to provide a list of all covered 
outpatient drugs to CMS quarterly.  CMS includes the drugs on a quarterly Medicaid drug tape (list), 
makes adjustments for any errors, and sends the tape to the States.  We found that manufacturers did 
not always provide information in a timely manner to CMS, and States generally did not use the 
quarterly drug tapes to determine whether a drug was eligible for coverage and did not contact CMS 
to determine whether a drug was eligible for coverage if it was not on the tapes.  The drug tapes 
indicate the drugs termination dates (if applicable), specify whether the drugs are less than effective, 
and include information that the States use to claim rebates from manufacturers.   
RecommendationsCMS should require States to review and reject all current and prior claims for 
terminated drugs.  It should instruct States to develop and implement controls to ensure that drug 
expenditures claimed for Federal reimbursement comply with all Federal requirements, report 
terminated drug expenditures to States quarterly, and require States to use the reports to ensure 
compliance.  CMS should also work with drug manufacturers to ensure that the information on the 
quarterly drug tapes is complete and accurate and take appropriate action against manufacturers if 
they do not provide timely information, develop policies and procedures to inform States 
  Page 11  HHS Office of Inspector General    
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Multi-State Review of Centers for Medicare & Medicaid 
immediately when a drug has been terminated, and instruct States to claim expenditures only for 
Services Medicaid Drug Expenditure Controls
drugs dispensed before the termination dates.  
.  A-07-10-06003.  October 2011.   
Part B PremiumsClaims for State-Paid Premiums (Nevada)  
Documentation and Eligibility Issues Associated With States Improper Part B Premium Payments.
  
Nevada did not always comply with Federal requirements when claiming Federal reimbursement for 
Medicare Part B program premiums that it paid on behalf of Medicaid beneficiaries.  Federal law 
allows State Medicaid programs to enter into an arrangement with CMS known as the buy-in 
program.  The buy-in program allows a participating State Medicaid program to enroll certain dual 
eligibles (individuals who are entitled to both Medicare and some form of Medicaid benefits) in Part 
B and to pay the monthly premiums on their behalf.  The State may then claim the monthly premium 
expenditures for Federal reimbursement.  We identified numerous improper State claims for Federal 
reimbursement and set aside additional amounts for resolution involving public welfare additions 
(i.e., individuals added to a States buy-in list on the basis of a Social Security Administration notice to 
CMS that the individuals appear to be eligible for Medicaid).  
RecommendationsNevada should refund to the Federal Government $194,891 (Federal share) of 
unallowable Part B premiums claimed, identify any portion of the $878,263 in Part B premiums 
claimed for public welfare additions that was unallowable and refund the Federal share, identify the 
Part B premiums for which the State did not have adequate supporting documentation and refund the 
Federal share, delete ineligible individuals from the buy-in program and refund the Federal share of 
the Part B premiums claimed, identify ineligible individuals added through the public welfare 
addition procedure and take appropriate corrective action, establish procedures to reduce the 
Nevada Improperly Claimed Federal Reimbursement for Medicare 
number of erroneous public welfare additions, and ensure that it can support the Federal share 
Part B Premiums Paid on Behalf of Medicaid Beneficiaries
claimed for each Part B premium.  
.  A-09-11-02024.  July 2012.     
Medicare Deductibles and CoinsuranceState Plan Rates (Montana, 
Nebraska)  
Lack of Policies and Procedures Fostered Noncompliance.
  Montana and Nebraska did not always claim 
Medicaid payments for Medicare deductibles and coinsurance for services whose payments are 
limited to State Medicaid plan rates in accordance with Federal requirements and the approved State 
plan.  The States did not compare the Medicare payment to the State Medicaid plan rate because they 
d id not have policies and procedures requiring them to do so. 
RecommendationsMontana (Part B).  Refund to the Federal Government an estimated 
$1,113,789 in unallowable Medicaid payments and develop and implement policies and 
Montana Did Not Properly 
procedures to ensure that it compares the Medicare payment to the State Medicaid plan rate to 
Pay Medicare Part B Deductibles and Coinsurance for Outpatient Services
determine the allowable Medicare Part B deductibles and coinsurance.  
.  A-07-11-03172.  
  June 2012. 
Review of Nebraska's Medicaid Payments for Dual Eligible Individuals' Medicare 
RecommendationNebraska (Part A).  Refund an estimated $5.5 million to the Federal 
Part A Deductibles and Coinsurance
Government.  
.  A-07-11-03161.  February 2012.   
  Page 12  HHS Office of Inspector General    
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Nebraska Did Not Properly Pay Some Medicare Part B Deductibles and Coinsurance
RecommendationNebraska (Part B).  Refund an estimated $5.6 million to the Federal 
Government.)   .   
A-07-11-03168.  February 2012.      
Administrative CostsUnallowable Provider Training Costs 
(Pennsylvania)  
Training Activities Did Not Qualify as Administrative Costs.
  Pennsylvania did not comply with 
Federal requirements when it claimed Medicaid administrative costs for the Pennsylvania Restraint 
Reduction Initiative (Initiative).  The claimed costs were for training nursing home providers and not 
for administering the Medicaid program.  CMS explicitly prohibits claiming provider training as 
Medicaid administrative costs.  Accordingly, Pennsylvanias claims for Federal reimbursement of 
Initiative costs for SFYs 1996-1997 through 2010-2011 as administrative costs were unallowable.  In 
1996, Pennsylvania launched the Initiative to train nursing home providers to reduce the use of 
physical restraints in compliance with Federal regulations.  The Initiative subsequently introduced 
provider training to address other quality-of-life issues in nursing homes.  
RecommendationsPennsylvania should refund $3,001,536 in Federal funds for unallowable 
administrative costs, refund the Federal share of unallowable Initiative costs claimed as 
Pennsylvania Claimed Medicaid Administrative Costs for Provider Training Under Its Restraint 
administrative costs after our audit period, and discontinue all future claims of such 
Reduction Initiative
costs.  
.  A-03-11-00209.  July 2012. 
Administrative CostsUnallowable Salaries, Operating Costs, Other 
Issues (New Jersey) 
Policy, Procedures Lacking; Calculations, Documentation Noncompliant.
  In FYs 2005 and 2006, 
New Jersey included unallowable salaries and operating costs in the cost pool used to compute its 
Medicaid administrative claim.  The State improperly claimed Federal Medicaid reimbursement for 
the cost of Medicaid administrative activities performed by staff of contracted community mental 
health providers.  In addition, the contractor that computed the Medicaid costs assigned Medicaid-
reimbursable random moment time study (RMTS) codes to workers' activities that were not 
allowable or could not be documented as related to Medicaid and performed an RMTS that deviated 
from acceptable statistical sampling practices.  Also, the State used Medicaid eligibility rates that 
co uld not be documented.  Similar issues were found in FY 2007.      
RecommendationsNew Jersey 2005, 2006.  Refund $22.5 million to the Federal Government, 
maintain supporting documentation for Medicaid-reimbursable activities, ensure that future 
Review of Medicaid 
calculations follow acceptable cost principles and CMS requirements, and maintain supporting 
Administrative Costs Claimed by New Jersey for State Fiscal Years 2005 and 2006
documentation for Medicaid eligibility rates used in computations.  
.  A-02-08-01009.  
  March 2012.   
RecommendationsNew Jersey 2007.  Refund $5 million to the Federal Government, resolve 
$8 million in Medicaid administrative costs set aside for further analysis, establish policies and 
Review of Medicaid Administrative Costs Claimed by New Jersey for 
procedures to follow acceptable statistical sampling practices, and maintain supporting 
State Fiscal Year 2007.  
documentation for rates used.  
A-02-07-01050.  November 2011.     
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Improper Claims for Individuals Concurrently Enrolled in Medicaid and 
the Childrens Health Insurance Program (Alabama)  
Alabama Improperly Claimed the Federal Share for Concurrently Enrolled Individuals.
  The Childrens 
Health Insurance Program (CHIP) allows States to provide health care coverage to uninsured children 
in families whose incomes are too high to qualify for Medicaid but too low to afford private health 
care coverage.  Alabama improperly claimed the Federal share of CHIP costs for individuals who had 
Medicaid or other health insurance coverage from October 1, 2009, through September 30, 2010.  
States may not claim a Federal share of CHIP costs for individuals who are concurrently enrolled in 
CHIP and Medicaid or who have other health insurance coverage.  Alabamas internal controls were 
not adequate to prevent or promptly correct concurrent enrollments.  The errors occurred because 
State policy allowed for a coordination of benefits between CHIP and other health insurance 
coverage. 
RecommendationsWe recommend that Alabama refund $1.5 million for the Federal share of costs 
claimed on behalf of individuals who were concurrently enrolled in CHIP and Medicaid, refund 
$153,000 (Federal share) for costs claimed on behalf of individuals enrolled in CHIP who had other 
health insurance coverage, develop additional policies and procedures to prevent or promptly recoup 
CHIP payments made on behalf of individuals who are identified as enrolled concurrently in 
Alabama Improperly Claimed Federal Funds for Childrens Health 
Medicaid, and revise the current policy that allows for a coordination of benefits between CHIP and 
Insurance Program Enrollees Who Had Medicaid or Other Health Insurance Coverage
other health insurance coverage.  
.  A-04-11-08008.  
September 2012.   
Improper Quarterly Statements and Adjustments 
 
States failure to report accurate data or make required quarterly adjustments may also cause the 
Federal Government to pay more than its correct share of Medicaid costs.  States report Medicaid 
expenditures to CMS on the Quarterly Medicaid Statement of Expenditures for the Medical Assistance 
Program (Form CMS-64).  The report must be submitted to CMS within 30 days after the end of each 
quarter.  This form shows Medicaid expenditures for the quarter being reported and any prior-period 
adjustments.  It accounts for overpayments, underpayments, and refunds received by the State. 
Adjustments Made at Improper Rate (Maine)   
Incorrect Rate Applied to Adjustments.
  Maine did not always use the correct Federal share percentage 
when processing claim adjustments reported on the Form CMS-64.  The Federal Government 
reimbursed Maine $166 million (Federal share) for 1 million Medicaid claims that the State originally 
paid and subsequently adjusted through the Form CMS-64 for calendar years 2005 through 2009.  
Of that amount, $9,179,777 was incorrect.  Errors occurred when the State subsequently processed 
entirely new claims, including the adjustment amounts, as current expenditures at the current rate.   
RecommendationsMaine should refund to the Federal Government $9,179,777 it improperly 
Maine Did Not Always Make Correct Medicaid Claim Adjustments
claimed for Medicaid claim adjustments and ensure that it processes future adjustments using the 
correct rate.   .  A-01-12-00001.  
July 2012.   
  Page 14  HHS Office of Inspector General    
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Calculation, Documentation Errors (Virgin Islands)  
Calculations Improper and Documentation Not Properly Retained.
  The U.S. Virgin Islands claimed 
Federal Medicaid reimbursement for expenditures that were improperly calculated because 
employees lacked policies and procedures for correctly preparing the Form CMS-64.  The amounts 
claimed were not adequately documented by reported expenditures.  Supporting documentation 
could not be located because a record retention policy had not been established.   
RecommendationsThe Virgin Islands should refund to the Federal Government $393,316 in 
Review of Quarterly Medicaid Statement of Expenditures for the Medical Assistance 
improperly calculated expenditures and establish policies and procedures for correctly preparing 
Program in the U.S. Virgin Islands for the Quarter Ended September 30, 2009
Form CMS-64.  
.  A-02-11-01004.  
April 2012.     
Adjustments for Excess Contractor Profits (Texas)  
Federal Share Understated and Required Project Approvals Not Obtained.
  A review of Form CMS-64 
reports that Texas submitted to CMS revealed that Texas did not correctly report a Medicaid 
Management Information System (MMIS) contractors profits that were in excess of the 11 percent 
allowed by the contract.  The States calculation erroneously understated the Federal share of the 
excess profits.   
Although other sampled MMIS expenditures Texas claimed for Federal reimbursements were 
allowable and were claimed at the appropriate reimbursement rates, Texas did not obtain required 
prior approvals from CMS for two projects in the sample.  The projects included designing, 
developing, and operating the MMIS.  Federal regulations require States to seek prior approval from 
CMS to claim Federal reimbursement for MMIS project costs estimated to exceed certain thresholds.  
We also identified 16 other projects, which were not in the sample, that did not have the required 
approvals.                
RecommendationsTexas should refund $2,634,568 related to the Federal share of excess contractor 
profits; obtain retroactive approval for the projects that did not have the required prior Federal 
Texas Did Not Report Excess Contractor Profits in Accordance With Federal 
approval from CMS; and ensure that prior approval is obtained on future projects, as required by 
Regulations
Federal regulations.  
.  A-06-10-00062.  August 2012.   
Adjustments for State Collections of Overpayments (Delaware)  
Collections Understated and Federal Share Miscalculated.  
Delaware did not comply with Federal 
requirements to report all Medicaid overpayment collections.  State officials said that they believed 
the overpayments had been netted out of reported Medicaid expenditures but did not provide 
support for such adjustments.  The State did not properly report its collections for Medicaid 
overpayments because it did not develop and implement effective internal controls to ensure 
accurate reporting on Form CMS-64.  Also, Delaware reported on Form CMS-64 collections for 
overpayments that it identified as recoveries resulting from fraud and abuse investigations but 
calculated a Federal share based on an incorrect rate.  Using the correct rate, the State should have 
reported a higher Federal share.     
  Page 15  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
RecommendationsDelaware should include $16,272,518 of unreported Medicaid overpayment 
collections on the next Form CMS-64 and refund $10,080,378 to the Federal Government, identify 
and report any unreported Medicaid overpayments collected before and after our audit period, 
account for the incorrectly calculated Federal share for the collections resulting from fraud and abuse 
investigations by refunding $2,391, apply the correct rate when reporting Medicaid overpayments on 
Delaware Did Not 
Form CMS-64, and develop and implement internal controls that will enable the State to correctly 
Comply With Federal Requirements To Report All Medicaid Overpayment Collections
report and refund the Federal share of Medicaid overpayments on Form CMS-64.  
.  A-03-11-00203.  
June 2012.     
Overpayments Not Fully Reported (New Jersey)  
Not All Overpayments Are Correctly Reported.
  For Federal FYs 2008 and 2009, New Jersey did not 
report Medicaid overpayments totaling $2.8 million ($1.4 million Federal share) in accordance with 
Federal requirements.  Federal law requires the State to refund the Federal share of Medicaid 
overpayments at the end of the 60-day period following the date of discovery, whether or not the 
State has recovered the overpayment.  Of the 180 overpayments we reviewed, 14 were only partially 
reported or not reported on Form CMS-64.  The remaining 166 were reported correctly.  The State 
also did not report all Medicaid provider overpayments within the 60-day time requirement.  The 
State did not properly report these overpayments because it had not developed and implemented 
policies to ensure that overpayments were reported correctly on Form CMS-64. 
RecommendationsNew Jersey should include unreported Medicaid overpayments of $2,812,968 on 
the CMS-64, refund $1,406,486 to the Federal Government, and develop and implement policies to 
New Jersey Generally Reported Medicaid Overpayments in Accordance 
ensure that future Medicaid overpayments are reported on the correct Form CMS-64 in accordance 
With Federal Regulations
with Federal requirements.  
.  A-02-10-01009.  September 2012.     
Federal Share of Collections Improperly Retained (Multiple States) 
Federal Share of Medicaid Collections To Be Recalculated in 35 States. 
 We identified 35 States that 
improperly retained the Federal share of collections (e.g., from overpayments to providers), which 
reduce States expenditures in calculating the Federal share.  Effective with the quarter ending 
December 31, 2008, the American Recovery and Reinvestment Act of 2009 (Recovery Act) 
temporarily increased the percentage of State Medicaid expenditures paid by the Federal 
Government.  When CMS calculated the additional funding for the first Recovery Act quarter, it did 
not include States collections in that calculation.  As a result, States improperly retained increased 
funding.  CMS retroactively provided additional Federal funds for the first Recovery Act quarter by 
applying the increased percentage to expenditures each State had already submitted.  A CMS official 
stated that recalculating the Federal share of collections using the Recovery Act rate was the States 
responsibility.      
Recommendations CMS should recoup from 35 States $25,012,996 in retained funding; review 
States Federal share calculations for collections reported in subsequent Recovery Act quarters and 
recoup any overpayments related to the Recovery Act rate; and emphasize that States should 
States Inappropriately 
calculate the Federal share of collections for which they originally received amounts calculated at 
higher, fixed-reimbursement percentages using those same percentages.  
  Page 16  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Retained Federal Funds Related to Medicaid Collections for the First Recovery Act 
Quarter
.  A-06-11-00064.  June 2012.     
Improper Reporting of Overpayments and Collections (Illinois, 
Oklahoma) 
Errors Found in the Reporting of Overpayments and Collected Amounts.
  Pursuant to Federal law and 
the applicable credit provisions of Office of Management and Budget  Circular A-87, the Federal 
share of recovered overpayments or other collections must be credited to the Federal award in the 
quarter in which they are collected.  Two reports below demonstrate State errors in the reporting of 
uncollected overpayments (Illinois) and collected amounts (Oklahoma).  Illinois did not report 24 of 
the 27 overpayments we reviewed because of its unwritten policy of reporting overpayments 
not involving fraud or abuse when the provider appeals process was completed, rather than at the 
end of the 60-day period following discovery.  Oklahoma did not properly report collections 
associated with probate amounts and with fraud and abuse collections.  Oklahoma inappropriately 
subtracted probate collection amounts from its worksheet calculation because State officials 
incorrectly believed that probate collections were associated with adjusted claims and wanted to 
avoid duplicate reporting.  Also, the State did not report the entire amount of its fraud and abuse 
collections.  In other instances, the State underreported and overreported the Federal share of 
co llections and applied incorrect share percentages.   
RecommendationsIllinois.  Include the unreported Medicaid overpayments we identified in its 
quarterly report to CMS, refund an estimated $9 million to the Federal Government, and ensure 
Review of Illinois' Reporting of Fund Recoveries in the Appeals Process 
that future Medicaid overpayments that are in the appeals process are reported in accordance 
on the Form CMS-64
with Federal requirements.  
  .  A-05-11-00052.  January 2012.   
RecommendationsOklahoma.  Refund an estimated $14.8 million to the Federal Government; 
resolve $435,000 in unsupported adjusted claims we set aside for further analysis; ensure that 
Review of Oklahoma Collections for the Medical 
documentation requirements are met; and establish review procedures to ensure that collections 
Assistance Program for Calendar Years 2004 Through 2009
are correctly compiled, assigned, and reported.  
.  A-06-10-00057.  January 2012.   
Managed CareFederal Share of Excess Capitation Payments 
(Pennsylvania) 
Poor Controls, Commingling of Funds Affect Federal Share Adjustments. 
 Pennsylvania did not develop 
and implement effective internal controls to identify and return to the Federal Government the 
Federal share of excess managed care capitation payments recouped from counties Risk and 
Contingency and Reinvestment funds.  Pennsylvania recouped excess capitation payments from 12 of 
24 counties we reviewed but did not refund the full Federal share in accordance with Federal 
requirements.  Also, the State was unable to identify the amount of State-only funds recouped from 
Philadelphia County because the countys reinvestment account commingled excess capitation 
payments for both Federal Medicaid and State General Assistance enrollees.    
RecommendationsPennsylvania should refund $7,950,454 Federal share of excess capitation 
payments returned by Philadelphia County and develop procedures to ensure that it refunds the 
Federal share of excess capitation payments recouped from the Risk and Contingency and 
  Page 17  HHS Office of Inspector General    
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Pennsylvania Did Not Refund the Full Federal Share of Recouped Excess Capitation 
Payments From the Medicaid Behavioral HealthChoices Program
Reinvestment funds.  
.  A-03-10-00204.  June 2012.     
Medicaid Fraud and Abuse 
 
Medicaid faces multiple challenges in preventing and detecting fraud, including identifying 
questionable patterns of billing, overpayments, and high rates of improper payments.  Federal and 
State Medicaid agencies monitor fraud through data analysis, audits, and investigations. 
Medicaid Integrity Contractors Performance Hindered 
Review MICs
CMS defined three types of Medicaid Integrity Contractors (MIC) to perform the program integrity 
Audit MICs Education MICs
activities mandated in the DRA and to identify additional fraud, waste, and abuse , 
, and  .  Review MICs review State Medicaid claims data and identify 
potential overpayments.  Audit MICs audit specific providers and identify overpayments.  Education 
M ICsR eedviuecwa tMe pICrso vPiedrefrosr manadn cbee nHeinfidceiareride sb yo nP oporro gDraatma. integrity issues. 
  For the Review MICs that we examined, 
analytical assignments under the task orders did not result in recommendations of specific audit 
leads or identification of potential fraud leads.  MICs identified problems with CMSs information 
technology infrastructure data that limited their ability to accurately complete data analysis 
assignments.  Because data were missing or inaccurate, the MICs inaccurately identified potential 
overpayments and may have overlooked some potential overpayments.  States invalidated more 
than one-third of the potential overpayments in samples the MICs provided.  CMS reported 
several initiatives underway to improve the data the MICs use.   
Early Assessment of 
RecommendationsCMS should improve the quality of data that Review MICs can access for 
Review Medicaid Integrity Contractors
data analysis and require Review MICs to recommend specific audit leads.  
  Audit MICs Performance Hindered Bec.a  OusEeI -A0u5d-1it0 T-a0r0g2et0s0 W.  Feereb rPuoaorryly 2 I0d1e2n.t i f ied. 
 Few of the audits 
assigned to Audit MICs from January through June 2010 identified overpayments.  Of the 370 
audits assigned to Audit MICs, 81 percent either did not identify overpayments or were unlikely 
to identify them.  Audit targets were misidentified because of data problems and because State 
program policies were applied incorrectly.  The problematic audit targets caused MICs to 
duplicate efforts.  Audit MICs reported spending significant preaudit time evaluating algorithms, 
reanalyzing system data, and ensuring the accurate application of State policies during audit 
target selection. According to CMS's data, an average of 3 months elapsed between the date CMS 
assigned audits to Audit MICs and the dates Audit MICs began the audits.   
RecommendationCMS should increase collaboration among Audit and Review MICs, CMS, and 
Early Assessment of Audit Medicaid Integrity Contractors
States to eliminate duplication of efforts and improve target selections in States that opt not to 
partner in collaborative audits.   .   
  SOtEaIt-u0s5 o-1f P0r-e0v0i2o1u0sl.y   MIdaerncthif 2ie0d1 A2u.  d  i t Targets Provided.
  Our April 2012 addendum report provides 
information and insights on 161 of 244 audit targets that CMS had assigned to Audit MICs.  We 
  Page 18  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
found that as of February 1, 2012, Audit MICs had completed 127 of the 161 assigned audits of 
providers.  An average of 10 months elapsed between the dates CMS assigned the audits to Audit 
MICs and the dates the Audit MICs reported their findings to CMS.  Twenty-five of the completed 
audits identified overpayments, totaling $285,629.  The remaining 102 completed audits found 
Status of 244 Provider Audits Identified Using 
no overpayments.  Thirty-four of the assigned audits had not been completed and were ongoing.  
Review Medicaid Integrity Contractor Analysis
The report does not contain recommendations.  
.  OEI-05-10-00201.   
Managed CareEmployment of Excluded Individuals  
Few Excluded Individuals Found in Medicaid Managed Care.
  Of 248,869 individuals employed by 
500 sampled providers, we identified 16 individuals who were excluded from participation in Federal 
health care programs.  Exclusions are typically imposed on the basis of convictions for program-
related fraud, patient abuse, or license revocations.  Incorrect names and failure of contractors to 
follow procedures contributed to the employment of the excluded individuals.  Most providers 
reported using a variety of safeguards to ensure that they do not employ excluded individuals. But 
providers said that costs and resource burdens posed challenges in executing those safeguards.  
Seven percent of providers in the 12 selected Medicaid managed care entities (MCE) do not check the 
Excluded Individuals Employed by Providers Enrolled 
exclusions status of their employees; most of these providers lacked knowledge regarding exclusions.  
in Medicaid Managed Care Entities
The report does not contain recommendations.  
.  OEI-07-09-00632.  September 2012.   
Excluded Providers in Medicaid Managed Care 
A prior report recommended that CMS periodically remind States of their obligation to ensure that no 
Plans
excluded providers receive Medicaid payments.  
.  OEI-07-09-00630.  February 2012.   
Managed CareFraud and Abuse Concerns Remain Despite Safeguards   
Despite Safeguards, MCEs Remain Concerned About the Prevalence of Fraud. 
 CMS, States, and 
Medicaid MCEs said that services billed but not rendered are their primary concern with respect to 
fraud and abuse in Medicaid managed care.  Other concerns include rendering services that are not 
medically necessary, upcoding by providers, questionable beneficiary eligibility, and prescription 
drug abuse by beneficiaries.  All MCEs in our sample reported taking steps to meet Federal program 
integrity requirements, and all States in our sample reported taking steps to oversee MCEs fraud and 
abuse safeguards.  Even so, they remained concerned about the prevalence of fraud.   
RecommendationsCMS should require that State contracts with MCEs include a method to verify 
with beneficiaries whether they received services billed by providers.  CMS could require States to 
implement one of several options we described.  We also recommend that CMS update guidance to 
Medicaid Managed Care: Fraud and Abuse Concerns Remain Despite 
reflect concerns expressed by MCEs and States and share best practices and innovative methods that 
Safeguards
States and MCEs have applied.  
 
.  OEI-01-09-00550.  December 2011.   
 
  Page 19  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
State Medicaid Fraud Control Unit Onsite Reviews 
 
OIG oversees the operation and performance of State Medicaid Fraud Control Units (MFCUs or Unit).  
MFCUs are key partners with OIG in the fight against fraud, waste, and abuse in State Medicaid 
programs.  MFCUs investigate and prosecute Medicaid fraud as well as patient abuse and neglect in 
health care facilities. In FY 2011, HHS awarded $156.7 million in Federal grant funds to 50 MFCUs 
(including 1 in Washington, DC), which employed a total of 1,833 individuals.  OIG certifies, and 
annually recertifies, each MFCU.  OIG collects information about MFCU operations and assesses 
whether they comply with statutes, regulations, and OIG policy.  OIG also analyzes MFCU performance 
on the basis of 12 published performance standards and recommends program improvements, where 
appropriate.   
For three State reviews, OIG found no evidence of significant noncompliance with applicable laws, 
re guNlaetwio nYos,r ok rM pFoCliUc.y transmittals.   
  From FYs 2008 through 2010, the New York Unit filed criminal charges 
against more than 400 defendants, obtained over 400 convictions, and was awarded more than 
$750 million in recoveries.  Unit managers, staff, and stakeholders cited a number of noteworthy 
practices, including the Unit's approach to patient abuse and neglect cases, its list of ongoing 
investigations (created to avoid conflicts among investigating agencies), and its use of technology.  
Medicaid New York State Medicaid Fraud Control 
Our report includes findings and recommendations with respect to staff size, training, written 
Unit:  2011 Onsite Review
guidance and agreements, and file maintenance.  
  Missouri MFCU. .  OEI-02-11-00440.  June 2012.     
  For FYs 2008 through 2010, the Missouri Unit reported recoveries of 
$135 million, 13 convictions, and 36 civil settlements.  The Unit exercised proper fiscal controls 
over its resources.  The Unit expanded its definition of referrals and changed its process for 
Medicaid 
closing older cases during FYs 2008 through 2010.  The report includes findings and 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review
recommendations with respect to training, documentation, and records oversight.  
  Kansas MFCU. .  OEI-07-11-00750.  July 2012.   
  For FYs 2009 through 2011, the Unit reported combined civil and criminal 
recoveries of nearly $66 million and 44 convictions.  The Unit increased referrals through 
Kansas State Medicaid 
education and outreach efforts.  Our report includes findings and recommendations with respect 
Fraud Control Unit:  2012 Onsite Review
to internal controls, reporting, training, documentation, and reviews.  
.  OEI-07-12-00200.  September 2012.     
Joint Investigations With 
State Medicaid Fraud Control Units 
 
Following are highlights of the outcomes of OIGs joint investigations with MFCUs that were 
Virginia  Psychiatric Counseling and Treatment of Adolescents.
concluded in FY 2012. 
  Universal Health Services, Inc. (UHS), 
and its subsidiaries, Keystone Education and Youth Services, LLC, and Keystone Marion, LLC, d/b/a 
  Page 20  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Keystone Marion Youth Center UHS, agreed to pay over $6.85 million to resolve allegations that it 
submitted false and fraudulent claims to Medicaid.  Between October 2004 and March 2010, the 
entities allegedly provided substandard psychiatric counseling and treatment to adolescents in 
violation of Medicaid requirements.  The United States alleged that UHS falsely represented Keystone 
Marion Youth Center as a residential treatment facility providing inpatient psychiatric services to 
Medicaid-enrolled children when in fact it was a juvenile detention facility.  The United States further 
alleged that neither a medical director nor licensed psychiatrist provided the required direction for 
psychiatric services or for the development of initial or continuing treatment plans.  The settlement 
further resolved allegations that the entities filed false records or statements to Medicaid when they 
filed treatment plans that falsely represented the level of services that would be provided to the 
North Carolina  Nonemergency Dialysis-Patient Ambulance Transports.
patients.   
 Thomas Hunter and Janet 
Johnson-Hunter, owners and operators of Coastline Care, Inc., an ambulance and medical transport 
company, entered into a settlement agreement for $950,178.  The settlement resolved allegations 
that, between January 2002 and October 2006, the Hunters submitted Medicare and Medicaid claims 
for nonemergency dialysis-patient ambulance transports that were not medically necessary because 
the patients could walk and/or were not bedridden.  Specifically, the Hunters allegedly instructed 
employees to omit the true condition of patients from the ambulance call reports when they did not 
meet Medicare and Medicaid reimbursement requirements.  As part of the settlement, Janet Johnson-
Hunter agreed to an exclusion from Federal health care programs of 15 years on the basis of her 
conviction on charges of conspiracy to make false statements relating to health care matters.  In the 
criminal case, she was sentenced to 2 years and 4 months of incarceration and ordered to pay 
Pennsylvania Attendant Care Services
$475,089 in restitution.     
  .  Octavia Durham and her daughter, Anneikkia Durham Smith , 
were sentenced for their roles in a Medicaid fraud scheme.  A relative of the pair who was a Medicaid 
beneficiary received attendant care services from Durham pursuant to the Medicaid Commerce 
Waiver Program.  An initial investigation by the Pennsylvania MFCU revealed that the beneficiary 
suffered from ulcers, bed sores, dehydration, and malnutrition and had missed numerous medical 
appointments.  A doctor who examined him in June 2009 recommended that the beneficiary be 
immediately taken to an emergency room.  On a number of Durhams attendant timesheets, Smith 
signed on behalf of the beneficiary, verifying Durhams hours and services provided.  Numerous 
timesheets and claims submitted to Medicaid included hours that Durham allegedly provided care 
when in fact Durham was employed elsewhere or was out of town or when the beneficiary was 
hospitalized or was in a nursing home.  Durham was sentenced to between 11.5 months to 23 months 
of incarceration and ordered to pay $128,000 in restitution.  Smith was ordered to pay $38,614 of this 
amount jointly and severally with Durham and was sentenced to a 7-year term of probation.  This was 
a joint investigation with the MFCU of the Pennsylvania Attorney Generals Office and the 
New York Stark Law and Anti-Kickback Statute Issues.
Montgomery County District Attorneys Office.  
   Good Samaritan Hospital Medical Center (Good 
Samaritan) and South Bay OB/GYN (South Bay) agreed to pay $1.75 million to resolve their liability 
under the Civil Monetary Penalties Law (CMPL).  Good Samaritan and South Bay disclosed that Good 
Samaritan paid salary and benefits under a contract for clinical teaching, administrative, and 
supervisory services to five physicians associated with South Bay.  The salary and benefits were 
above fair market value and violated the Stark Law and the Anti-Kickback Statute.  This case was 
resolved jointly with New York States Office of Medicaid Inspector General.  
  Page 21  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Other Medicaid-Related Cases and Settlements 
 
Pharmaceutical Companies 
Massachusetts  GlaxoSmithKline:  Marketing and Promotion Practices
.  In the largest health care fraud 
settlement in U.S. history, the pharmaceutical company GlaxoSmithKline (GSK) entered into a global 
criminal, civil, and administrative settlement and agreed to pay $3 billion to resolve its liability for its 
marketing and promotion practices associated with several drugs.  In three False Claims Act 
settlement agreements, the United States alleged that GSK promoted several drugs, including Paxil, 
Wellbutrin, Advair, Lamictal, and Zofran for off-label uses and paid kickbacks to induce the 
prescription of certain drugs; improperly promoted the drugs Avandia, Advandmet, and Avandaryl 
with false and misleading statements about the drugs safety; and violated the requirements of the 
Medicaid drug rebate program.  As part of the settlement, GSK also entered into a 5-year corporate 
integrity agreement (CIA) with OIG that includes enhanced compliance provisions designed to 
promote accountability and transparency in GSKs business practices.  In addition, the CIA requires 
that GSK maintain its Patient First program, which is designed to compensate sales representatives 
on the basis of the quality of services they provide to physicians instead of the volume of sales in their 
territories.  GSK also must establish and maintain a financial recoupment program for executives.   
The investigation involved collaboration across several Government agencies, including the Food and 
Drug Administration (FDA), the Federal Bureau of Investigation, the Defense Criminal Investigative 
Service, the Office of Personnel Management, the Department of Veterans Affairs, the Department of 
Labor, TRICARE, and the U.S. Postal Service.  In addition, GSK entered into separate Medicaid-related 
Massachusetts  Merck, Sharp & Dohme:  Marketing and Promotion Practices.
settlement agreements with multiple States.   
  Pharmaceutical 
company Merck, Sharp & Dohme (Merck) agreed to pay over $628 million to resolve allegations that 
it violated the False Claims Act by improperly marketing and promoting the drug Vioxx.  Between 
May 1999 and September 2004, Merck allegedly promoted Vioxx improperly for the treatment of 
rheumatoid arthritis; made statements about the cardiovascular safety of Vioxx that were inaccurate, 
misleading, and inconsistent with the FDA-approved labeling for the drug; and made false statements 
about the safety of Vioxx to State Medicaid agencies.  The settlement agreement is part of a global 
criminal, civil, and administrative settlement under which Merck paid a total of $950 million plus 
interest; pleaded guilty to a misdemeanor violation of the Food, Drug, and Cosmetic Act; and entered 
into a comprehensive 5-year CIA with OIG.  In addition, Merck is expected to enter into separate 
New Jersey  McKesson Corporation:  Accuracy of Reported Drug Prices.  
Medicaid-related settlement agreements with 44 States.  
McKesson Corporation, a 
distributer of pharmaceuticals and medical supplies, agreed to pay $187 million plus interest to 
resolve allegations that it inflated pricing information for its prescription drugs.  The United States 
alleged that McKesson provided inflated average wholesale pricing figuresup to 25-percent 
markupsto First Data Bank, a publisher of discount pricing.  First Data Banks information was 
used by State Medicaid programs to determine reimbursements and fee schedules for McKessons 
prescription drugs.  As a result of McKessons alleged provision of artificially inflated wholesale 
pricing, State Medicaid programs reimbursed higher amounts for prescription medications than 
should have been paid between August 2001 and December 2009.  In addition, McKesson agreed to 
  Page 22  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
pay over $151 million to 29 States and the District of Columbia to resolve its liability to the States 
New Jersey  Sandoz:  Timeliness of Reporting Required Drug Price Data.
affected by the alleged price manipulation scheme. 
  Sandoz, a pharmaceutical 
company, agreed to pay $230,000 to resolve its potential liability under the CMPL.  Specifically, the 
Government contended that Sandoz failed to submit in a timely manner pricing data required under 
the Medicaid Drug Rebate Program.  
Pharmacists 
Massachusetts  HIV/AIDS Drugs Billed to Medicaid but Not Provided.
  Pharmacist Aloysius Nsonwu 
was excluded from Federal health care programs for a minimum of 15 years after his convictions in 
Federal and State courts for conspiracy to defraud the Government with respect to claims, Medicaid 
false claims, larceny by false pretenses, and conspiracy.  According to court documents, between 
approximately December 2004 and February 2010, Nsonwu paid customers to bring in their 
Medicare and Medicaid cards so he could submit false claims for HIV/AIDS medications without 
dispensing the medications.  Many of these individuals were not HIV positive.  In addition, Nsonwu 
obtained valid prescriptions from Medicaid beneficiaries who were HIV positive, but instead of 
dispensing their medications, he paid them in cash for the prescriptions.  Nsonwu was sentenced to 
4 years and 1 day of incarceration and ordered to pay approximately $555,500 in restitution on his 
State conviction.  He was also ordered to pay approximately $147,700 in restitution on his Federal 
conviction.  In addition, his license to practice as a pharmacist was revoked by the Massachusetts 
Indiana  False Prescriptions and Money Laundering.  
State Board of Pharmacy. 
John Love, controlling member and pharmacist 
for the Terre Haute Prescription Shop (THPS), was sentenced to 4 years and 3 months of 
incarceration and ordered to pay $3.5 million in restitution for his role in a health care fraud and 
money laundering scheme.  Between January 2006 and September 2010, Love used his position at 
the pharmacy to carry out a scheme to defraud the Indiana Medicaid Program.  Love entered false 
prescriptions in the THPS computer billing system, which, in turn, billed the Indiana Medicaid 
Massachusetts  Kickbacks and False Claims.
Program.   
  Ernest Melvin McGee, assistant pharmacist of Codman 
Square Pharmacy (Codman), along with Codmans owner, Amadiegwu Onujiogu, solicited paper 
prescriptions from customers in exchange for illegal kickbacks and submitted false claims to 
Medicare and Medicaid.  McGee and Onujiogu targeted customers with HIV/AIDS and/or psychiatric 
disorders, such as depression and bipolar disorderconditions that require expensive 
prescriptions.  Many of the beneficiaries they recruited were drug addicts or homeless 
persons.  McGee was sentenced to 12 months and 1 day of incarceration and was ordered to pay 
$292,635 and $60,037 in restitution to Medicaid and Medicare, respectively, for his role in the health 
care fraud scheme.  Onujiogu was convicted on the same charge and sentenced to 15 months of 
incarceration.    
Drug Trafficking 
Florida  Illegal Possession, Intent To Distribute, and Distribution. ,
  Paul Wagner Jr., a private citizen, 
was sentenced to 7 years and 2 months of incarceration for possession with intent to distribute, as 
well as for distributing the Schedule II drug oxycodone.  Wagner was part of a fraud scheme that 
  Page 23  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
entailed obtaining paper oxycodone prescriptions from a physician who prescribed the controlled 
substances to Medicare and Medicaid beneficiaries, despite lack of medical necessity.  Wagner then 
assisted in filling the prescriptions and trafficking the drugs to street dealers.  
Hospitals 
Georgia  Claims for Allegedly Unnecessary and Dangerous Procedures. 
 
 Satilla Health Services, Inc., 
d/b/a Satilla Regional Medical Center (Satilla),agreed to pay $840,000 to resolve its liability under 
the False Claims Act.  The agreement resolves allegations that Satilla submitted claims to Medicare 
and Medicaid for medically unnecessary and dangerous endovascular procedures performed by a 
physician for the medical centers heart center that caused serious injury to 37 patients.  Satilla 
entered into an agreement with another company to purchase Satilla, which will result in a new 
board of directors, new administrators, and a new compliance program at the medical center.   
Personal Care Services 
Minnesota  Personal Care Assistant Services.
  John Alemoh Momoh, owner and operator of Hopecare 
Service, Inc. (Hopecare), was sentenced to 2 years of incarceration and ordered to pay $656,876 in 
restitution to Medicaid for claims submitted for personal care assistant (PCA) services.  Between May 
2007 and March 2008, Momoh submitted false claims with respect to the number of PCA service 
hours provided to Medicaid beneficiaries.  Momoh also submitted false claims to Medicaid for 
services that were not rendered, were provided by an unqualified individual, and were not medically 
Virginia  Services Rendered by Untrained Personal Care Aides.
necessary.  
  Health Care of Virginia, LLC (HCV), a 
home health agency, was ordered to pay $323,420 in restitution for health care fraud.  The company 
allegedly submitted claims to the Virginia Medicaid program for services rendered by untrained 
personal care aides.  The investigation indicated that HCV falsified training certificates and patient 
assessments.  Two other defendants pleaded guilty for their roles in the scheme and have been 
sentenced.  
Nursing Homes 
Tennessee  Enteral (Nutrition) Therapy Goods and Services.  
Vanguard Healthcare Ancillary Services, 
LLC; Vanguard Healthcare, LLC; and Vanguard Healthcare Services, LLC (collectively, Vanguard) 
agreed to pay $2 million as a part of a settlement agreement to resolve allegations of false claims and 
illegal kickbacks.  Between March 1998 and September 2008, Vanguard allegedly submitted claims to 
Medicare for enteral (nutrition) therapy goods and services that were also billed to the Tennessee 
and Mississippi Medicaid programs.  Vanguard allegedly failed to disclose the relationship between 
its long-term-care facilities (which billed Tennessee and Mississippi Medicaid for the enteral therapy 
goods and services) and Vanguard Healthcare Ancillary Services (which billed Medicare Part B for the 
same goods and services).  Vanguard also allegedly submitted claims to Medicare for certain free 
items, namely pumps used to deliver nutritional products and intravenous poles used in the 
administration of enteral therapy that Vanguard had received at no cost from a third-party supplier in 
an effort to induce referrals.   
  Page 24  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Clinics   
New Jersey  Billing for Services Not Provided.  
The Center for Lymphatic Disorders, LLC (CLD), was 
ordered to pay $3 million in restitution as a result of a guilty plea to third-degree health care claims 
fraud by office manager Farah Houtan.  Between January 2004 and June 2007, Houtan billed 
Medicare and Medicaid for services not provided to patients.  CLD staff allegedly submitted claims for 
surgical procedures but in fact provided physical therapy services, which have a lower 
reimbursement rate.  
Medical Equipment and Supplies 
Texas  Billing for Items Not Provided.
  James Reese, Lia St. Junius, Brenda Lopez, Lily Johnson, and 
others of The Mobility Store (TMS), a medical equipment and supply company, took part in a scheme 
that fraudulently billed braces to Medicare and Medicaid as orthotic devices.  As a result, Medicare 
reimbursed TMS at a rate many times the actual cost of the braces.  Reese, Junius, Lopez, and Johnson 
were sentenced to 15 years, 11 years and 3 months, 3 years and 7 months, and 2 years and 9 months 
of incarceration, respectively, for their roles in the scheme.  Additionally, Johnson was ordered to pay 
$4 million in restitution, jointly and severally, and Lopez, Reese, and St. Junius were each ordered to 
Florida  Unauthorized Oxygen-Therapy-Related Testing and Falsification.  
pay $8.6 million, jointly and severally.   
Benjamin Bane (B. Bane), 
owner and operator of two medical equipment and supply companies that provided oxygen therapy 
in central and west Florida, and two managers, Greg Bane (G. Bane) and Tracy Bane (T. Bane), were 
sentenced to incarceration and ordered to pay restitution for participating in a scheme to defraud 
Medicare and Medicaid.  Although medical equipment and supply companies are expressly prohibited 
by Medicare regulations from performing the qualifying tests to establish medical necessity for home 
oxygen, B. Bane allegedly instructed his employees to perform such tests; falsify test results; and alter 
information on office computers, such as the beneficiarys name and the procedure date.  The 
qualifying test results were then provided to either one of two pulmonary diagnostics companies to 
appear as though they had been performed by an independent diagnostic testing facility in 
accordance with Medicare regulations, thus making them appear eligible for reimbursement.  B. Bane 
was sentenced to 12 years of incarceration and ordered to pay $7 million in restitution, jointly and 
severally.  G. Bane and T. Bane were sentenced to 3 years and 6 months of incarceration, respectively, 
for their roles in the scheme, and both were ordered to pay $7 million in restitution, jointly and 
California  Kickback-Related Solicitation and Sale of Beneficiary Information Used in False Billings of 
severally.  
Medicare and Medi-Cal. 
 Mariya Bagdasaryan, owner of Goldberg Medical Supply, was sentenced to 3 
years and 1 month of incarceration and ordered to pay $576,803 in restitution for one count of health 
care fraud.  Between October 2007 and December 2008, Bagdasaryan defrauded Medicare and Medi-
Cal by paying kickbacks to marketers to solicit beneficiary information with promises of free medical 
equipment and supplies.  Bagdasaryan then sold the beneficiary information to a Medicare billing 
service, which, in turn, sold some of the information to a fraudulent medical equipment and supply 
company called True Care Medical Supply (True Care).  True Care submitted claims to Medicare 
falsely representing that it had supplied medical equipment and supplies to 
beneficiaries.  Bagdasaryan received the longest possible prison term, partly because of a conviction 
in 2002 for the same offense.  In January 2011, True Care's owner, Edgar Srapyan, was sentenced to 
3 years and 1 month of incarceration and ordered to pay over $330,000 in restitution.  
  Page 25  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
Tennessee  Diabetic Testing Supplies. 
 AmMed Direct, LLC (AmMed), agreed to pay $18 million to 
resolve allegations that it violated the False Claims Act.  From September 2008 to January 2010, 
AmMed, a supplier of diabetic testing supplies and other medical equipment and supplies, allegedly 
billed Medicare and Tennessee Medicaid for diabetic testing supplies sold to beneficiaries through 
telephone cold calls, in violation of the Social Security Act, 1834(a)(17), which prohibits unsolicited 
telephone contact by suppliers.  AmMed advertised and offered free cookbooks without any mention 
of diabetic testing supplies or without stating that AmMed was a medical equipment and supply 
company.  When beneficiaries called to claim the cookbook, AmMed allegedly sold them diabetic 
testing supplies and submitted claims to Medicare and Tennessee Medicaid.  The settlement also 
resolves AmMeds alleged failure to refund Medicare and Medicaid for supplies that were returned 
to the company.  AmMed disclosed the unpaid refunds to the Government during the investigation.  
Laboratories  
Indiana  Unnecessary Blood Tests and Other Improprieties. 
 Medway Diagnostic Laboratories operator 
Munir Chaudhry and Physician Adolph Yaniz were each sentenced after health care fraud convictions.  
The Government contended that, between January 2008 and February 2009, Chaudhry worked with 
Yaniz to perform unnecessary blood tests on Yanizs patients and billed Medicare and Medicaid for 
the services.  Chaudhry also paid the monthly rent for the medical practice in exchange for Yaniz's 
sending all his patients specimens to Medway Diagnostic Laboratories for analysis.  Yaniz admitted 
that he knowingly dispensed hydrocodone and alprazolam to patients who had no medical need for 
the medications.  Yaniz was sentenced to 5 years of incarceration and ordered to pay restitution of 
$71,577.  As part of his plea agreement, Yaniz agreed to forfeit his medical license.  He further agreed 
to a lifetime ban from participating in any Federal or State-funded health care program.  Chaudhry 
was sentenced to 2 years and 3 months of incarceration and ordered to pay $31,000 in restitution, 
jointly and severally. 
Managed Care Companies 
Florida, Illinois  Multiple Violations Alleged.  
WellCare Health Plans, Inc., a company that provides 
managed health care services, agreed to pay $137.5 million to the Federal Government and nine 
States to resolve four lawsuits involving alleged violations of the False Claims Act.  The Government 
alleged that WellCare falsely retained payments from Florida Medicaid, Florida Healthy Kids, and 
Illinois Medicaid for behavioral health services; falsely retained payments from Florida Medicaid for 
newborns; submitted falsely inflated performance data for call centers; knowingly permitted Florida 
Medicaid to rely on overpriced encounter data for future premium rate setting and other uses; 
operated a sham Special Investigative Unit that failed to properly audit WellCare providers; upcoded 
risk scores for Medicare plans; and engaged in sales and marketing abuses, including cherrypicking 
of healthy patients to avoid future costs.  Five former WellCare executives, including former chief 
executive officer Todd Farha, were indicted in March 2011.  In addition to agreeing to the settlement, 
California  Allegations of Misrepresenting Information Affecting Reimbursements.
WellCare entered into a 5-year CIA with enhanced oversight and reporting obligations.  
  SCAN Health Plan, 
Senior Care Action Network, and Scan Group (collectively, SCAN) agreed to pay $322 million to 
resolve allegations that it violated the False Claims Act.  SCAN is a Medicare Advantage (i.e., Medicare 
Part C) plan, which is focused on providing services to beneficiaries who are dually eligible for 
Medicare and Medicaid.  The United States alleged that SCAN provided misleading information about 
  Page 26  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
beneficiaries diagnoses, resulting in inflated capitation payments, and improperly retained 
overpayments.   
   
  Page 27  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    FY 2012 Funding, Activities, and Results 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  http://oig.hhs.gov 
 
 
 
  Page 28  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
Appendix A 
Medicaid Reports Issued in FY 2012 
 
The majority of reports listed in this appendix are available on the Office of Inspector General (OIG) 
Web site at https://oig.hhs.gov.  To access the reports, query on the report number shown after each 
title. Reports not posted to the Web site may be requested through the Freedom of Information Act 
(FOIA). To make a request under FOIA, please use the following 
link:  https://oig.hhs.gov/foia/submit.asp. 
Audit Reports 
 
Medicaid Hospitals 
  Utah Did Not Always Correctly Claim Medicaid Costs for Selected High-Dollar Outpatient Claims 
Audit
  Review, A o-0f C7o-1st1s- 0C4la1im77e d  for Selected High-Dollar Outpatient Services in the Colorado Medicaid 
Program During the Period January 1, 2007, Through December 31, 2009
  Missouri Did Not Always Correctly Claim Medicaid Costs for Selected High,  DAo-0ll7ar-1 O1u-t0p4a1t7ie8n t Claims 
Audit
, A-07-11-04180 
Medicaid Home, Community, and Nursing Home Care 
  Massachusetts Generally Complied With Federal and State Requirements for Medicaid Payments to 
Wingate Healthcare
  Massachusetts Medic, aAi-d0 P1a-1y1m-e0n0t0s 1t0o  Alliance Health of Massachusetts, Inc. Did Not Always Comply 
With Federal and State Requirements
,
  Massachusetts Medicaid Payments to ,D Aio-0ce1s-a1n2 -H0e0a0l0th3c are Facilities Did Not Always Comply With 
Federal and State Requirements
  Massachusetts Medicaid Paymen, tAs -t0o1 C-1ed2a-0r 0H0i0ll 4H ealth Care Center Did Not Always Comply With 
Federal and State Requirements
  Massachusetts Medicaid Paymen, tAs -t0o1 R-1ed2s-t0o0n0e0 R8e  habilitation and Nursing Center Did Not Always 
Comply With Federal and State Requirements
  Massachusetts Medicaid Payments to Newton ,H Ae-a0l1th-1 C2a-0re0 C0e0n7t er Did Not Always Comply With 
Federal and State Requirements
  Massachusetts Medicaid Paymen, tAs -t0o1 C-1al2v-i0n0 C0o1o3li dge Nursing and Rehabilitation Center for 
Northampton Did Not Always Comply With Federal and State Requirements
  Review of Medicaid Personal Care Claims Submitted by Providers in New Jers, eAy-01-12-00012 
, A-02-09-01002 
  Page 29  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
  Review of Medicaid Claims Submitted by Continuing Day Treatment Providers in New York State 
Audit
  Review, A o-0f M2-e0d9i-c0a1id0 2P3ay ments for Services Provided Under New Jerseys Section 1915(c) Community 
Care Waiver by Bancroft NeuroHealth From January 1, 2005, Through December 31, 20
07,  
  NA-e0w2 J-e0r9s-e0y1 D0i3d4 N ot Always Claim Federal Medicaid Reimbursement for Personal Care Services Made 
by Bayada Nurses, Inc., in Accordance With Federal and State Requirements
  Review of Selected Medicaid Home Health Services Claims Made by Jewish H,o Am-e0 2a-n1d0 H-0o1s0p0it1a l 
Lifecare Community Services -- Manhattan LTHHCP Audit
  New York Claimed Some Unallowable Costs for Services by,  AN-e0w2 -Y1o0rk-0 C1i0ty0 2P roviders Under the 
States Developmental Disabilities Waiver Program
  Review of Medicaid Payments for Services Under Ne, wA -J0er2s-e1y0s- 0S1e0ct2io7n  1915(c) Community Care 
Waiver Program From January 1, 2005, Through December 31, 2007
  Review of Personal Care Services Under Maryland's Medicaid State Pl, aAn-02-10-01029 
  West Virginia Complied With Certain Federal Requirements for Most of t,h Ae- 0Pe3r-s1o1n-a0l0 C2a0r0e  Services 
Claimed for Its Aged   Disabled Waiver Program
  South Carolina Claimaendd Some Unallowable Room-a,n Ad--0B3o-a1r1d -C0o0s2ts0 5U nder the Intellectual and 
Related Disabilities Waiver
  Review of New Mexico Med,i cAa-i0d4 P-e1r1s-o0n4a0l 1C2a re Services Provided by Ambercare Home Health
,  
  RAe-0vi6e-w0 9o-f0 N0e0w6 2M exico Medicaid Personal Care Services Provided by Heritage Home Health Care
,  
  RAe-0vi6e-w0 9o-f0 N0e0w6 3M exico Medicaid Personal Care Services Provided by Coordinated Home Health Care
, 
  RAe-0vi6e-w0 9o-f0 L0o0u6is4i ana Medicaid Personal Care Services Provided by American Pride Caregivers
, LLC,  
  RAe-0vi6e-w0 9o-f0 N0e1w0 7M exico Medicaid Personal Care Services Provided by Clovis Homecare, Inc
.,  
  MA-i0ss6o-u0r9i- C0l0a1im17e d Federal Reimbursement for Unallowable Personal Care Services
  Federal Survey Requirements Not Always Met for Three California Nursing Homes,  PAa-0rt7ic-1ip1a-t0in3g1 7in1  
the Medicare and Medicaid Programs
, A-09-11-02019 
Medicaid Prescription Drug Claims 
  Review of Drug Costs to Medicaid Pharmacies and Their Relation to Benchmark Prices
,  
  MA-u0l6ti--1S1ta-t0e0 R0e0v2ie w of the Centers for Medicare & Medicaid Services Medicaid Drug Expenditures
,  
A-07-10-06003 
  Page 30  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
  Review of Prescribed Drug Costs in the Colorado Medicaid Family Planning Program
, A-07-11-
01095 
Other Medicaid Services 
  Review of Medicaid Payments for School-Based Health Services Made to Manchester, New 
Hampshire
  Rhode Islan, dA D-0i1d -N1o0t- 0A0lw01a4ys  Comply With State Requirements on Medicaid Payments for Hospice 
Services
  Rhode Is,l Aan-0d1 H-1o1sp-0ic0e0 G0e5n eral Inpatient Claims and Payments Did Not Always Meet Federal and 
State Requirements
  Review of Medicaid ,P Aa-y0m1e-1n2ts- 0fo0r0 N0o2n emergency Medical Transportation Services Claims Submitted 
by Providers in New York City
  Review of Medicaid Payments,  fAo-r0 N2o-0n8em-0e1r0g1e7n cy Medical Transportation Services Claims Submitted 
by Providers in New York State
  Review of Medicaid Claims for A, Adu-0lt2 M-0e9n-t0a1l 0H2e4a lth Rehabilitation Services Made by Community 
Residence Providers In New Jersey
  Review of Medicaid Payments to E,x Acl-u0d2e-d0 9or-0 T1e0rm28in ated Durable Medical Equipment Suppliers in 
Florida During Calendar Year 2009
  Ohio Medicaid Costs for Home Blood, A-G-l0u4c-o1s1e -T0e7s0t 2S0tr ips Could Be Reduced by Approximately 
50 Percent
  Indiana Re,d Au-c0e5d- M11e-d0ic0a0i9d8 C ost s for Home Blood-Glucose Test Strips by Approximately 50 Percent 
Using Manufacturer Rebates
  Review of North Dakota's Me,d Aic-a0i5d- 1F2ee-0 S0c0h1ed1u le Rates for Home Blood Glucose Test Strips
,  
  RAe-0vi5e-w1 2o-f0 C0o0s1ts9 f o r Inpatient Services in the Colorado Medicaid Family Planning Program
,  
  RAe-0vi7e-w1 1o-f0 C1o0lo9r7a do Direct Medical Service and Specialized Transportation Costs for the Medicaid 
School Health Services Program for State Fiscal Year 2008
  Oregon Improperly Claimed Federal Reimbursement for M,e Adi-c0a7i-d1 F1a-0m4il1y8 P5l anning Services 
Provided Under the Family Planning Expansion Project
  Hawaii Claimed Unallowable Medicaid Reimbursement,  fAo-r0 N9o-1n1em-0e2r0g1e0n cy Medical Transportation 
Services Furnished by Taxi Providers
, A-09-11-02047 
Medicaid Administration 
  Maine Did Not Always Make Correct Medicaid Claim Adjustments
  Review of Medicaid Administrative Costs Claimed by New Jersey fo, rA S-0ta1t-e1 F2i-s0c0a0l 0Ye1a r 2007
,  
A-02-07-01050 
  Page 31  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
  Review of Medicaid Administrative Costs Claimed by New Jersey for State Fiscal Years 2005 and 
2006
  New J, eAr-s0e2y -G0e8n-e0r1a0ll0y9 R eported Medicaid Overpayments in Accordance With Federal Regulations
,  
  RAe-0vi2e-w1 0o-f0 t1h0e0 Q9u arterly Medicaid Statement of Expenditures for the Medical Assistance Program in 
the U.S. Virgin Islands for the Quarter Ended September 30, 2009
  Medicaid Rates for New York State Developmental Centers May B,e A E-x0c2e-s1si1v-e01004 
  Review of Virginias Buy-In of Medicare Part B Premiums for Medicaid Benef,i Aci-a0r2ie-s1 1Fr-0om10 J2a9n uary 
2008 Through December 2009
  Pennsylvania Did Not Refund th, Ae -F0u3ll- 1F0ed-0e0ra2l0 S1h are of Recouped Excess Capitation Payments From 
the Medicaid Behavioral HealthChoices Program
  Delaware Did Not Comply With Federal Requirem, eAn-0ts3 T-1o0 R-e0p0o2r0t 4A ll Medicaid Overpayment 
Collections
  Pennsylvan,i Aa -C0l3a-im11e-d0 M02e0d3ic aid Administrative Costs for Provider Training Under Its Restraint 
Reduction Initiative
  Maryland Claimed M, Aed-0ic3a-i1d1 A-d0m02in0i9s trative Costs for Unallowable Remedial and Training Services
,  
  NA-o0r3th-1 C2a-r0o0li2n0a4 I ncorrectly Claimed Enhanced Federal Reimbursement for Some Medicaid Services 
That Were Not Family Planning
  North Carolina Incorrectly Claim, Aed-0 E4n-h1a0n-0c1ed0 8F9ed eral Reimbursement for Some Medicaid Waiver 
Services That Were Not Family Planning
  Wyoming Incorrectly Claimed Enhanced ,R Ae-i0m4b-u1r0s-e0m10en9t1 f or Medicaid Family Planning Sterilization 
Costs
  Alaba, mA-a0 I7m-1p1ro-0p1er1l0y0 C laimed Federal Funds for CHIP Enrollees Who Had Medicaid or Other Health 
Insurance Coverage
  Review of Michigan ,M Ae-d0i4c-a1i1d -P0a8y0m0e8n ts to Terminated Providers for Posttermination Services
,  
  IAll-i0n5o-i1s 0D-i0d0 N0o8t2 R eport All Medicaid Overpayments In Accordance With Federal Requirements
,  
  MA-i0ch5i-g1a1n-0 D0i0d4 N4o t Perform Eligibility Redeterminations at Least Every 12 months for Wayne County 
Medicaid Beneficiaries
  Review of Illinois Repo,r Ati-n0g5 o-1f 1F-u0n0d0 R4e5c overies in the Appeals Process on the Form CMS-64
,  
  RAe-0vi5e-w1 1o-f0 A0r0k5a2n sas Reporting Fund Recoveries for Federal and State Medicaid Programs on the 
CMS-64 Report for State Fiscal Year 2009
  Review of Oklahoma Collections for the M,e Ad-ic0a6l- A10ss-i0st0a0n5c1e  Program for Calendar Years 2004 
Through 2009
, A-06-10-00057 
  Page 32  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
  Texas Did Not Report Excess Contractor Profits in Accordance With Federal Regulations
,  
  SAt-a0t6e-s1 I0n-a0p0p0r6o2pr iately Retained Federal Funds for Medicaid Contractors for the First Recovery Act 
Quarter
  Review o, fA K-0a6n-s1a1s -M0e0d0i6c4ai d Payments for the School District Administrative Claiming Program 
During the Period April 1, 2006, Through March 31, 2009
  Review of the Quarterly Medicaid Statement of Expenditu,r Aes- 0fo7r- 1th0e- 0M4e1d6i8ca l Assistance Program in 
Colorado
  Review of,  tAh-e0 7Q-u1a1r-t0e2rl7y5 M8e dicaid Statement of Expenditures for the Medical Assistance Program in 
Nebraska
  Review of,  NAe-b0r7a-s1k1a-0s 2M7e5d9i caid Payments for Dual Eligible Individuals Medicare Part A Deductibles 
and Coinsurance
  Nebraska Did No,t A P-r0o7p-e1r1ly-0 P3a1y6 S1o me Medicare Part B Deductibles and Coinsurance
, A-07-11-
  0M3o1n6ta8n a Did Not Properly Pay Medicare Part B Deductibles and Coinsurance
  Review of ARRA Medicaid Prompt Requirements in Nebraska , A-07-11-03172 
  Colorado Did Not Always Identify or Prevent Excluded Provid,e Ars-0 F7r-o1m1 -P0a6r0ti1c9ip ating in the Medicaid 
Program
  Not All of,  CAo-0lo7r-a1d1o-0s 6C0la2i6m ed State CHIP Expenditures Were Allowable
  Most of Missouris Medicaid Expenditures for the Quarter Ended March,  3A1-0, 270-1029-, 0W2e7r8e0 A dequately 
Supported and Allowable
  Review of the Quarterly M, eAd-i0c7a-id1 2S-t0a3te1m74en t of Expenditures for the Medical Assistance Program in 
Washington State
  Arizona Improper,l yA C-0la9i-m10ed-0 F2e0d1e3ra l Reimbursement for Medicare Part B Premiums Paid on Behalf 
of Medicaid Beneficiaries
  Nevada Improperly Claim, eAd- 0F9ed-1e1ra-0l 2R0ei0m9b ursement for Medicare Part B Premiums Paid on Behalf 
of Medicaid Beneficiaries
  Oregon's Internal Control,s A W-0e9re-1 S1u-b0s2t0an2t4i ally Adequate To Prevent Medicaid Payments to Excluded 
Providers
  Contract P, Aro-v0i9si-o1n1s- 0fo2r0 t4h2e  Hawaii QUEST Expanded Access Risk Share Program Not Implemented
,  
A-09-12-02006 
Medicaid Information Technology  
  Information Technology General Controls Audit of the State of Ohio of Client Registry Information 
System - Enhanced (CRIS-E)
  Information Technology Gen, eAr-a0l 5C-o1n0t-r0o0ls0 A6u4d  it of the State of Minnesota MMIS
  Audit of OHCA's IT Controls , A-05-11-00014  
, A-06-10-00081  
  Page 33  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
  Audit of Arkansas IT Controls Over the Medicaid Program
  Audit of Louisiana IT Controls Over the Medicaid Program, A-06-11-00005  
  Audit of IT Controls for USB Devices at Children's Medical C, eAn-t0e6r- o1f1 D-0a0ll0a2s0   
  Audit of IT Controls for USB Devices at Presbyterian Hospital , A-06-12-00016  
  Audit of IT Controls for USB Devices at Baptist Health Medica,l A C-e0n6t-e1r2-00018  
  Review of General Controls for Kansas Medicaid Eligibility Determina,t Aio-n0s6 a-1t 2P-o0li0c0y1 S9tu  dies 
Incorporated
  Review of Cal,O Ap-t0im7-a1's0 -I0nf0o3r4m6a  tion  ystem  eneral  ontrols Over Its Medi-Cal Claims Processing 
ystem
S G C
S , A-09-11-03008  
 
 
 
  Page 34  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
Evaluation and Inspection Reports 
 
  Medicaid Managed Care: Fraud and Abuse Concerns Remain Despite Safeguards
  Oversight of Quality of Care in Medicaid Home and Community-based Services W, aOiEveI-r0 P1r-o0g9r-a0m05s50   
 
  MOEeId-i0c2ai-d0 8N-e0w0 1Y7o0rk  State Medicaid Fraud Control Unit:  2011 Onsite Review
  States Collection of Medicaid Rebates for Drugs Paid Through Medicaid Man, aOgEeId-0 C2a-r1e1 -00440 
Organizations
  Vaccines for Ch, iOldErIe-n0 3P-r1o1g-r0a0m4:8  0V ulnerabilities in Vaccine Management
  Early Assessment of Review Medicaid Integrity Contractors , OEI-04-10-00430   
  Early Assessment of Audit Medicaid Integrity Contractors , OEI-05-10-00200   
  Status of 244 Provider Audits Identified Using Review Med, iOcaEiId-0 I5n-t1eg0r-i0t0y 2C1o0n t r actor Analysis
,  
  EOxEcIl-u0d5e-d1 0P-r0o0vi2d0e1rs  in Medicaid Managed Care Entities
  Medicaid Payments for Therapy Services in Excess of  , OEIL-i0m7i-t0s9-00630   
  Missouri State Medicaid Fraud Control Unit:  2011 OnSstiatete R eview, OEI-07-10-00370   
  Kansas State Medicaid Fraud Control Unit:  2012 Onsite Review , OEI-07-11-00750   
  Excluded Individuals Employed by Providers Enrolled in Medica,i dO EMIa-0n7a-g1e2d- 0C0ar2e0 E0n   tities
,  
  TOhEeI- M07e-d0ic9a-0re0-6M3e2d icaid (Medi-Medi) Data Match Program
, OEI-09-08-00370 
 
 
 
   
  Page 35  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix A  Reports Issued in FY 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  http://oig.hhs.gov 
 
 
 
  Page 36  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Appendix B 
OIG Open Recommendations  
 
Carried Forward From Prior Fiscal Years 
   Compendium of Unimplemented 
The Medicaid-related recommendations selected for this appendix were described in the 
Recommendations
December 2 012 Editionof the Office of Inspector Generals (OIG)
.  The recommendations, which are addressed to the Centers for Medicare 
& Medicaid Services (CMS), represent significant opportunities to improve program management and 
save tax dollars through legislative, regulatory, or administrative actions.  
The recommendations below are aligned with four of the key management and performance 
challenges that OIG identified for the Department of Health and Human Services (HHS) at the close of 
fi scal year (FY) 2012. 
  Identifying and Reducing Improper Payments 
  Preventing and Detecting Fraud 
  Ensuring Patient Safety and Quality of Care 
Avoiding Waste and Promoting Value 
Medicaid section
In many instances, CMS has made significant progress with regard to the prior-period items.  More 
Compendium, 
detail on the prior-period items in this appendix is provided in the   of OIGs 
December 2012  available on our Web site at https://oig.hhs.gov. 
Identify and Reduce Improper Payments 
Improper Payments  Home HealthDuplicate Medicaid and Medicare Home Health Payments  Medical 
Supplies and Therapeutic Services 
OEI-07-06-00640  Continuing to monitorWe recommend that CMS ensure that Medicaid does not 
pay home health providers for nonroutine medical supplies and therapeutic 
services paid by Medicare.  When Medicaid and Medicare cover particular supplies 
and services, Medicaid is the payer of last resort and Medicare should pay first for 
services provided to individuals who meet dual-eligibility requirements.  Annual 
Compendium
savings are probable but not estimated.  More detail is available in the Medicaid 
section of OIGs December 2012  , p. 124 (Home HealthPrevent 
Duplicate Medicaid and Medicare Payments). 
Improper Payments  Personal Care ServicesPayments Made in Error for Personal Care Services During 
  Institutional Stays 
OEI-07-06-00620  Continuing to monitorWe recommend that CMS enforce Federal Medicaid 
payment policies that prohibit Medicaid reimbursement for personal care services 
 
(PCS) provided over a range of dates if the range includes dates on which the 
beneficiary was institutionalized and work with States to reduce erroneous 
Medicaid payments for PCS provided during institutional stays.  Annual savings are 
  Page 37  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Compendium
probable but not estimated.  More detail is available in the Medicaid section of OIGs 
December 2012  , p. 125 (Personal Care ServicesEnforce Policies 
Prohibiting Payments for Personal Care Services for Institutionalized Beneficiaries). 
Improper Payments  Personal Care ServicesInappropriate Claims for Medicaid Personal Care Services 
 
OEI-07-08-00430  Continuing to monitorWe recommend that CMS work with States to ensure that 
Medicaid claims for PCS provided by attendants with undocumented qualifications 
Also See: 
are not paid and take action regarding the inappropriately paid claims identified in 
OEI-07-05-00250   Compendium
our review.  Annual savings are probable but not estimated.  More detail is available 
 and OIG 12-12-01 
in the Medicaid section of OIGs December 2012  , p. 127 (Personal Care 
ServicesEnsure that Medicaid Claims Provided by Attendants With 
Undocumented Qualifications Are Not Paid.) 
Improper Payments  Medicaid Managed Care Encounter Data  Collection and Use 
 
OEI-07-06-00540  Continuing to monitorWe recommend that CMS enforce Federal requirements 
and  that States include managed care encounter data in Medicaid Statistical Information 
OEI-04-07-00240  System (MSIS) submissions.  The Affordable Care Act,  6402(c), authorizes the 
Secretary to withhold Federal matching payments for States that fail to report 
enrollee encounter data in the MSIS.  Encounter data are the primary records of 
Medicaid services provided to beneficiaries enrolled in capitated Medicaid 
Compendium
managed care.  Annual savings are probable but not estimated.  More detail is 
available in the Medicaid section of OIGs December 2012  , p. 131 
(Managed CareEnforce Federal Requirements for Submitting Medicaid Managed 
Care Encounter Data). 
Prevent and Detect Medicaid Fraud  
Ensure Patient Safety and Quality of Care 
Quality of Care  Children Most Medicaid Children in Nine States Are Not Receiving All Required 
  Preventive Screening Services 
OEI-05-08-00520  Continuing to monitorWe recommend that CMS require States to report 
See also:  beneficiaries vision and hearing screenings; collaborate with States and providers to 
OEI-02-00-00362  develop effective strategies to encourage beneficiary participation in Medicaids 
Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) screenings; 
collaborate with States and providers to develop education and incentives for 
providers to encourage complete medical screenings; and identify and disseminate 
promising State practices for increasing childrens participation in EPSDT screenings 
Compendium
and providers delivery of complete medical screenings.  More detail is available in 
the Medicaid section of OIGs December 2012  , p. 129 (Improve 
Medicaid Childrens Utilization of Preventive Screening Services).   
  Page 38  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Avoid Waste and Promote Value 
Wasteful Spending  Prescription DrugsReplacing Average Wholesale Price:  Medicaid Drug Payment 
Policy 
OEI-03-11-00060   Continuing to monitorWe recommend that CMS develop a national benchmark 
and  that accurately reflects actual acquisition costs; encourage States to consider it 
A-06-11-00002  when determining Medicaid reimbursement for prescription drugs; and enable 
States to develop different reimbursement benchmarks for single-source drugs, 
brand-name multiple-source drugs, and generic multiple-source drugs.  Annual 
Compendium
savings are probable but not estimated.  More detail is available in the Medicaid 
section of OIGs December 2012  , p. 98 (Prescription DrugsDevelop 
National Pharmacy Acquisition Cost Data as a Benchmark for Reimbursing 
Prescription Drugs). 
Wasteful Spending  Prescription DrugsFDAs Approval Status of Drugs Paid for by Medicaid 
 
OEI-03-08-00500  Continuing to monitorWe recommend that CMS work with the Food and Drug 
and  Administration (FDA) to identify any potentially problematic Medicaid payments 
OEI-03-08-00300  for drugs that have not been approved by FDA.  We also recommend that FDA work 
with CMS and Congress to compel manufacturers to list all approved products with 
FDA before the products become eligible for Medicaid payment.  Annual savings are 
probable.  We estimated $20 million quarterly on the basis of an analysis of 2007 
Compendium
fourth-quarter Medicaid expenditures.  More detail is available in the Medicaid 
section of OIGs December 2012  , p. 100 (Prescription DrugsRequire 
Manufacturers To List All Approved Products With the Food and Drug 
Administration as a Requirement of Medicaid Eligibility). 
Wasteful Spending  Prescription DrugsDetermining Average Manufacturer Prices for Prescription Drugs 
  Under the Deficit Reduction Act of 2005 
A-06-06-00063  Continuing to monitorWe recommend that CMS clarify specified terms and the 
  treatment of certain aspects of determining average manufacturer prices (AMP) 
that we identified, address the various industry group concerns about AMP that we 
See also: 
reported, and encourage States to analyze the relationship between AMP and 
Advisory Bulletin 
pharmacy acquisition costs to ensure that Medicaid appropriately reimburses 
Compendium
pharmacies.  Annual savings are probable but not estimated.  More detail is 
available in the Medicaid section of OIGs December 2012  , p. 102 
(Prescription DrugsClarify and Improve Program Guidance to Drug 
Manufacturers on Average Manufacturer Price Issues). 
Wasteful Spending  Prescription DrugsNeed To Establish Connection Between the Calculation of 
  Medicaid Drug Rebates and Reimbursement for Medicaid Drugs 
A-06-97-00052  Continuing to monitorWe recommend that CMS seek legislation that would 
See also:  require Medicaid drug rebates and reimbursements to be developed using the same 
A-06-06-00063   basis or review viable alternatives to the current program.  Annual savings probable 
Compendium
but not estimated.  More detail is available in the Medicaid section of OIGs 
December 2012  , p. 104 (Prescription DrugsEstablish a Connection 
Between the Calculations of Medicaid Drug Reimbursements and Rebates). 
 
  Page 39  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Wasteful Spending  Prescription Drug RebatesStates Collection of Medicaid Rebates for 
Physician-Administered Drugs 
OEI-03-09-00410  Continuing to monitorWe recommend that CMS ensure that all States are 
See also:  accurately identifying and collecting rebates owed by manufacturers for these 
A-06-10-00011  drugs, work with States to develop guidance for implementing system edits that 
A-06-03-00048  increase the efficiency of physician-administered drug claim reviews, work with 
OEI-03-02-00660    States to administer guidance to providers and Medicare contractors about the 
physician-administered drug rebate requirements, ensure that the crosswalk file (a 
   
CMS data file that links two types of commonly used drug codes) is complete and 
accurate and identifies rebateable physician-administered drugs, and take action 
against States that do not meet statutory requirements to collect rebates on 
physician-administered drugs.  Annual savings are probable but not estimated.  
Compendium
More detail is available in the Medicaid section of OIGs December 
2012  , p. 105 (Prescription DrugsEnsure That States Are Accurately 
Identifying and Collecting Rebates on Physician-Administered Drugs). 
Wasteful Spending  Prescription Drug RebatesReview of Generic Drug Price Increases 
 
A-06-07-00042  Continuing to monitorWe recommend that CMS seek legislative authority to 
See also:  extend the additional rebate provisions for brand-name drugs to generic drugs.  
OEI-03-10-00320   Annual savings probable but not estimated.  An August 2011 OIG report estimated 
that rebates reduced Medicaid's expenditures for selected generic drugs by only 
3 percent in 2009 ($13.5 million out of $449 million) compared to 45 percent for 
Compendium
selected brand-name drugs.  More detail is available in the Medicaid section of OIGs 
December 2012  , p. 107 (Prescription Drug RebatesExtend the 
Additional Rebate Payment Provisions for Brand-Name Drugs to Generic Drugs). 
Wasteful Spending  340B DrugsState Medicaid Policies and Oversight Activities Related to 
  340B-Purchased Drugs 
OEI-05-09-00321  Continuing to monitorWe recommend that CMS inform States about tools they 
See also:  can use to identify claims for 340B-purchased drugs and that the Health Resources 
OIG Testimony  and Services Administration share 340B ceiling prices with States.  Annual savings 
Compendium
probable but not estimated.  More detail is available in the Medicaid section of OIGs 
December 2012  , p. 109 (Prescription DrugsImprove the Policies 
and Information Available for State Medicaid Agencies To Oversee Reimbursements 
for 340B-Purchased Drugs). 
Wasteful Spending  Payments to Public ProvidersReview of Medicaid Enhanced Payments to Local 
  Public Providers and the Use of Intergovernmental Transfers 
A-03-00-00216  Continuing to monitorWe recommend that CMS issue definitive guidance for 
See Also:  calculating enhanced payment limits, which should include using facility-specific 
A-02-11-01029  limits that are based on actual cost report data (with the effect of limiting enhanced 
and OIG Testimony  payments to cost) and require that returns of Medicaid payments by a county or 
in 2012 and 2005   local government to the State be declared refunds of those payments and thus be 
used to offset the Federal share generated by the original payments.  Annual savings 
probable.  A January 2007 proposed rule that effectively addressed our concerns 
was estimated to result in $120 million in savings during the first year and 
$3.87 billion in savings over 5 years; however the final rule was vacated and 
Compendium
withdrawn.  (75 Fed. Reg. 73972, November 30, 2010.)  More detail is available in 
the Medicaid section of OIGs December 2012  , p. 111 (Payments to 
  Page 40  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Public ProvidersLimit Medicaid Payments to Cost and Require That Payments 
Returned by Public Providers Be Used To Offset the Federal Share). 
Wasteful Spending  Uncollected Refunds Quarterly Credit Balance Reporting Requirements for 
  Medicaid 
A-05-93-00107  Continuing to monitorWe recommend that CMS establish a national Medicaid 
and  credit balance reporting mechanism similar to that used for Medicare Part A and 
A-04-92-01023  require its regional offices to actively monitor the reporting mechanism that is 
Compendium
established.  Annual savings are probable but not estimated.  More detail is 
 
available in the Medicaid section of OIGs December 2012  , p. 114 
(Uncollected RefundsEstablish a National Medicaid Credit Balance Reporting 
Mechanism To Monitor Refundable Amounts in Providers Patient Accounts). 
Wasteful Spending  Third-Party LiabilityEight-State Review of the Ability of Noncustodial Parents To 
  Contribute Toward the Medical Costs of Title IV-D Children That Were Paid Under the 
Medicaid Program 
A-01-03-02501  Continuing to monitorWe recommend that CMS clarify third-party liability 
and  regulations to help State Medicaid agencies coordinate with States Title IV-D child 
  A-01-03-02502   support enforcement programs to collect Medicaid costs from noncustodial parents 
with the ability to contribute medical support; seek legislation that would allow 
States to accumulate medical support payments to offset Medicaid fee-for-service 
(FFS) costs for a reasonable period; determine whether more Federal funds are 
needed to help States interface their databases; implement a process to collect 
program costs from noncustodial parents; and as appropriate, provide funds for 
this purpose.  Annual savings are probable but not estimated.  On the basis of a pair 
of eight-State reviews, we estimated savings at $99 million for Medicaid and 
$14 million for the Childrens Health Insurance Program for the selected States over 
Compendium
2 years.  More detail is available in the Medicaid section of OIGs December 
2012  , p. 116 (Third-Party LiabilityEnsure That States Collect From 
Noncustodial Parents With the Ability To Contribute Toward Their Childrens 
Medicaid or Childrens Health Insurance Program (CHIP) Costs). 
Wasteful Spending  Hospitals Medicaid Hospital Outlier Payment Followup for Fiscal Years 2004 
  Through 2006 
A-07-10-04160  Continuing to monitorWe recommend that CMS encourage all States that make 
Medicaid outlier payments to use the most recent cost-to-charge ratios to calculate 
those payments, reconcile them upon cost report settlement or use an alternative 
method to ensure that outlier payments are more closely aligned with actual costs, 
and amend their State plans accordingly.  Annual savings are probable but not 
Compendium
estimated.  More detail is available in the Medicaid section of OIGs December 
2012  , p. 118 (Hospital PaymentsEncourage States To Update 
Hospital Outlier Payment Methodologies). 
Wasteful Spending  Adult Day Health CareMedicaid Services Provided in an Adult Day Health Setting 
 
OEI-09-07-00500   Continuing to monitorWe recommend that CMS specify what minimum services 
are required to qualify for Medicaid reimbursement of adult day health services, 
direct States to enforce supervision requirements for staff who provide therapy 
services in Medicaid adult day health centers, and take appropriate action with 
regard to the adult day health centers that did not respond to repeated data 
  Page 41  HHS Office of Inspector General    
Medicaid Integrity Program Report, FY 2012    Appendix BOIG Recommendations  
 
 
Compendium
requests.  Annual savings probable but not estimated.  More detail is available in the 
Medicaid section of OIGs December 2012  , p. 119 (Adult Day Health 
SettingsEnsure That Services Provided Qualify for Medicaid Reimbursement). 
 
 
 
 
  Page 42  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
Appendix C 
Fiscal Year 2013 Medicaid Work Plan 
 
Work Plan
The audit and evaluation projects below were drawn from the Medicaid section of the OffiWceo orkf  Plan
Inspector General (OIG)   for Fiscal Year (FY) 2013.  In most instances, additional 
information, such as definitions of key terms and legal citations, is provided in the source  .  
For brevity, the summaries below include only the stated objectives. 
Prescription Drug Reviews 
Patient Safety and Quality of CareClaims for and Use of Atypical Antipsychotic Drugs Prescribed to 
Children in Medicaid  
We will determine the extent to which children ages 18 and younger had Medicaid claims for atypical 
antipsychotic drugs during the selected timeframe.  On the basis of medical record reviews, we will 
also determine the extent to which the atypical antipsychotic drug claims were for off-label uses and 
for indications not listed in one or more of the approved drug compendia.  (OEI; 07-12-00320; 
expected issue date:  FY 2014; work in progress) 
Drug PricingCalculation of Average Manufacturer Prices 
We will review selected drug manufacturers to evaluate methodologies they use to calculate the 
average manufacturer price (AMP) and the best price for the Medicaid drug rebate program and for 
drug reimbursement.  We will also determine whether the methodologies are consistent with 
statutes, regulations, and manufacturers rebate agreements and the Centers for Medicare & Medicaid 
Services (CMS) Drug Manufacturer Release(s).  (OAS; W-00-11-31202; various reviews; expected 
issue date:  FY 2013; work in progress) 
Drug PricingState Maximum Allowable Cost Programs  
We will review State Maximum Allowable Cost (State MAC) programs to determine how State 
MAC lists are developed, how State MAC prices are set, and how State MAC prices compare to the 
Federal Upper Limit (FUL) amounts.  This review will compare State MAC programs to determine 
which ones are most successful in reducing Medicaid expenditures.  (OEI; 03-11-00640; expected 
issue date:  FY 2013; work in progress) 
Drug PricingManufacturer Compliance With Average Manufacturer Price Reporting Requirements  
We will review manufacturer compliance with AMP reporting requirements and determine what 
percentage of manufacturers complied with the requirements in 2011.  We will determine whether 
stepped-up enforcement actions by CMS and OIG are reflected in increased compliance by 
manufacturers.  (OEI; 00-00-00000; expected issue date:  FY 2014; new start) 
Drug PricingDrugs Purchased Under Retail Discount Generic Programs  
We will review Medicaid claims for generic drugs to determine the extent to which large chain 
pharmacies are billing Medicaid the usual and customary charges for drugs provided under their 
retail discount generic programs.  We will also examine CMSs policies and procedures for ensuring 
that Medicaid is billed properly under retail discount generic programs.  (OEI; 00-00-00000; 
expected issue date:  FY 2014; new start)  
  Page 43  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
Manufacturer RebatesState's Collection of Rebates on Physician-Administered Drugs  
We will determine whether States have established adequate accountability and internal controls for 
collecting Medicaid rebates on physician-administered drugs.  We will assess States processes for 
collecting national drug code information on claims for physician-administered drugs and 
subsequent processes for billing and collecting rebates.  (OAS; W-00-12-31400; various reviews; 
expected issue date:  FY 2013; work in progress) 
Manufacturer RebatesStates Collection of Supplemental Rebates  
We will determine whether increases in the basic Federal minimum rebate amount required by the 
Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) are being collected from 
drug manufacturers by States.  We will also determine the dollar amount of supplemental drug 
rebates that States negotiated and collected between 2008 and 2011.  (OEI; 03-12-00520; expected 
issue date:  FY 2013; work in progress) 
Manufacturer RebatesImpact of the Deficit Reduction Act of 2005 on Rebates for Authorized Generic 
Drugs  
We will review drug-pricing and rebate data that drug manufacturers report to State Medicaid 
agencies to determine the extent to which manufacturers are reporting pricing data and paying 
rebates for authorized generic drugs.  We will also determine to what extent Medicaid rebates have 
changed since the implementation of certain provisions and whether the number of new authorized 
generics changed after implementation.  (Deficit Reduction Act of 2005,  6001.)  (OEI; 00-00-00000; 
expected issue date:  FY 2014; new start) 
Manufacturer RebatesZero-Dollar Unit Rebate Amounts 
We will determine whether States have procedures to track and collect drug rebates for drugs with 
zero-dollar unit rebate amounts (URA).  We will determine each States rebate collection rate for 
high-dollar drugs with zero-dollar URAs in the fourth quarter of 2010 and the first quarter of 2011.   
(OEI; 03-11-00470; expected issue date:  FY 2013; work in progress) 
Manufacturer RebatesNew Formulations of Existing Drugs  
We will review drug manufacturers compliance with Medicaid drug rebate requirements for drugs 
that are new formulations of existing drugs.  We will also determine whether manufacturers have 
correctly identified all their drugs that are subject to a new provision in law.  A recent change 
increases the additional rebate for drugs that are new formulations of existing drugs if certain 
conditions are met.  (OAS; W-00-13-31451; various reviews; expected issue date:  FY 2013; new start; 
Affordable Care Act) 
Manufacturer RebatesStates Efforts and Experiences With Resolving Rebate Disputes  
We will review the causes of and resolutions to Medicaid rebate disputes and the methods States use 
to resolve them.  (OEI; 05-11-00580; expected issue date:  FY 2013; work in progress) 
Manufacturer RebatesFederal Share of Rebates  
We will review States reporting of the Federal share of Medicaid rebate collections.  We will 
determine whether States are correctly identifying and reporting the increases in rebate collections.  
(OAS; W-00-13-31450; various reviews; expected issue date:  FY 2013; new start; Affordable Care 
Act) 
  Page 44  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
Home, Community, and Personal Care Services 
Home Health ServicesDuplicate Payments by Medicare and Medicaid  
We will review Medicaid payments by States for Medicare-covered home health services to determine 
the extent to which both Medicare and Medicaid have paid for the same services.  (Social Security Act, 
 1902(a)(25).)  (OAS; W-00-13-31305; various reviews; expected issue date:  FY 2014; new start) 
Home Health ServicesScreenings of Health Care Workers  
We will review health-screening records of Medicaid home health care workers to determine 
whether the workers were screened in accordance with Federal and State requirements.   
(OAS; W-00-11-31387; W-00-12-31387; various reviews; expected issue date:  FY 2013; work in 
progress) 
Home Health ServicesProvider Compliance and Beneficiary Eligibility 
We will review home health agency (HHA) claims to determine whether providers have met 
applicable criteria to provide services and whether beneficiaries have met eligibility criteria.  
(OAS; W-00-10-31304; W-00-11-31304; W-00-12-31304; various reviews; expected issue date:  
FY 2013; work in progress) 
Home Health ServicesHomebound Requirements  
We will review CMS policies and practices for reviewing the sections of Medicaid State plans related 
to eligibility for home health services and describe how CMS intends to enforce compliance with 
appropriate eligibility requirements for home health services.  We will also identify the number of 
States that violate Federal regulations by inappropriately restricting eligibility for home health 
services to homebound recipients.  (OEI; 00-00-00000; expected issue date:  FY 2014; new start)  
Medicaid WaiversQuality of Care Provided Through Waiver Programs  
We will determine the extent to which Medicaid home and community-based services (HCBS) 
beneficiaries have service plans, receive the services in their plans, and receive services from 
qualified providers.  (OEI; 02-11-00700; expected issue date:  FY 2013; work in progress) 
Medicaid WaiversSupported Employment Services  
We will review Medicaid payments by States for supported employment services to determine 
whether such services were rendered in accordance with Federal and State requirements.  
(OAS; W-00-12-31463; various reviews; expected issue date:  FY 2013; work in progress) 
Medicaid WaiversAdult Day Health Care Services  
We will review Medicaid payments by States for adult day care services to determine whether the 
payments complied with certain Federal and State requirements.  (OAS; W-00-12-31386; various 
reviews; expected issue date:  FY 2013; work in progress)   
Medicaid WaiversUnallowable Room -and-Board Costs  
We will determine whether selected State Medicaid agencies claimed Federal reimbursement for 
unallowable room-and-board costs for HCBS-provided services pursuant to the Social Security Act, 
 1915(c).  We will determine whether payments made by States for HCBS included the cost of room 
and board and the method used to make that calculation.  (OAS; W-00-13-31465; various reviews; 
expected issue date:  FY 2014; new start) 
  Page 45  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
School-Based ServicesStudents With Special Needs 
We will review Medicaid payments by States for school-based services to determine whether the 
costs claimed for such services are reasonable and are properly allocated.  (OAS; W-00-11-31391; 
W-00-12-31391; various reviews; expected issue date:  FY 2013; work in progress) 
Community Residence Rehabilitation Services  
We will review Medicaid payments for beneficiaries who reside in community residences for 
people who have mental illnesses to determine whether States improperly claimed Federal financial 
participation (FFP).  (OAS; W-00-10-31087; W-00-11-31087; various reviews; expected issue date:  
FY 2013; work in progress) 
Continuing Day Treatment Mental Health Services 
We will review Medicaid payments to continuing day treatment (CDT) providers in one State to 
determine whether Medicaid payments by the State to CDT providers in that State are adequately 
supported.  (OAS; W-00-11-31128; W-00-12-31128; various reviews; expected issue date:  FY 2013; 
work in progress) 
Personal Care ServicesCompliance With Payment Requirements 
We will review Medicaid payments by States for personal care services to determine whether States 
have appropriately claimed FFP.  (OAS; W-00-10-31035; W-00-11-31035; W-00-12-31035; various 
reviews; expected issue date:  FY 2013; work in progress) 
Other Medicaid Services, Equipment, and Supplies  
Nursing Facility ServicesCommunicable Disease Care  
We will review claims by nursing facilities for communicable disease care to determine whether they 
complied with Federal and State requirements.  We will also examine patient safety consequences 
associated with nursing homes failure to comply with related communicable disease care 
requirements.  (OAS; W-00-13-31466; various reviews; expected issue date:  FY 2014; new start) 
Dental Services for ChildrenInappropriate Billing  
We will review Medicaid payments by States for dental services to determine whether States have 
properly claimed Federal reimbursement.  (OAS; W-00-10-31135; W-00-11-31135; W-00-12-31135;  
various reviews; expected issue date: FY 2013; work in progress) 
Dental Services for ChildrenBilling Patterns in Five States  
We will review billing patterns of pediatric dentists and their associated clinics in five selected States.  
Medicaid covers comprehensive dental care for approximately 30 million low-income children 
through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit.  
(OEI; 02-12-00330; expected issue date:  FY 2014; work in progress) 
Hospice ServicesCompliance With Reimbursement Requirements  
We will determine whether Medicaid payments by States for hospice services complied with Federal 
reimbursement requirements.  (OAS; W-00-11-31385; W-00-12-31385; various reviews; expected 
issue date:  FY 2013; work in progress) 
Family Planning ServicesClaims for Enhanced Federal Funding 
We will review family planning services in several States to determine whether States improperly 
claimed enhanced Federal funding for such services and the resulting financial impact on Medicaid.  
(OAS; W-00-10-31078; W-00-11-31078; W-00-12-31078; various reviews; expected issue date:  
  Page 46  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
FY 2013;  
work in progress) 
Transportation ServicesCompliance With Federal and State Requirements 
We will review Medicaid payments by States to providers for transportation services to determine 
the appropriateness of payments for such services.  (OAS; W-00-11-31121; W-00-12-31121; various 
reviews; expected issue date:  FY 2013; work in progress) 
Health-Care-Acquired ConditionsProhibition on Federal Reimbursements 
We will determine whether selected States made Medicaid payments for health-care-acquired 
conditions and provider-preventable conditions and quantify the amount of Medicaid payments for 
such conditions.  (OAS; W-00-13-31452; various reviews; expected issue date:  FY 2013; new start; 
Affordable Care Act) 
Medical Equipment and SuppliesPotential Savings From the Competitive Bidding Program  
We will determine cost savings for Medicare and Medicaid that could result from expanded use of 
competitive bidding for medical equipment and supplies.  (OEI; 06-12-00470; 00-00-0000; expected 
issue date:  FY 2014; work in progress) 
Medical Equipment and SuppliesOpportunities To Reduce Medicaid Payment Rates for Selected Items  
We will determine whether opportunities exist for lowering Medicaid payments for selected items of 
medical equipment and supplies.  We will also determine the amount of Medicaid savings that could 
be achieved for selected items through the use of rebates, competitive bidding, or other means.   
(OAS; W-00-12-31390; various reviews; expected issue date:  FY 2013; new start)  
Medical Equipment and SuppliesOpportunities To Reduce Medicaid Payment Rates for 
Blood-Glucose Test Strips  
We will determine whether opportunities exist for lowering payments for home blood-glucose test 
strips provided under Medicaid.  We will also review rebates that some States collected on test strips 
to determine whether the States properly reimbursed the Federal share of the rebates.    
(OAS; W-00-12-31390; W-00-13-31390; various reviews; expected issue date:  FY 2013; work in 
progress and new start) 
Medical Equipment and SuppliesStates Efforts To Control Costs for Disposable Incontinence Supplies  
We will review the extent to which State Medicaid programs have implemented measures aimed at 
controlling costs for disposable incontinence supplies.  We will also determine the cost savings 
created by these measures and the potential cost savings for States that have not implemented them.   
(42 CFR  440.70(b)(3).)  (OEI; 07-12-000710 expected issue date:  FY 2014; work in progress) 
State Management of Medicaid  
State Use of Provider Taxes To Generate Federal Funding  
We will review State health-care-related taxes imposed on various Medicaid providers to determine 
whether the taxes comply with applicable Federal requirements.  Our work will focus on the 
mechanism States use to raise revenue through provider taxes and determine the amount of Federal 
funding generated.  (OAS; W-00-12-31455; various reviews; expected issue date:  FY 2013; work in 
progress) 
State-Operated FacilitiesReasonableness of Payment Rates  
We will determine whether Medicaid payment rates to State-operated facilities are reasonable and 
are in accordance with Federal and State requirements.  We will determine in selected States the 
  Page 47  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
extent to which payments to providers may be excessive.  (OAS; W-00-12-31398; various reviews; 
expected issue date:  FY 2013; work in progress) 
State Upper-Payment-Limit-Related Supplemental Payments to Private Hospitals 
We will review supplemental payments by States to private hospitals to determine whether errors 
exist in such payments.  Federal funds are not available for Medicaid payments that exceed applicable 
upper payment limits (UPL).  (OAS; W-00-10-31126; W-00-11-31126; various reviews; expected 
issue date:  FY 2013; work in progress) 
State Use of Incorrect Federal Medical Assistance Percentage for Federal Share Adjustments  
We will review States Medicaid claims records to determine whether the States used the correct 
Federal Medical Assistance Percentage when processing claim adjustments reported on the Medicaid 
quarterly expenditure report (Form CMS-64).  (OAS; W-00-12-31460; various reviews; expected issue 
date:  FY 2013; work in progress) 
State Allocation of Medicaid Administrative Costs  
We will review administrative costs claimed by several States to determine whether they were 
properly allocated and claimed or directly charged to Medicaid.  (OAS; W-00-10-31123; 
W-00-11-31123; W-00-12-31123; various reviews; expected issue date:  FY 2013; work in progress) 
State Quarterly Expenditure Reporting on Form CMS-64CMS Oversight  
We will examine CMSs oversight of State quarterly expenditure reporting on Form CMS-64.  We will 
also identify opportunities to improve the accuracy of such reporting.  (OEI; 00-00-00000; expected 
issue date:  FY 2014; new start) 
State Medicaid Monetary DrawdownsReconciliation With Form CMS-64  
We will review the Medicaid monetary drawdowns that States received from the Federal Reserve 
System to determine whether they were supported by actual expenditures reported by the States on 
Form CMS-64.  (OAS; W-00-12-31456; various reviews; expected issue date:  FY 2013; work in 
progress) 
State Reporting of Medicaid Collections on Form CMS-64  
We will determine whether States accurately captured Medicaid collections on Form CMS-64, as well 
as returned the correct Federal share related to those collections.  (OAS; W-00-12-31457; various 
reviews; expected issue date:  FY 2013; work in progress) 
State Actions To Address Vulnerabilities Identified During CMS Reviews  
We will review corrective actions that State Medicaid agencies have implemented to address the 
findings and recommendations from State Medicaid program integrity reviews conducted by CMS.  
We will determine why States have not implemented all corrective actions, examine the followup CMS 
performed to ensure that corrective actions were taken by States, and examine the evidence CMS 
reviewed to ensure that corrective actions were implemented.  (OEI; 00-00-00000; expected issue 
date:  FY 2014; new start) 
State Buy-In of Medicare CoverageEligibility Controls 
We will review States Medicaid buy-in programs for Medicare Part B to determine whether States 
have adequate controls to ensure that Medicare premiums are paid only for individuals eligible for 
State buy-in coverage of Medicare services.  (OAS; W-00-10-31220; W-00-11-31220; 
W-00-12-31220; various reviews; expected issue date:  FY 2013; work in progress) 
  Page 48  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
State Medicaid Payments for Medicare Deductibles and Coinsurance  
We will determine whether States claimed Federal reimbursement for Medicaid payments for 
Medicare deductibles and coinsurance in excess of amounts authorized in the State plans.  (OAS; 
W-00-13-31464; various reviews; expected issue date:  FY 2014; new start) 
State Cost Allocations That Deviate From Acceptable Practices  
We will review public assistance cost allocation plans and processes for selected States to determine 
whether the States claimed Medicaid costs that were supported and allocated on the basis of random 
moment sampling systems that deviated from acceptable statistical sampling practices.   
(OAS; W-00-12-31467; various reviews; expected issue date:  FY 2014; work in progress)  
State Recovery Audit Contractor Performance and Results  
We will review the early performance and results of Recovery Audit Contractors in State Medicaid 
programs.  (OEI; 00-00-00000; expected issue date:  FY 2014; new start) 
State Enrollment and Monitoring of Medical Equipment Suppliers  
We will review State Medicaid agencies processes for enrolling and monitoring medical equipment 
suppliers.  We will conduct site visits to determine whether such suppliers complied with their State 
Medicaid agencies enrollment standards.  (OAS; W-00-12-31468; various reviews; expected issue 
date:  FY 2014; work in progress; Affordable Care Act)  
State Determinations of Hospital Provider Eligibility and Program Participation  
We will determine whether States appropriately determined hospital providers eligibility for 
Medicaid reimbursement.  Hospital providers are required to meet Medicare program participation 
requirements to receive Medicaid funding.  (OAS; W-00-12-31301; W-00-13-31301; various reviews; 
expected issue date:  FY 2013; work in progress) 
State Compliance With Estate Recovery Provisions of the Social Security Act  
We will determine whether States complied with requirements for recoveries from deceased 
Medicaid beneficiaries estates.  We will also determine whether States properly reported any such 
recoveries on Form CMS-64.  (OAS; W-00-12-31113; W-00-13-31113; various reviews; expected issue 
date:  FY 2013; work in progress) 
State Compliance With the Money Follows the Person Demonstration Program  
We will review selected States compliance with the Money Follows the Person (MFP) rebalancing 
demonstration program.  We will determine whether States followed applicable requirements for 
participating in the MFP program, such as providing qualified services to eligible participants.   
(OAS; W-00-12-31461; various reviews; expected issue date:  FY 2013; work in progress) 
State Terminations of Providers Terminated by Medicare or by Other States  
We will review States compliance with a new requirement that State Medicaid agencies terminate 
providers that have been terminated under Medicare or by another State.  We will determine whether 
such providers are terminated by all States, assess the status of the supporting information-sharing 
system, determine how CMS is ensuring that States share complete and accurate information, and 
identify obstacles States face in complying with the termination requirement.  (OEI; 06-12-00030; 
expected issue date:  FY 2014; work in progress; Affordable Care Act)   
State Payments to Federally Excluded Providers and Suppliers 
We will review Medicaid payments by States to providers and suppliers to determine the extent 
to which payments were made for services rendered during periods of exclusion from Medicaid.  
(OAS; W-00-11-31337; W-00-12-31337; various reviews; expected issue date:  FY 2013; work in 
progress) 
  Page 49  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
State Compliance With Federal Certified Public Expenditures Regulations  
We will determine whether States are complying with Federal regulations for claiming certified 
public expenditures, which are normally generated by local governments as part of their contribution 
to the coverage of Medicaid services.  (OAS; W-00-12-31110; various reviews; expected issue date:  
FY 2013; work in progress)   
State Procedures for Identifying and Collecting Third-Party Liability Payments    
We will review States procedures for identifying and collecting third-party payments for services 
provided to Medicaid beneficiaries to determine the extent to which States efforts have improved 
since our last review.  (OEI; 05-11-00130; expected issue date:  FY 2013; work in progress) 
Childrens Health Insurance Program 
for Medicaid-Eligible Individuals 
State Claims for Federal Reimbursement Under the Childrens Health Insurance Program for 
Medicaid-Eligible Individuals 
We will assess the appropriateness of a States claims for FFP under the States Childrens Health 
Insurance Program (CHIP) program for individuals who were enrolled in the States Medicaid 
program.  (OAS; W-00-11-31314; W-00-12-31314; various reviews; expected issue date:  FY 2013; 
work in progress) 
State Compliance With Eligibility and Enrollment Notification and Review Requirements for the 
Childrens Health Insurance Program    
We will review State compliance with the CHIP eligibility and enrollment notification and review 
requirements.  We will also determine whether beneficiaries remain enrolled during reviews of 
suspension or after termination of enrollment.  (OEI; 00-00-00000; expected issue date:  FY 2014; 
new start) 
Medicaid Data Systems, Controls, and Claims Processing 
Early Review of the Transformed Medicaid Statistical Information System Pilot Project  
We will review CMSs implementation of the Transformed Medicaid Statistical Information System 
(T-MSIS) pilot project.  We will also determine whether the pilot project is achieving results that will 
make the new T-MSIS database useful for detecting fraud, waste, and abuse. (OEI; 05-12-00610; 
expected issue date:  FY 2013; work in progress) 
Claims With Inactive or Invalid Provider Identifier Numbers  
Given the vulnerabilities identified in Medicare, we will review Medicaid claims to determine the 
extent to which State agencies have controls in place to identify claims associated with inactive or 
invalid National Provider Identifiers, including claims for services alleged to have been provided after 
the dates of the referring physicians deaths.  (OAS; W-00-11-31338; various reviews; expected issue 
date:  FY 2013; work in progress)  
Beneficiaries With Multiple Medicaid Identification Numbers  
We will review duplicate payments made by States on behalf of Medicaid beneficiaries with multiple 
Medicaid identification numbers and States procedures for preventing such payments.    
(OAS; W-00-11-31374; W-00-12-31374; various reviews; expected issue date:  FY 2013; work in 
progress) 
  Page 50  HHS Office of Inspector General   
Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
Use of the Public Assistance Reporting Information System To Reduce Instances of Payments by More 
Than One State  
We will review eligibility data from the Public Assistance Reporting Information System (PARIS) 
to determine the extent to which States use PARIS to identify Medicaid recipients who are 
simultaneously receiving Medicaid benefits in more than one State.  We will also determine the extent 
to which States investigate such instances and recover Medicaid payments for recipients determined 
to be ineligible.  (OEI; 09-11-00780; expected issue date:  FY 2013; work in progress) 
Management Information Systems Business Associate Agreements  
We will review CMSs oversight activities related to data security requirements of State Medicaid 
Management Information Systems, which process and pay claims for Medicaid benefits.  We will 
determine whether business associate agreements have been properly executed to protect 
beneficiary information, including safeguards implemented pursuant to Federal standards.  
(OAS; W-00-13-41015; various reviews; expected issue date:  FY 2013; new start) 
Security Controls Over State Web-Based Applications 
We will review States security controls over Web-based applications that allow Medicaid providers 
to electronically submit claims to determine whether they contain any vulnerabilities that could 
affect the confidentiality, integrity, and availability of the Medicaid claims protected health 
information.  (OAS; W-00-13-41016; various reviews; expected issue date:  FY 2013; new start) 
Security Controls at the Mainframe Data Centers That Process States Claims Data 
We will review security controls at States mainframe data centers that process Medicaid claims data.  
We will focus on security controls, such as access controls over the mainframe operating system and 
security software.  We will also review some limited general controls, such as disaster recovery plans 
and physical security.  (OAS; W-00-12-40019; W-00-13-40019; various reviews; expected issue date:  
FY 2013; work in progress and new start) 
Medicaid Managed Care 
Beneficiary Access to Medicaid Managed Care  
We will review how extensive managed care provider networks are for Medicaid managed care 
beneficiaries.  We will also describe State standards for primary and specialty care and will 
determine beneficiaries access to certain primary and specialty care providers.  (OEI; 02-11-00320; 
expected issue date:  FY 2014; work in progress) 
Beneficiary Grievances and Appeals Process  
We will review the extent to which States monitor Medicaid managed care entities (MCE) grievances 
and appeals systems for compliance with Federal requirements.  (OEI; 00-00-00000; expected issue 
date:  FY 2014; new start) 
State Oversight of Provider Credentialing by Managed Care Entities  
We will determine how States ensure that Medicaid MCEs' (specifically, managed care organizations 
(MCOs)) prepaid inpatient health plans and prepaid ambulatory health plans comply with 
credentialing and recredentialing requirements.  We will also determine how CMS ensures that States 
comply with provider-credentialing requirements.  (OEI; 09-10-00270; expected issue date:  FY 2013; 
work in progress) 
Managed Care Entities Marketing Practices  
We will review State Medicaid agencies oversight policies, procedures, and activities to determine 
the extent to which States monitor Medicaid MCEs marketing practices and compliance with Federal 
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and State contractual marketing requirements.  We will also determine the extent to which CMS 
ensures States compliance with Federal requirements involving Medicaid MCE marketing practices.   
(OEI; 00-00-00000; expected issue date:  FY 2014; new start) 
Completeness and Accuracy of Managed Care Encounter Data  
We will determine the extent to which Medicaid managed care encounter data included in Medicaid 
Statistical Management Systems (MSISs) submissions to CMS accurately represent all services 
provided to beneficiaries.  We will also determine the extent to which CMS acted to enforce Federal 
requirements that Medicaid managed care encounter data be included in MSIS.  (OEI; 00-00-00000; 
expected issue date:  FY 2014; new start; Affordable Care Act) 
Program IntegrityMedicaid Managed Care Organizations Identification of Fraud and Abuse  
We will determine whether MCOs identified and addressed potential fraud and abuse incidents in 
2011.  We will also describe how States oversee MCOs efforts to identify and address fraud and 
abuse.  (OEI; 00-00-00000; expected issue date:  FY 2014; new start) 
Program IntegrityManaged Care Organizations Use of Prepayment Review To Detect and Deter 
Fraud and Abuse  
We will determine the extent to which Medicaid MCOs use prepayment reviews to detect and 
deter fraud and abuse.  We will also examine the results of MCO prepayment reviews, the challenges 
addressed in developing and implementing the prepayment programs, and lessons MCOs learned 
about them.  Federal regulations require Medicaid MCOs to have administrative and management 
arrangements or procedures that are designed to guard against fraud and abuse and that include 
mandatory compliance plans and provisions for internal monitoring and auditing.  (OEI; 
00-00-00000; expected issue date:  FY 2014; new start) 
Medical Loss RatioMedicaid Managed Care Plans Refunds to States 
We will review managed care plans with contract provisions that require that a minimum percentage 
of total costs be expended for medical expenditures (medical loss ratio) to determine whether a 
refund was made to the State agency when the minimum medical loss ratio threshold was not 
met. (OAS; W-00-11-31372; W-00-12-31372; various reviews; expected issue date:  FY 2013; work in 
progress) 
Other Medicaid-Related Reviews 
Medicaid OverpaymentsCredit Balances in Medicaid Patient Accounts  
We will review patient accounts of providers to determine whether there are Medicaid overpayments 
in accounts with credit balances.  (OAS; W-00-11-31311; W-00-12-31311; various reviews; expected 
issue date:  FY 2013; work in progress) 
Payment Error Rate Measurement ProgramError Rate Accuracy and Health Information Security  
We will review CMSs implementation of the Payment Error Rate Measurement (PERM) process to 
determine whether it has produced valid and reliable error rate estimates for Medicaid and CHIP fee 
for service, managed care, and eligibility.  We will also review the physical and data security of health 
information transmitted by various States for use in the PERM.  We will also verify CMSs actions to 
implement recommendations from a March 2010 OIG review.  (OAS; W-00-13-40046; various 
reviews; expected issue date:  FY 2013; new start) 
Nursing Home Minimum Data SetAccuracy and CMS Oversight 
We will review CMSs oversight of Minimum Data Set (MDS) data submitted by nursing homes 
certified to participate in Medicare or Medicaid.  We will also review CMSs processes for ensuring 
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Medicaid Integrity Program Report, FY 2012    Appendix CFY 2013 Medicaid Work Plan 
 
 
that nursing homes submit accurate and complete MDS data.  (OEI; 00-00-00000; expected issue 
date:  FY 2014; new start) 
Reviews of State Medicaid Fraud Control Units  
We will review the overall management, operations, and performance of selected Medicaid Fraud 
Control Units (MFCU).  We will also determine the extent to which a State MFCU operates in 
accordance with the 12 published performance standards and identify effective practices and areas 
for improvement in the MFCUs management and operations.  (OEI; 00-00-00000; various reviews; 
expected issue date: FY 2013; work in progress) 
 
 
 
 
 
 
 
  http://oig.hhs.gov 
 
 
 
 
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