Department of Health and Human Services 

OFFICE OF 

 
INSPECTOR GENERAL 

 
 
 
 
 
 
 
 
M S M
ISSOURI  TATE  EDICAID 

 
 
F C U :
   
RAUD  ONTROL  NIT   
 
2011 O R
  NSITE  EVIEW
 
 
 
Stuart Wright 
 
Deputy Inspector General for 

Evaluation and Inspections 

 
July 2012 

OEI-07-11-00750
   
   
EXECUTIVE SUMMARY: 

REVIEW OF MISSOURI STATE MEDICAID FRAUD CONTROL UNIT:  

2011 Onsite Review 
 
OEI-07-11-00750 

 
 
WHY WE DID THIS STUDY 

 
The Office of Inspector General (OIG) oversees all Medicaid Fraud Control Units 
(MFCU or Unit) with respect to Federal grant compliance.  As part of this oversight, OIG 
reviews all Units. These reviews assess Unit performance in accordance with the 
12 MFCU performance standards and monitor Unit compliance with Federal grant 
requirements.  This is a review of the Missouri Unit.   
 
HOW WE DID THIS STUDY  
 
We based our review on an analysis of data from seven sources:  (1) a review of policies, 
procedures, and documentation of the Units operations, staffing, and caseload; 
(2) a review of financial documentation; (3) structured interviews with key stakeholders; 
(4) a survey of Unit staff; (5) structured interviews with the Units management; (6) an  
onsite review of case files; and (7) an onsite review of Unit operations.   
 
WHAT WE FOUND 
 
For Federal fiscal years (FY) 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 closing older cases during FYs 2008 through 2010.  It did not 
establish annual training plans for its professional disciplines.  One-third of case files 
lacked documentation of supervisory approval for key stages of the investigation, and 
nearly all lacked documentation of periodic supervisory reviews.  Finally, the Unit lacked 
safeguards to secure case files. At the same time, our review found no evidence of 
significant noncompliance with applicable laws, regulations, or policy transmittals.  
 
WHAT WE RECOMMEND 
 
Based on these findings, the Missouri Unit should:  (1) establish annual training plans for 
professional disciplines, (2) ensure that case files contain documented supervisory 
approval and periodic supervisory reviews, and (3) ensure that case files are not 
vulnerable to unauthorized access.  The Missouri Unit concurred with all of our 
recommendations.   
     
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 

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

Methodology................................................................................................4 

Findings........................................................................................................7 

For FYs 2008 through 2010, the Missouri Unit reported  

recoveries of $135 million, with 13 convictions and 36 civil 

settlements........................................................................................7 

The Unit exercised proper fiscal controls over its resources ...........7 

The Unit expanded its definition of referrals and changed its 

process for closing older cases during FYs 2008 through 2010 ......7 

The Unit did not establish annual training plans for the 

professional disciplines....................................................................9 

One-third of case files lacked documentation of supervisory 

approval for key stages of the investigation and nearly all  

lacked documentation of periodic supervisory reviews. ................10 

Unit practices leave case files vulnerable to unauthorized access . 11
  
Conclusion and Recommendations ............................................................12 

Agency Comments and Office of Inspector General Response .................13 

Appendixes ................................................................................................14 

A: Performance Standards ............................................................14 

B: Point Estimates and Confidence Intervals Based on  

Case File Reviews..........................................................................18 

C: Investigations Opened and Closed by Provider Category,
      
FYs 2008 through 2010 .................................................................19 

D: Agency Comments ...................................................................21 

Acknowledgments......................................................................................25 

 
 
     
   
OBJECTIVE 
To conduct an onsite review of the Missouri Medicaid Fraud Control Unit 
(MFCU or Unit). 
BACKGROUND 
The mission of State MFCUs, as established by Federal statute, is to 
investigate and prosecute Medicaid provider fraud and patient abuse and 
neglect under State law.1  Under the Medicaid statute, each State must 
maintain a certified Unit unless the Secretary of Health & Human Services 
(HHS) determines that operation of a Unit would not be cost-effective 
because (1) minimal Medicaid fraud exists in that State; and (2) the State 
has other, adequate safeguards to protect Medicaid beneficiaries from  
abuse and neglect.2  Currently, 49 States and the District of Columbia 
(States) have created such Units.3  In Federal fiscal year4 (FY) 2010, the 
combined Federal and State grant expenditures for the Units totaled 
$205.5 million, of which Federal funds represented $153.8 million.   
Each Unit must employ an interdisciplinary staff that consists of at least an  
investigator, an auditor, and an attorney to carry out its duties and 
responsibilities in an effective and efficient manner.5  The staff reviews 
complaints provided by the State Medicaid agency and other sources and 
determines their potential for criminal prosecution.  Collectively, in 
FY 2010, the 50 Units obtained 1,329 convictions and 1,090 civil 
settlements or judgments.6  That year, the Units reported recoveries of 
more than $1.9 billion.7, 8  
 
1   
Social Security Act (SSA),  1903(q)(3).
 
2 
 SSA  1902(a)(61) and 1903(q)(3).  Regulations at 42 CFR  1007.11(b)(1) add that the 

Units responsibilities may include reviewing complaints of misappropriation of patients 

private funds in residential health care facilities. 

3 
North Dakota and the territories of American Samoa, Guam, the Northern Mariana Islands, 

Puerto Rico, and the U.S. Virgin Islands have not established Units. 
4  
All FY references in this report are based on the Federal FY (October 1 through September 

30).
 
5 
SSA  1903(q)(6) and 42 CFR  1007.13. 

6 
Office of Inspector General (OIG), State Medicaid Fraud Control Units Fiscal Year 2010 

Grant Expenditures and Statistics. Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/ on April 17, 2012. 

7 

Ibid.  
8  Pursuant to 42 CFR  1007.17, Units report the total amount of recovered funds in their 
annual reports to OIG.  The annual total does not include court-ordered payments not yet 
received. However, the annual total may include payments ordered in a prior year, because it 
may take a year or more for a Unit to receive ordered payments. 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     1 
   
   
Units are required to have either statewide authority to prosecute cases or 
formal procedures to refer suspected criminal violations to an office with 
such authority.9  In Missouri and 42 other States, the Units are located 
within offices of State Attorneys General; in the remaining 7 States, the 
Units are located in other State agencies.10  Generally, Units outside of the 
Attorneys General offices must refer cases to other offices with 
prosecutorial authority. 
Each Unit must be a single, identifiable entity of State government, 
distinct from the single State Medicaid agency, and each Unit must 
develop a formal agreement (e.g., a memorandum of understanding) that 
describes the Units relationship with that agency.11   
Oversight of the MFCU Program 
The Secretary of HHS delegated to OIG the authority to both annually 
certify the Units and to administer grant awards to reimburse States for a 
percentage of their costs of operating certified Units.12   All Units are 
currently funded by the Federal Government on a 75-percent matching basis, 
with the States contributing the remaining 25 percent.13   To receive Federal 
reimbursement, each Unit must submit an application to OIG.14   
OIG reviews the application and notifies the Unit if it is approved and the 
Unit is certified.  Approval and certification are for a 1-year period; the Unit 
must be recertified each year thereafter.15    
Under the Medicaid statute, States must operate Units that effectively carry 
out their statutory functions and meet program requirements.16  OIG 
developed and issued 12 performance standards to define the criteria it 
applies in assessing whether a Unit is effectively carrying out statutory 
functions and meeting program requirements.17  Examples of criteria include 
maintaining an adequate caseload through referrals from several sources, 
 
9 
SSA  1903(q)(1). 

10 
In most States, the Unit shares responsibility for protecting the integrity of the Medicaid 

program with the section of the State Medicaid agency that functions as the Program Integrity
  
Unit. Some States also establish an Office of Medicaid Inspector General that conducts and 

coordinates fraud, waste, and abuse activities for the State agency. 

11 
SSA  1903(q)(2); 42 CFR  1007.5 and 1007.9(d).
   
12 
The portion of funds reimbursed to States by the Federal Government for its share of 

expenditures for the Federal Medicaid program, including the MFCUs, is called Federal 

Financial Participation.
 
13 
SSA  1903(a)(6)(B). 

14  
42 CFR  1007.15(a).
  
15 
42 CFR  1007.15(b) and (c). 
 
16 
SSA  1902(a)(61). 

17 
59 Fed. Reg. 49080 (Sept. 26, 1994).  Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-
control-units-mfcu/files/Performance%20Standards.pdf on November 22, 2011.  OIG revised 

these standards on June 1, 2012 (see 77 Fed. Reg. 77106).  The standards referred to 

throughout this report are those from 1994, which were in effect at the time of our review. 

Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     2 
   
   
maintaining an annual training plan for all professional disciplines, and 
establishing policy and procedure manuals to reflect the Units operations.  
See Appendix A for a complete list of the performance standards.  
Missouri State MFCU  
The Missouri Unit is located within the Public Safety Division of the State 
Attorney Generals Office. It has authority to prosecute Medicaid fraud 
and cases of patient abuse and neglect.  At the time of our review,18 the 
Units 21 employees were located in the State capital of Jefferson City.  
The Missouri Unit was authorized $1.7 million in Federal funds and 
expended a total of $1.6 million in combined Federal and State funds for 
FY 2010.19  Total Medicaid expenditures in Missouri increased from  
$7 billion in FY 2008 to $8.3 billion in FY 2010.20    
Historically, the Unit received referrals of fraud, abuse, or neglect from  
the State Medicaid Agency, which included the Program Integrity Unit.  
Beginning in January 2011, the program integrity function was moved out 
of the State Medicaid Agency and into the Department of Social Services, 
Office of the Director, and renamed the Missouri Medicaid Audit and 
Compliance (MMAC) Unit.  The MMAC Unit is now a source of 
referrals.21  Other sources include calls to the Unit hotline; other State and 
Federal law enforcement agencies; the State Ombudsman; and the 
Missouri Department of Health and Senior Services (DHSS), which 
provides patient abuse referrals. For FYs 2008 through 2010, the Unit 
received an average of 298 referrals each year.  
Upon determining that a referral merits a full investigation, the Unit opens 
a case and assigns an attorney(s) and investigator(s).  The Unit may close 
a case through civil action, criminal prosecution, a determination of 
insufficient evidence, referral, or other administrative action.  With respect 
to convalescent, nursing, and boarding homes, State law requires that the 
attorney general shall review each complaint and may initiate legal  
action....22  
Previous Review  
In 2005, OIG conducted an onsite review of the Missouri Unit and found 
that: (1) the Unit lacked a standardized case filing system to identify 
 
18 
Our onsite review occurred in December 2011.  
19  
OIG analysis of State Form SF-269 for FY 2010.  
20 
Keeping America Healthy. Accessed at http://www.medicaid.gov/ on March 1, 2012.  
Medicaid Fraud Control Units FY 2010 Statistical Chart.  Accessed at http://oig.hhs.gov/ on 

March 1, 2012. 

21 
The MMAC Unit is responsible for administering and managing Medicaid audit and 

compliance initiatives as well as for detecting, investigating, and preventing fraud, waste, and 

abuse of the Medicaid program.
 
22 
 Revised Statutes of Missouri  198.093.2. 
 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     3 
   
   
documents within the case file, (2) staff reported some equipment was 
outdated and additional equipment would be useful, and (3) the Unit 
charged the MFCU Federal grant for certain non-Medicaid-related 
activities.23  The Unit responded that it planned to incorporate system  
features from a neighboring Units case filing system into its system, that 
equipment would be purchased and upgraded as needed, and that the Unit 
would seek approval for de minimus non-Medicaid-related activities.  
The current review found no indication that any of these prior issues 
persist.  
METHODOLOGY 
Our review covered the 3-year period of FYs 2008 through 2010.  We  
based our review on an analysis of data from seven sources:  (1) a review 
of policies, procedures, and documentation of the Units operations, 
staffing, and caseload for FYs 2008 through 2010; (2) a review of 
financial documentation for FYs 2008 through 2010; (3) structured 
interviews with key stakeholders; (4) a survey of Unit staff; (5) structured 
interviews with the Units management; (6) an onsite review of case files 
that were open in FYs 2008 through 2010; and (7) an onsite review of Unit 
operations.  Although interview and survey respondents may have 
provided information that fell outside of our 3-year review period, we used 
this information to explain further the results of our analyses covering 
FYs 2008 through 2010. 
We analyzed data from all seven sources to describe the caseload and 
assess the performance of the Unit.  We also analyzed the data to identify 
any opportunities for improvement and any instances in which the Unit 
did not fully meet the performance standards or was not operating in 
accordance with laws, regulations, and policy transmittals.24    
Data Collection and Analysis 
Review of Unit Documentation.  We requested and reviewed policies, 
procedures, documentation of the Units operations, staffing, and cases, 
including its annual reports, quarterly statistical reports, and responses to 
recertification questionnaires.  We also requested and reviewed the Units 
data describing how it detects, investigates, and prosecutes Medicaid 
cases. Data collected included information such as the number of referrals 
received by the Unit and the number of investigations opened and closed.   
 
23 
 A programmer analyst assisted in the development of a computerized case-tracking system  
and monthly time log database for use by all staff in the Office of Attorney General.  An 
auditor spent 4 days completing an assignment involving gasoline price gouging. 
24 
 All relevant regulations, statutes, and policy transmittals are available online at 
http://oig.hhs.gov.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     4 
   
   
Review of Financial Documentation. We reviewed Unit policies and 
procedures related to budgeting, accounting systems, cash management, 
procurement, property, and personnel to evaluate internal controls and 
design our tests for financial documentation.  We obtained from the Unit 
its claimed grant expenditures for FYs 2008 through 2010 to:  (1) review 
final Federal Status Reports and the supporting documentation, 
(2) purposively select and review transactions within direct cost categories 
to determine whether costs were allowable, and (3) verify that indirect 
costs were accurately computed using the approved indirect cost rate.  
Finally, we reviewed records in the Payment Management System and 
revenue accounts to identify any unreported program income.   
Interviews With Key Stakeholders.  We conducted structured interviews 
with key stakeholders who were familiar with the operations of the Unit.  
Specifically, we interviewed the director of the MMAC Unit, the director  
of DHSSs Division of Regulation & Licensure, and the director of 
DHSSs Senior & Disability Services.  Additionally, we interviewed the 
Special Agent in Charge and Assistant Special Agents in Charge for 
OIGs Kansas City region. These interviews focused on the Units 
interaction with external agencies.  
Survey of Unit Staff.  We administered an electronic survey of all 
nonmanagerial Unit staff.  We requested and received responses from each 
of the 16 nonmanagerial staff members, for a 100-percent response rate.  
Our questions focused on operations of the Unit, opportunities for 
improvement, and noteworthy practices of the Unit.  The survey also 
sought information about the Units compliance with applicable laws and 
regulations. 
Interviews With Unit Management and Staff. We conducted structured 
interviews with the Units director, deputy director (chief attorney), chief 
investigator, and chief auditor. We met with the computer programmer 
who demonstrated how the Unit retrieves and analyzes Medicaid claims  
data. We asked these managers and staff members to provide us with 
additional information to better illustrate the Units operations, identify  
opportunities for improvement and noteworthy practices, and clarify 
information obtained from other data sources.  
Onsite Review of Case Files.  We selected a statistically valid, simple 
random sample of 98 case files from the 508 cases that were open at some  
point during FYs 2008 through 2010, which were the most recent 
complete FYs at the beginning of our review.  We reviewed these 98 case 
files for documentation of supervisory approval for the opening and 
closing of cases, documented periodic supervisory reviews, timeliness of 
case development, and the Units processes for monitoring the status and 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     5 
   
   
outcomes of cases.  See Appendix B for sample sizes and 95-percent 
confidence intervals associated with point estimates.    
Onsite Review of Unit Operations. While onsite, we reviewed the Units 
operations. Specifically, we observed intake of referrals, data analysis 
operations, security of data and case files, and the general functioning of 
the Unit. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     6 
   
   
FINDINGS 
For FYs 2008 through 2010, the Missouri Unit reported 
recoveries of $135 million, with 13 convictions and 
36 civil settlements 
Unit recoveries included $134 million in civil cases (i.e., actions involving  
monetary settlements and court orders) and $695,437 in criminal cases.   
The Unit placed a heavy emphasis on negotiating cases under the Missouri 
civil false claims act.  As part of these civil actions, the Unit pursued 
agreements with providers to immediately surrender their legal rights to 
participate in the Medicaid program  without being subject to mandatory 
exclusion by OIG.25  Of the 508 cases open at some point during  
FYs 2008 through 2010, 91 percent (463 cases) were charged as civil 
cases and 9 percent (45 cases) as criminal cases.  Charging decisions were 
made after an investigation was at or very near completion.  The Unit also 
reported filing felony charges against 20 defendants and separately 
obtaining 13 convictions and 36 civil settlements during our 3-year review 
period. There were no acquittals and only one dismissal.  See Appendix C 
for details on investigations opened and closed by provider category for 
FYs 2009 through 2011. 
The Unit exercised proper fiscal controls over its 
resources 
According to Performance Standard 11, the Unit should exercise proper 
fiscal control over its resources.  For FYs 2008 through 2010, the Unit 
claimed expenditures that represented allowable, allocable, and reasonable 
costs in accordance with applicable Federal regulations.  In addition, the 
Unit maintained adequate internal controls relating to accounting, 
budgeting, personnel, procurement, property, and equipment.   
The Unit expanded its definition of referrals and
changed its process for closing older cases during 
FYs 2008 through 2010 
According to Performance Standard 4, the Unit should maintain an 
adequate workload through referrals from the single State agency and 
other sources. The Unit should also have a continuous case flow.  As 
noted in the background of this report, the Unit receives referrals from the 
 
25
 Exclusions would prevent providers from committing future fraud in their current State and 
other States by restricting their participation in the Medicaid and other Federal health care 
programs.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     7 
   
   
State Medicaid Agency, the Unit hotline, and a variety of other sources 
such as other law enforcement agencies and other State agencies.  For 
FYs 2008 through 2010, the number of referrals increased by 240 percent 
(from 123 to 418, see Table 1).  To explain this dramatic increase, the Unit 
manager explained that beginning in October 2008, Unit management 
began counting and tracking all Medicaid Program agencies referrals, 
MFCU hotline calls, and all case leads as referrals, based on a 
recommendation from the State Auditor.  Previously, the Unit would 
consider a complaint as a referral only if a case was opened.  Additionally, 
Unit management stated that prior to January 2011, allegations received 
from private attorneys alleging abuse were opened directly into cases, 
skipping the referral stage. Leads which were deemed as unsubstantiated 
and warranted no further investigation were not counted as referrals.  
Finally, managers attributed part of the increase in fraud referrals to 
enhanced outreach efforts and improved communication with key 
stakeholders (i.e., the State Medicaid Agency and the MMAC Unit).   
Table 1: Unit Referrals for FYs 2008 Through 2010, by Type  
Type    FY 2008   FY 2009   FY 2010  
Fraud  58  131  182 
Patient Abuse and Neglect 
65  221  236 
(Includes Patient Funds Cases)  
     Total   123  352  418 
 
Source:  OIG analysis of Missouri MFCU Quarterly Statistical Report data, 2012. 
When a referral is received, a preliminary investigation is conducted to 
determine if opening a case is merited.  Multiple referrals may result in 
one opened case, a referral may lead  to multiple open cases, or the Unit 
may decide not to open cases based on the quality of the referrals.  The 
Unit may also forward a referral to another agency.     
For FYs 2008 through 2010, the number of cases opened by the Unit 
decreased by 16 percent. In FY 2008, the Unit opened 125 cases, 
compared to 105 in FY 2010.26  (See Table 2.) Unit management 
attributed the decrease to the Units streamlining of its case opening, 
referral intake, and investigative processes.  Unit management attributed 
further reductions to conducting more investigative work at the referral 
stage to avoid opening nonmeritorious cases.   
 
26 
 Outside of our review period, the Unit reported opening 176 cases in FY 2011.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     8 
   
   
Table 2: Cases Opened for FYs 2008 Through 2010, by  
Type* 
Type of Investigation   FY 2008   FY 2009   FY 2010  
Fraud  59  42  69 
Patient Abuse and Neglect 
66  51  36 
(Includes Patient Funds Cases)  
     Total   125  93  105 
*Includes only new cases opened during the FY. 
Source:  OIG analysis of Missouri MFCU data, 2012.  
 
The Unit may close a case through civil action, criminal prosecution, a 
determination of insufficient evidence, referral, or other administrative 
action. For FYs 2008 through 2010, the number of cases closed by the 
Unit decreased by 48 percent. In FY 2008, the Unit closed 185 cases, 
compared to 97 in FY 2010.  (See Table 3.) 
Managers explained the decline in case closings as follows.  In early 2008, 
Unit management determined that Unit productivity would be enhanced 
by reducing the number of older, open cases and focusing unit resources 
on newer cases and investigations. This process resulted in administrative 
closures of more than 100 older files in approximately 2 months.  These 
cases had an average age of over 3 years.  Their closure caused the 
average age of cases closed by the MFCU to fall to just over 1 year.  See 
Appendix C for information about the Units cases by provider category.    
Table 3: Cases Closed for FYs 2008 Through 2010, by Type  
Type of Investigation   FY 2008   FY 2009   FY 2010  
Fraud  113  48  58 
Patient Abuse and Neglect 
72  59  39 
(Includes Patient Funds Cases)  
     Total   185  107  97 
. 
Source:  OIG analysis of Missouri MFCU data, 2012
 
The Unit did not establish annual training plans for the 
professional disciplines 
According to Performance Standard 12, the Unit should establish annual 
training plans for each professional discipline.  The training provided 
should aid in the mission of the Unit.  At the time of our onsite review, 
managers reported that they had not established annual training plans for 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     9 
   
   
any of the three professional disciplines (i.e., auditor,  investigator, and 
attorney).27  Rather, staff are sent to training as opportunities arise. 
All new hires in the Missouri Unit are  required to attend in-house training 
conducted by the chief investigator and the Unit attorneys, and separate 
training conducted by the National Association of Medicaid Fraud Control 
Units (NAMFCU) on Health Care Fraud/Patient Abuse and Neglect.  All 
MFCU attorneys are required to complete 15 hours of Continuing Legal 
Education per year.  Investigators receive ongoing in-house training and 
are sent to the Medicaid Fraud 101 and 102 courses, sponsored by 
NAMFCU, as openings allow.  Sixty-two percent of staff stated that they 
have adequate training to perform their jobs.   
Several managers reported that few training opportunities have been 
available for staff in recent years. The managers acknowledged the 
challenge of identifying and accessing training opportunities to fit the 
unique needs of their staff.  Managers also requested reinstatement of the 
multidisciplinary biennial conferences formerly provided by OIG.   
After the onsite review, the Unit began work on an annual training plan for 
new and established employees in the investigative, audit, and legal 
disciplines.  The Unit shared a preliminary draft of the training plan during 
the writing of this report.  
One-third of case files lacked documentation of 
supervisory approval for key stages of the 
investigation and nearly all lacked documentation of 
periodic supervisory reviews  
According to Performance Standard 6, the Unit should complete cases 
within a reasonable timeframe.  As a part of this effort, managers should 
approve the opening and closing of cases and document any supervisory 
case reviews in the case file.  Thirty-three percent of all case files were 
missing documented supervisory approval for the opening of 
investigations and 1 percent of the closed case files did not include 
documented supervisory approval detailing the case closure.  Unit 
management explained that prior to October 2008, referrals from State 
agencies were considered preliminarily verified and therefore skipped the 
referral stage, and were directly opened into complaints.  Thus no separate 
documentation indicated supervisory openings of such matters as none 
 
27 
Although we reviewed training records, we did not evaluate the staffs professional 
qualifications.  Rather, we applied the performance standards to evaluate whether the Unit 
maintained a formal training plan for each professional discipline and assessed training 
opportunities specific to Unit operations.  We recognize that attorneys, investigators, and 
auditors receive professional and law enforcement training, and that the lack of an annual 
training plan does not suggest that professional staff are unqualified.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     10 
   
   
was neededsuch openings were a matter of policy, not individual 
supervisory authorization. Unit management further informed us that 
prior to January 2011, all allegations of resident abuse were handled 
similarly without documentation reflecting supervisory approval for 
opening cases.28     
Performance Standard 6 also states that supervisory reviews should be 
conducted periodically and noted in the case file.  Overall, only 3 percent 
of the case files contained any documentation of periodic supervisory 
reviews.29 The Unit director explained that attorney reviews of 
investigations typically consist of conversations between attorneys and 
investigators that occur approximately every 2 weeks.  These 
conversations were not documented and were thus not inserted in the case 
files. The Unit director typically meets with the attorneys once per month 
and documents the meeting in a case log report, but this is not typically 
inserted into the case files.   
Finally, 11 percent of case files were not opened within 60 days of receipt  
and another 7 percent of case files had no record of the amount of time 
from receipt to opening.  Delays were outside of the Units control in only 
a limited number of instances.  
Unit practices leave case files vulnerable to 
unauthorized access 
According to Performance Standard 1, a Unit will be in conformance with 
all applicable statutes, regulations, and policy transmittals, including 
regulations regarding the security of case files (i.e., 42 CFR  
 1007.11(f)). During our onsite review, we observed unit practices that 
left case files vulnerable to unauthorized access.   
After the onsite review, the Unit implemented a plan to prevent 
unauthorized access to case files. 
   
 
28 
All but one of the cases  missing supervisory approval for opening fit within the internal 
practices the Unit established. 
29  For the purposes of this report, supervisory approval to open and close a case does not 
constitute a case file review.  Periodic supervisory  review indicates that a supervisor reviewed  
a case more than once between its opening and closing.  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     11 
   
   
CONCLUSION AND RECOMMENDATIONS 
For FYs 2008 through 2010, the Unit obtained 13 criminal convictions and 
36 civil settlements, and reported recoveries of $134 million in civil cases 
and $695,437 in criminal cases.  Providers who settle civilly are not 
subject to mandatory exclusion by OIG.  Exclusions would prevent 
providers from committing future fraud by restricting their participation in 
the Medicaid program. 
Although the Unit maintained proper fiscal controls over its resources, our 
review found opportunities for improvement and instances in which the 
Unit did not fully meet the performance standards.  Specifically, the Unit 
did not establish annual training plans, and its case files lacked 
documentation of supervisory approval for key stages of the investigation 
and periodic supervisory reviews.  Additionally, the Unit lacked 
safeguards to secure case files. At the same time, our review found no 
evidence of significant noncompliance with applicable laws, regulations, 
or policy transmittals.   
Based on these findings, we recommend that the Missouri Unit: 
Establish Annual Training Plans for Professional Disciplines  
The Unit should develop formal training plans that indicate the type and  
duration of training expected each year for employees in each professional 
discipline.  The Unit may work with NAMFCU or OIG to identify 
additional relevant training opportunities for staff. 
After our onsite review, the Unit began work on an annual training plan 
for new and established employees in the investigative, audit, and legal 
disciplines.  The Unit shared a preliminary draft of the training plan while 
this report was being written. 
Ensure That Case Files Contain Documented Supervisory  
Approval and Documented Periodic Supervisory Reviews   
The Unit should make use of its newly developed formal investigative 
checklist tool to ensure that case openings are approved by supervisors.  
Unit managers should place documentation of all supervisory reviews in 
the case files.  This will assist in evaluating the timeliness of investigation,  
prosecution, and closure of cases. 
Ensure That Case Files Are Not Vulnerable to Unauthorized 
Access 
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     12 
   
   
UNIT COMMENTS 
With regard to our first recommendation, the Unit is implementing a 
MFCU Training Policy, including annual plans.  Annual training plans will 
be formulated for individual employees and for disciplines. 
With regard to our second recommendation, the Units case management  
system will require automated documentation of supervisory reviews of  
each case for insertion into each case file.  All case openings will be 
approved in writing. 
With regard to our third recommendation, the Unit has addressed potential 
access issues by ensuring all case files will be maintained in locked file 
cabinets; lockable desk drawers; and a secure, locked key-coded evidence 
room.   
The full text of the Units comments is provided in Appendix D.  We did 
not make any changes to the report based on the Units comments. 
 
 
 
 
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     13 
   
   
APPENDIX A 
Performance Standards  
1. 	A Unit will be in conformance with all applicable statutes, 
regulations and policy transmittals.  In meeting this standard, the 
Unit must meet, but is not limited to, the following requirements:  
a. 	  The Unit professional staff must consist of permanent employees 
working full-time on Medicaid fraud and patient abuse matters. 
b. 	  The Unit must be separate and distinct from the single State 
Medicaid agency. 
c. 	  The Unit must have prosecutorial authority or an approved formal 
procedure for referring cases to a prosecutor. 
d. 	  The Unit must submit annual reports, with appropriate 

certifications, on a timely basis. 
 
e. 	  The Unit must submit quarterly reports on a timely basis. 
f. 	  The Unit must comply with the Americans with Disabilities Act, 
the Equal Employment opportunity requirements, the Drug Free 
workplace requirements, Federal lobbying restrictions, and other 
such rules that are made conditions of the grant. 
2. 	A Unit should maintain staff levels in accordance with staffing 
allocations approved in its budget. In meeting this standard, the 
following performance indicators will be considered: 
a. 	  Does the Unit employ the number of staff that was included in the 
Unit's budget as approved by the OIG? 
b. 	  Does the Unit employ the number of attorneys, auditors, and 
investigators that were approved in the Unit's budget? 
c. 	  Does the Unit employ a reasonable size of professional staff in 
relation to the State's total Medicaid program expenditures?   
d. 	  Are the Unit office locations established on a rational basis and are 
such locations appropriately staffed? 
3. 	A Unit should establish policies and procedures for its operations, 
and maintain appropriate systems for case management and case 
tracking.  In meeting this standard, the following performance 
indicators will be considered: 
a. 	  Does the Unit have policy and procedure manuals? 
b. 	  Is an adequate, computerized case management and tracking 
system in place? 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     14 
   
   
4. 	A Unit should take steps to ensure that it maintains an adequate 
workload through referrals from the single State agency and other 
sources.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit work with the single State Medicaid agency to 
ensure adequate fraud referrals? 
b. 	  Does the Unit work with other agencies to encourage fraud 

referrals? 

c. 	  Does the Unit generate any of its own fraud cases? 
d. 	  Does the Unit ensure that adequate referrals of patient abuse 
complaints are received from all sources? 
5. 	A Units case mix, when possibl e, should cover all significant 
provider types. In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit seek to have a mix of cases among all types of 
providers in the State? 
b. 	  Does the Unit seek to have a mix of Medicaid fraud and Medicaid 
patient abuse cases? 
c. 	  Does the Unit seek to have a mix of cases that reflect the 

proportion of Medicaid expenditures for particular provider 

groups? 

d. 	  Are there any special Unit initiatives targeting specific provider 
types that affect case mix? 
e. 	  Does the Unit consider civil and administrative remedies when  
appropriate? 
6. 	A Unit should have a continuous  case flow, and cases should be 
completed in a reasonable time. In meeting this standard, the 
following performance indicators will be considered:  
a. 	  Is each stage of an investigation and prosecution completed in an 
appropriate time frame?  
b. 	  Are supervisors approving the opening and closing of 

investigations?
   
c. 	  Are supervisory reviews conducted periodically and noted in the 
case file? 
7. A Unit should have a process for monitoring the outcome of cases.  
In meeting this standard, the following performance indicators will be 
considered:  
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     15 
   
   
a. 	  The number, age, and type of cases in inventory. 
b. 	  The number of referrals to other agencies for prosecution. 
c. 	  The number of arrests and indictments. 
d. 	  The number of convictions. 
e. 	  The amount of overpayments identified. 
f. 	  The amount of fines and restitution ordered. 
g. 	  The amount of civil recoveries. 
h. 	  The numbers of administrative sanctions imposed. 
8. 	 A Unit will cooperate with the OIG and other federal agencies, 
whenever appropriate and consistent with its mission, in the 
investigation and prosecution of health care fraud.  In meeting this 
standard, the following performance indicators will be considered: 
a. 	  Does the Unit communicate effectively with the OIG and other 
Federal agencies in investigating or prosecuting health care fraud 
in their State? 
b. 	  Does the Unit provide OIG regional management, and other 
Federal agencies, where appropriate, with timely information 
concerning significant actions in all cases being pursued by the 
Unit? 
c. 	  Does the Unit have an effective procedure for referring cases,  
when appropriate, to Federal agencies for investigation and other 
action?  
d. 	  Does the Unit transmit to the OIG, for purposes of program  
exclusions under section 1128 of the Social Security Act, reports 
of convictions, and copies of Judgment and Sentence or other 
acceptable documentation within 30 days or other reasonable time 
period? 
9. 	A Unit should make statutor y or programmatic recommendations, 
when necessary, to the State government. In meeting this standard, 
the following performance indicators will be considered:  
a. 	  Does the Unit recommend amendments to the enforcement 
provisions of the State's statutes when necessary and appropriate to 
do so? 
b. 	  Does the Unit provide program recommendations to single State 
agency when appropriate? 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     16 
   
   
c. 	  Does the Unit monitor actions taken by State legislature or State 
Medicaid agency in response to recommendations? 
10. 	A Unit should periodica lly review its memorandum of 
understanding (MOU) with the single State Medicaid agency and 
seek amendments, as necessary, to ensure it reflects current law  
and practice.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Is the MOU more than 5 years old? 
b.	   Does the MOU meet Federal legal requirements? 
c. 	  Does the MOU address cross-training with the fraud detection staff  
of the State Medicaid agency? 
d.	   Does the MOU address the Units responsibility to make program  
recommendations to the Medicaid agency and monitor actions  
taken by the Medicaid agency concerning those recommendations? 
11. 	The Unit director should exercise proper fiscal control over the 
Unit resources.  In meeting this standard, the following performance 
indicators will be considered:  
a. 	  Does the Unit director receive on a timely basis copies of all fiscal 
and administrative reports concerning Unit expenditures from the 
State parent agency? 
b.	   Does the Unit maintain an equipment inventory?  
c. 	  Does the Unit apply generally accepted accounting principles in its 
control of Unit funding? 
12. 	A Unit should maintain an annual training plan for all 
professional disciplines.  In meeting this standard, the following 
performance indicators will be considered:  
a. 	  Does the Unit have a training plan in place and funds available to 
fully implement the plan? 
b. 	  Does the Unit have a minimum number of hours training 
requirement for each professional discipline, and does the staff 
comply with the requirement? 
c. 	  Are continuing education standards met for professional staff? 
d. 	  Does the training undertaken by staff aid to the mission of the 
Unit?   
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     17 
   
   
APPENDIX B 
Point Estimates and Confidence Intervals Based on Case File 
Reviews 
We calculated confidence intervals for key data points for the case file 
reviews. The sample sizes, point estimates, and 95-percent confidence 
intervals are given for each of the following: 
 
Table B-1: Confidence Intervals for Case File Review  Data  
Point 
Sample  95-Percent Confidence 
Data Element Description   Estimate 
Size  Interval 
(percentage) 
Case files did not include 
documented supervisory approval  98  32.7  24.841.6 
for the opening of investigations.  
Case files did not include 
documented supervisory approval  87  1.1  0.26.6 
for the closing of investigations.  
Cases were not opened within 
98  11.2  6.718.3 
60 days of receipt.  
The amount of time from receipt 
of referral to case opening could  98  7.1  3.713.5 
not be determined.  
Case files included documented 
98  3.1  1.18.3 
periodic supervisory  reviews.  
Source: Office of Inspector General analysis of Medicaid Fraud Control Unit case files, 2012.  
 
 
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     18 
   
   
APPENDIX C 
Investigations Opened and Closed by Provider Category for 
FYs 2008 Through 2010 
Table C-1: Fraud Investigations  
Provider Category   FY 2008   FY 2009   FY 2010  
Facilities  Opened  Closed  Opened  Closed  Opened   Closed
     Hospitals  5  1  2  3  2  3
     Nursing Facilities  0  2  1  0  1  2
     Other Long-Term Care Facilities  0  0  0  0  0  0
     Substance Abuse Treatment         
0  0  0  0  0  0
    Centers  
     Other  4  8  11  3  5   6 
Practitioners  Opened  Closed  Opened  Closed  Opened   Closed
     Doctors of Medicine or  
2 1 2   3  3   4  2
     Osteopathy  
     Dentists  2  2  2  2  7  7
     Podiatrists  0  0  1  0  1  0
     Optometrists/Opticians  1  1  0  0  0  0
     Counselors/Psychologists  8  23  5  6  1   7
     Other  2  1  0  4  2  1 
Medical Support  Opened  Closed  Opened  Closed  Opened   Closed
     Pharmacies  4  14  0  0  5   3
     Pharmaceutical Manufacturers  7  8  9  4  17   12
     Durable Medical Equipment  
1  0  0  2  2  2
     and/or Supplies 
     Labs  0  0  1  1  1  0
     Transportation Services   0  2  1  0  0  1
     Home Health Care Agencies  16  13  0  13  11  6
     Home Health Care Aides  4  11  1  1  1   1
     Nurses, Physician Assistants,  
     Nurse Practitioners, Certified   1  1  0  1  0  0
     Nurse Aides 
     Radiologists  0  0  0  0  0  0
     Medical SupportOther    2  0  5  5  4  3 
Program Related  Opened  Closed  Opened  Closed  Opened   Closed
     Managed Care   0  12  0  0  0   0
     Medicaid Program  
0  0  0  0  0  0
     Administration 
     Billing Company   0  1  0  0  0  1
     Other  0  1  0  0  5  1
        Total of All Provider  
59  113  42  48  69   58 
     Categories 
Source: Missouri Medicaid Fraud Control Unit (Unit). 
 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     19 
   
   
 
Table C-2: Patient Abuse, Neglect, and Funds Investigations  
Provider Category   FY 2008   FY 2009   FY 2010 
  Opened  Closed  Opened  Closed  Opened   Closed 
     Nursing Facility  53  51  40  48  32  30
     Nondirect Care   1  5  1  1  0  0
     Other Long-Term Care   2  2  2  3  1  3
     Registered/Licensed  
     Nurses/Physicians   0  0  0  0  0  0
     Assistants/Nurse Practitioners 
     Certified Nurse Aides  0  0  0  0  0  0
     Home Health Aides  0  9  1  1  1  0
     Other  10  5  7  6  2   6
      Total  66  72  51  59  36   39 
Source: Missouri Unit.  
 
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     20 
   
   
APPENDIX D 
Agency Comments 
 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)    21 
   
   
 
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)    22 
   
   
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)    23 
  Ensure Tbat Case Files Are Not Vulnerable to Unauthorized 
" - '.,  .  . 
Response: We concur with this recommendation.  Potential access issues have been 
addressed by assuring that case files are secured in locked file cabinets or our key-coded 
evidence room. 
Analysis:  MFCU acknowledges the importance of securing potentially sensitive records 
and materials including our work product and potential confidential materials obtained in 
investigations and cases. 
Plan:  Since the review period, lockable file cabinets, lockable desk drawers and a 
secure, locked key-coded evidence room have provided us the opportunity to secure all case files 
and ensure confidential material is secure. 
MFCU policy makes clear all  employees' obligation to protect not only our work 
product, but also patient and provider confidentiality as required by law.  Compliance will be 
strictly enforced. 
Conclusion 
The Missouri MFCU appreciates the efforts of HHS-OIG and the consultations provided 
by the Onsite Review.  We understand and concur with the recommendations, which will be 
implemented as our electronic MFCU case management system is completed. 
As the statistics you note demonstrate, MFCU has achieved cost effective protection of 
the Medicaid Program over the course of the review period.  We have continued to improve both 
on  our  record  of recovery  and  our  prosecutorial  successes  and  will  implement  the 
recommendations you have made in a manner consistent with our mission. 
Respectfully submitted, 
Josepli P:13indbeutel 
Assistant Attorney General 
Director, Medicaid Fraud Control Unit 
4 
Missouri State Medicaid Fraud Control Unit: 2011 Onsile Review (OEI-07-11-00750)  24   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Brian T. Pattison, Regional 
Inspector General for Evaluation and Inspections in the Kansas City 
regional office.   
Brian T.  Whitley served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff who conducted the study include 
Michael J. Brown, Susan Burbach, and Teresa Dailey.  Office of Audit 
Services staff who conducted the study include Ann Lowe and Julie Wiser.   
Office of Investigations staff who conducted the study include Margaret 
Walker.  Central office staff who provided support include Kevin Farber, 
Ryan Moul, Debra Roush, Richard Stern, and Jason Weinstock.   
 
Missouri State Medicaid Fraud Control Unit:  2011 Onsite Review (OEI-07-11-00750)     25 
   
Office of Inspector General

http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office  of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations  
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office  of Counsel to  the Inspector  General  
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs  and operations and providing all 
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.