Department of Health and Human Services

OFFICE OF 
INSPECTOR GENERAL 
HOTLINE REFERRAL FOllOW-

"RVIQ:S' 
Richard P. Kusserow 
INSPECTOR GENERAL 
'0 
JANUARY 1991 
.(Ii"dm  OFFICE OF INSPECTOR GENERAL 
The mission of the Offce of Inspector General (OIG) is to promote the effciency, 
effectiveness, and integrty of programs in the United States Deparment of Health and Human 
Services (HS). It does this by developing methods to detect and prevent fraud, waste, and 
abuse. Created by statute in 1976, the Office of Inspector General keeps both the Secretar 
and the Congress fully and curently informed about programs or management problems, and 
recommends corrective action. The OIG performs its mission by conducting audits 
investigations, and inspections with approximately 1,400  located around the 
staf strategically 
countr. 
OFFICE OF EVALUATION AND INSPECTIONS 
This report is produced by the Offce of Evaluation and Inspections (OEI), one of the thee 
major offces within the OIG. The other two are the Office of Audit Services and the Office of 
Investigations. Inspections ar conducted in accordance with professional standards 
developed by OEI. These inspections are typically short-term studies designed to determne 
program effectiveness, effciency, and vulnerabilties to fraud or abuse. 
This report, entitled "Hotline Referral Follow- " evaluates the procedures employed by each 
of the Operating Divisions within HHS when processing the Deparent s Hotline referrals 
that do not require a status report back to the Offce of Inspector General. 
Bar 
This report was prepared under the diection of  Steeley, Chief of the Health Care 
Branch in Evaluation and Inspections. Parcipatig in the project were the following people: 
Headquarters 
Thomas A. Noplock Project Leader 
Vicki A. Greene 
Barbara Tedesco 
Cynthia Selby  HOTLINE REFERRAL FOllOW-

Richard P. Kusserow 
INSPECTOR GENERAL 
OEI-12-90-01060  JANUARY 1991  EXECUTIVE SUMMARY 
PURPOSE 
The purpose of this study is to evaluate the procedures being employed by each of the 
Operating Divisions (OPDIVs) within the United States Deparment of Health and Human 
Services (DHHS) when processing the Deparent s Hotline referrals that do not require a 
report back to the Office of Inspector General (OIG). 
BACKGROUND 
The Office of Inspector General (OIG) is responsible for conducting and coordinating 
investigative activities related to fraud, waste , abuse, and mismanagement in DHHS programs 
and operations. The OIG manages the DHHS Hotline, which receives complaints and 
allegations of fraud, waste, and abuse. Incoming Hotline cases are reviewed and referred to 
one of the five OPDIVs. 
Hotline referrals required a memorandum from the OPDIVs be sent 
Pror to August 1989,  all 
back to OIG within 60 days explaining actions taken on the case. These referrals are now 
known as LTR-21 cases. Effective August 1 , 1989, OIG adopted a new procedure which no 
longer required OPDIVs to respond back to it on cases in which a follow up does not appear 
to be necessar. These referrals, known as LTR-22 cases, are conveyed to the appropriate 
OPDIVs using the LTR-22 cover letter. The OPDIV is then required to develop the case
, take 
any corrective action that they determne to be necessary, and maintain controls on these cases 
so that a post-review of the actions taken can be done in the future. 
We conducted a study to determne what control systems the five OPDIV s have in place to 
handle the LTR-22 cases, and to obtan the status of a sample ofLTR-22 cases referred to 
durg 
them  the first three months of the new procedure. 
FINDINGS 
The Health Care Financing Administration (HCFA) Lacks Controls On LTR-
22 Cases. 
Forty-nine percent of HCFA cases could not be located. The HCFA Central Office does not 
require any response from the Regional Offices (ROs) on the cases. There are no standards 
across ROs for handling LTR-22 cases. Some ROs maintain control over the cases referred to 
them while others send them out to the Medicare contractors with no time frame for 
completion or response back to the ROs. The average age of an open case was 166 days, and 
the average length of time before the last action was taken on a case was 106 days.  Social Security Administration (SSA) Controls Its LTR-22 Cases From Central Office, But 
Lacks Timely Follow-up Procedures On Open Cases. 
The SSA has a system in place to control LTR-22 cases. The SSA Central Offce requires its 
components to respond to them with a final disposition of each case. However, it does not 
follow up on open cases until thee months after a referral is made. The average age of 
open case was 162 days, and the average length of time since any action was taken on a case 
was 101 days. 
The Office Of Human Development Services (OHDS), Public Health Service (PHS), And 
Family Support Administration (FSA) Have Control Systems For LTR-
21 Cases. 
While they did not receive any LTR-22 cases durng our study period, OHDS, PHS and FSA 
log in the LTR-21 cases at the Central Offce level, and control is maintaied over the cases 
with due dates. Components respond back to the Central Offices with a wrtten final report. 
RECOMMENDATIONS 
The HCFA Should Institute Controls At Both HCFA Central Offce And At ROS. 
The HCFA Central Offce should control cases sent out to their ROs by 
requirng them to 
respond within a specific time frame on the disposition of all cases. Central Office should 
develop minimum guidelines for RO handling of Hotlne cases. 
Guidelines should include 
requirng the ROs to have a uniform minimum set of controls on al cases that they send out to 
the contractors as well as the ones they handle at the Regional Office level, and maintain the 
OIG-issued control number on a log system. 
The SSA Should Adhere To Its System Of Controls. 
The SSA' s system for controllng LTR-22 cases should be fully utiized. Time frames 
established for follow-up should be adhered to and treated as a serious due date for an interim 
or final response from their components. The SSA and its components should record and 
maintan the OIG control number. 
When OHDS, PHS, And FSA Begin To Receive LTR-22 Cases, They Should Maintain 
Them Using The Same Control Systems That Are Currently In Place For LTR-21 Cases. 
OHDS, PHS, and FSA should maintain any LTR-22 cases that they receive under the same 
control system as the LTR-21 cases so that they may track and follow up on them. 
SUMMARY OF COMMENTS 
Four of the five OPDIV s commented on the draft report (the FSA did not offer comments). 
They all concurd with the recommendations. The HCFA plans to develop uniform 
guidelines for the regional offces, and has alady begun to implement procedures requirng  the regional offces to provide central offce with a status for each case within 45 days of 
receipt. The SSA wil communicate to components the need for timely development and 
response to SSA central offce. Both the PHS and OHDS plan to maintan the cases under the 
same control system now in place for LTR-21 cases so that they may track their resolution and 
implement corrective actions if necessar. 
111  . . . . ..  . . . ...  ..  ..  ..  ...   ...   ...   ...  ...   ...   ...   ...   ...   ...   ...   ....    .....     .....     .....     .....     .....     .....     .....     .....     .....    ....
. ..  ..  ..  ...   ....    ....    ....    ....    ....    ....    ....    ....    ....    ....    ..... .   . ...  .  ....     ......      ......      .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....    . .. .  . ..  . . . .  ...   ...   ...   ...   ...   .. ..  .
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
INTRODUCTION 
Background. . . 
Methods. 
FI N DI NGS  ................................................... 6

Health Care Financing Administration 
Social Security Administration 
Public Health Service,

Family Support Administration and 
Office of Human Development Services. . . 
RECOMMENDATIONS 
COMMENTS. 
APPENDICES 
Appendix A: Methodology and Sample Selection 
. . . . . . . . . . . . . A -
Appendix B: Tables 
...................................... B-

Appendix C: Detailed Processing Procedures. . . 
. . . . . . . . . . . . . C -
Appendix D: Detailed Comments on the Draft Report. . . . . . . . . . D - 1  INTRODUCTION 
The purose of this study is to exame the procedures being employed by each of the 
OPDIVs within DHHS when processing the Deparent s Hotline referrals that do not require 
a status report back to OIG. 
to perform a qualtative review of the outcome of the Hotline referral cases 
The purose is  not 
selected for study. It is to review and analyze the procedures and controls in place to track a 
category of cases as they are referred from OIG, to OPDIVs, to Regional Offices (ROs), and 
ultiately to the Medicar contractor or State that wil actually develop or "work" the case. 
The category of cases that are the subject of this inspection are the more 
tyical or routine
cases that OIG no longer tracks themselves. 
BACKGROUND 
The DHHS is composed of five OPDIVs: 
Offce of Human Development Services 
Public Health Service 
Admnistrtion 
Health Care Financing 
Social Securty Admnistration 
Famy Support Admnistration 
The OIG is responsible for conducting and coordinatig investigative activities related to 
fraud, waste, abuse, and mismaagement in DHHS programs and operations, includig 
wrongdoing by applicants, grantees, or contractors, or by HHS employees in the performance 
of their offcial duties. 
As par of their official duties, the Offce of Investigations (01) within OIG is responsible for 
managing the DHHS/OIG Hotlne (Hotline). The Hotlne receives complaints and alegations 
of fraud, waste, and abuse from agency employees and the public, and refers the information 
to one of the five DHHS OPDIV s for furer development, investigation, audit, program 
review, or other appropriate action. The OIG cases come in the form of calls and letters to the 
Hotline, as well as referrals from the General Accounting Offce (GAO) Hotline that are 
related to DHHS programs. 
Approximately 100 to 140 calls are received daily in 01 between the hours of 
10:00 a.m. to 4:00 p.m. Approximately 80 percent of al calls are Medicare related, except
durg 
the fIrst four days of the month when the Social Securty checks come out, durng 
which time 80 percent of all calls ar Social Securty related. Most of the Medicare calls are 
complaits about physician biling, with occasional hospita biling complaits mied in. In 
addition, 01 receives approximately 10 to 12 letters per work day. Most of these letters are 
Medicare related.  All cases that Hotline operators receive are logged in, assigned an OIG case control number 
should receive the case. (Only a very small 
and then screened to determne which  OPDN 
number of Hotline cases ar handled dictly in 01. For example, highly sensitive employee 
cases may remai internal. 
Pror to August 1 , 1989, 01 reuired the OPDIVs to respond back to them within 60 days on 
all  referrals with a memorandum explaining actions taen on the case. Under these 
procedures, all Hotline referrals were held in 01 inventory as open cases until they received a 
fmal disposition on the cases from the OPDIVs. 
Office of Investigation s Change in Procedure 
The 01 has gained much experience though managig the DHHS Hotline. This experience 
has shown that they do not need to receive feeback from the OPDIV s on all Hotline cases. 
In order to help reduce the admnistrative burden, 01 decided not to require the OPDIV to 
respond back to them on cases in which 01 follow up does not appear to be necessar. 
To implement this policy, effective August 1 , 1989, 01 began dividing the incomig Hotline 
cases into non-tyical and routine cases. The non-typical cases are caled LTR-21s, and the 
routine ones are referred to as LTR-22s (so named for the "cover letter-21" or "cover 
letter-22" that transmits the case). This inspection focuses on the LTR-22 cases. 
The 01 applies the following guidelines to determne when to use the LTR-22 cover 
memorandum: 
Use this LTR- program fraud cases, such as complaits 
22 procedure in  typical 
that (1) a Social Securty disabilty beneficiar is 
gettig payments ilegally 
because of concealed work activity; (2) an SSI recipient is getting benefits despite 
excess resources; (3) an AFC recipient is getting benefits despite support being 
provided by another person; or (4) a doctor biled Medicare for services not 
rendered or commtted an assignment violation. (Most Medicare biling 
complaits we get wil be handled this way. 
use the procedure if the complaint appears to involve (1) an HHS 
Do  not 
employee; (2) a contract or grant; or (3) some other element that may make it 
suitable for tracking to conclusion by the Hotline. 
The OPDIVs must continue to respond to 01 within 60 days on the LTR-21 cases, but do not 
need to reply to OIG Hotline on the LTR-22 cases. Upon referral to the appropriate OPDIVs, 
the LTR-22 Hotline cases ar closed out by 01. However, the OPDIV is still required to 
develop LTR-22 cases and tae any corrctive action that it determnes to be necessar, 
includig referrng the case to an HHS/OIG Offce of Investigations Field Offce (OIFO) if 
evidence of fraud or abuse is found.  The body of the LTR-22 (which is attached to all routine cases), contans the following
instrctions to the OPDIVs: 
If development in accordace with 
established instrctions discloses substatial 
evidence of a crime, the complait should be referred to the appropriate OIFO. 
The referral should always bear the OIG Hotline complaint number fwhich is the 
unique number attached to each case J as that number is the key to tracking cases 
through our control system. 
Your offce need not reply diectly to the OIG Hotlne on this complaint. It is 
assumed you wil take all actions necessar to resolve the issues, including 
It is important, however, that you maintain 
referral to an OIFO, if appropriate. 

controls on the case, so that a post-review of the actions taken can be done in the 
(emphasis added).
future 
It is the last sentence of OJ's letter to the OPDIVs that contains the inspection issue. Simply 
put, 01 is concerned about how the OPDIVs are handling the LTR-22 cases and whether or 
not there is a system of controls being maintaned. As evident in the letter, 01 assumes that 
the OPDIV wil maintan its own controls on cases, even though they do not need to provide 
01 with furher information about the cases. Additionally, OPDIVs are advised to include the 
OIG control number in their tracking system so that there is always a common varable for 
identifying and reportng on about the case. (See Figure 1 for a diagram of the case flow. 
METHODS 
There was a dual approach to determning what system of controls OPDIV 
s have for handling 
LTR-22s. One was to conduct a general surey for each of five OPDIVs (and each often ROs 
within HCFA) to determe what elements were contained in their control systems. The other 
was to determne the status of a sample ofLTR-22 cases referred to OPDIVs durng the fIrst 
thee months ofthe LTR-22 procedur. (See Appendix A for Sampling Methodology. 
The series of general, procedural questionnaies began with an interview of 01 officials to 
determne how they refer Hotline cases to OPDIVs. We then interviewed HCFA and SSA 
Central Offce Hotline offcials to obtan detaled descriptions of their procedures for handling 
LTR-22 cases. A similar interview guide was admnistered to FSA, PHS, and OHDS over the 
telephone. 
The sample of LTR-22 cases chosen for our review contaned cases from only HCFA and 
SSA. 
To determe the status of each HCFA case, we provided each Regional Offce with a list of 
Hotline cases that Central Offce sent to the RO durng the three month study period. We then 
conducted a telephone interview with each of the ROs to obtain the status (open
, closed, or
unkown) of each case. We also asked for the date they received each case, the date the case 
was closed, and the date the last action was taken on the case.  To determe the status of SSA cases, we performed an on site review of 22 cases in Central 
Office. We collected the same information on each case as we did for HCFA cases. For six of 
SSA cases, Central Offce contacted the component that was handling the case to obtain its 
status and the date the last action was taen.   
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FINDINGS

Health Care Financing Administration 
(HCFA) Lacks Controls On L TR-22 Cases. 
At each phase in the Hotline referral process when cases are sent from one office to another 
there is lack of follow-up and controL The cases are sent from HCFA Central Office to the 
ROs, and in tur to the Medicare contractors. As wil be explained below, there is a lack of 
control and consistency in procedure at each stage of the process. 
There are no Control Procedures in HCFA Central Office for LTR-22 Hotline Cases Sent 
Out To ROs. 
Once cases are sent out to ROs, HCFA Central Office does not require the ROs to respond 
back to them on the status of the cases. The HCFA Central Office records each case and then 
sends them out to the ROs without requirng any interim or final report. 
Currently a study (begun in December) is being conducted by the Office of Budget 
Administration to determne what type of system should be instituted to track and analyze the 
cases. 
The HCFA was unable to locate almost  The ROs were 
half of the Hotline cases in the sample. 
unable to report the status on 49 percent (81) of the cases in the sample. 
The average number of days in 
Twenty-nine percent (48) of the cases were still open. 

inventory for open  165.  days, and the average number of days since the last action 
cases was 
(See Table 1). 
was taken on a case was 106 

TABLE 1 
HCFA Sample of Cases 
Percent  Number 
Unable to Locate  49% 
Open  29% 
Closed**  22% 
totals:  100%  166 
*Average number of days in inventory:  165. 
Time since last action taken: 106. 
Average number of days to close a case:  71. 
(See Appendix B)  There are no Standards in HCFAfor Handling LTR-
22 Hotline Cases. 
The HCFA Central Offce does not impose any guidelines on the ROs for handling the hotline 
cases, and is unaware of what procedures ROs have in place for handling and controlling the 
cases. In addition, there are no central policies concerning which cases would be appropriate 
to handle at the RO level and which at the contractor level, which data fields to record, how 
long the ROs should maintan information on the cases, or how often the ROs should require 
status reports from the contractors. 
The Hotline referrals 
There is no consistency across ROs in processing OIG Hotline cases. 
are handled differently in each of the ten ROs. Each RO independently determines the extent 
and type of control system it wil have for the Hotline cases. Controls var from very firm to 
no controls at al. Some ROs do not keep a record of the cases sent out to the contractors, 
while others maintain a copy of the case file and put time frames on the cases for interim or 
final reports from the contractors. 
Six ROs log the cases in when they receive them. Three ROs do not have a log in system
, and 
one logs in only the cases that they work on within the RO. 
In their letter to the OPDIVs, 01 recommends that their case number be recorded for 
identification and tracking of each case. Four of the ROs record the OIO-
issued case control 
number in the log. The varables that ROs usualy record (if there is a log-in procedure) are 
(1) beneficiar or complainant name, (2) the date the case was received, and (3) the date the 
case is due for completion. One RO records 16 varables, but not the 01 case number. 
Three of the ROs review each case internally to determne whether to have the contractor 
handle it, or to resolve it within the RO. The other seven ROs automatically send most or all 
cases out to the contractors for development. Cases that are handled at the RO level tend to be 
more routine, such as beneficiar questions about the Explanation of Medicare Benefits 
(EOMB), and cases that do not appear to involve fraud or abuse. 
Seven of the ROs require a final and/or interi response from the contractor; the other three 
almost never receive a report on the cases forwarded to the contractors. In most cases 
responses and updates flow in as the contractor completes the case and/or sends a letter to the 
complaiant, with no specific time by which the contractor must provide the RO with 
information. Only three ROs set a specific time frame for interim and final reports from the 
contractors. Two of these maintain very close contact with the contractors while the case is 
pending. (When contractors report to the RO, they typically send the RO a copy of 
correspondence sent to the original complainant or beneficiar. 
All seven of the ROs that receive information on the final disposition of cases from the 
contractors state that they review the complaint and action taken to determne the 
reasonableness, responsiveness, and thoroughness of the action taken by the contractor.  Two of the ROs that do not log in the cases still receive final status reports from the 
contractors. However, unless they receive a report from the contractor, these ROs have no 
way of knowing if cases were ever handled, since they do not have a tracking or log in system. 
Most ROs maitain a completed fie on Hotline cases that come though their offce. Eight 
ROs keep copies of the original case from 01 along with any work they have done internally, 
and copies of any information on the case that the contractors send in. The two ROs that do 
not maintain completed fies on Hotline referrals also do not require contractors to provide 
them with updates or final reports. 
None of the ROs seemed to be aware that there was a change in procedure as of August 1 
1989, creating a category of cases that does not require a response back to 01. One RO 
thought that the new procedure was requirng them to begin sending responses to HCFA on 
some cases, and that previously no responses were required. Thus, the ROs were universally 
unaware of the distinction between LTR-21s and LTR-22s, and were unfamiliar with the 
terminology. 
After the difference between the two types of cases was explained to each RO, eight ROs 
reported that they do not handle the two types of cases any differently. The fact that they are 
not handled diferently is not necessarly an indication of the quality of the control system. In 
some ROs, they are all handled with the same tight controls, and in others they are all sent out 
to the contractors without being logged in. 
Cases that are sent outside HCFA' s system or that move from region to region are not 
maintained in RO or Central Office control system. Cases that are sent to "outside agencies 
(such as a State agency) are closed from a RO perspective. The ROs (even those that do 
maintan control systems) that have had cases sent somewhere other than a HCFA contractor 
do not require any update or final response from the agency. Most ROs reported that if cases 
were sent to them erroneously, they send them to the correct RO without notifying Central 
Office. (See Appendix C for a detaled description of HCFA' s procedures. 
Social Security Central Office Maintains A Control System On L TR-22 Cases 
But Lacks Timely Follow-up. 
Most of the Hotline cases that SSA receives are allegations of program fraud involving people 
collecting disabilty who are reported to be working, or are Supplemental Security Income 
(SSI) cases. 
Within SSA, the Division of Internal Control and Security 
The SSA has a control system. 

(DICS) handles DHHS Hotline referrals. When cases arve from the OIG, they are logged in 
and each case is copied and maintained in a fie. Currently the log-in system is manual, but 
there are plans to automate. An index card is created and filed by beneficiar name (the OIG 
case number is not recorded).  ** 
Initial case development is done centrally on each case before sending it out to one of SSA 
components for further development. (If a Hotline report clearly sets out the facts with 
enough specific information to indicate that fraud is probably involved, DICS immediately 
refers the case to 01.) 
Social Security maintains an open fie on each case referred to components. Components 
have six weeks to respond to Central Office. There are approximately 1 300 Field Offices, 8 
processing centers, and other offices where the case might be referred. 
Although SSA components are given six weeks to respond back to DICS in the transmittal 
memo, Central Offce does notfollow up until about three months after the case is sent to the 
component. 
The average number of days that a Social Securty Hotline case was in inventory was 161.9 
days. The average length of time since any action was taken on the open cases was 100. 
days (see Table 2). 
TABLE 2 
Social Security Hotlne Cases 
Percent  Number 
Unable to Locate 
Open  55% 
Closed**  36% 
totals:  100% 
*Average number of days in inventory:  161.9  days 
cases). Time since last action taken: 100.
9 days 
cases). Five of the twelve open cases were referred 
directly back to OJ because they involved Social 
Security Number fraud. 
Average number of days to close a case:  38. 
In October 1987, SSA Central Offce developed guidelines to institute standardized handling 
The guidelines consist of highly detailed instrctions on 
of Hotline cases throughout  SSA. 
how DICS and the components should respond to the public and better handle the cases. The 
guidelines also instrct the components how and where to refer cases for criminal 
investigation.  Except for the fact that the LTR-21s go back to 01 when they are completed, LTR-21s and 
LTR-22s are handled the same by SSA and its components. Components are required to 
respond to Central Office on the final disposition of all cases in wrting, regardless of whether 
SSA has to report back to 01 on the case. 
When a case comes back in, SSA Central Office looks over the file to make sure that all of the 
issues have been handled, and then fies the completed case. 
an average of 38.
It took  SSA 
days to close the 8 cases that were closed. 
Public Health Service (PHS), Family Support Administration (FSA), And Office 
Of Human Development Services (OHDS) Have Control Systems For L TR-
Cases. 
Although there were no LTR-22 cases referred to PHS, FSA, or OHDS during the three month 
study period, they were interviewed to determine how they would handle DHHS Hotline cases 
for which no response back to 01 was required. Therefore, information provided by the these 
three OPDIVs is necessarly based on how the LTR-21 cases (which require a response to 01) 
are handled. Only Central Offices that handle 01 Hotline cases were interviewed; the ROs 
were not contacted in the three OPDIVs that did not receive any of the study cases. (See 
Appendix C for a more detaied description of SSA' s procedures. 
All three OPDWS state that they would handle LTR- The 
22s under the same control system. 
PHS, OHDS, and FSA log in cases as they arve from 01, require a response back from the 
components within a specified time period, and all record the OIG case number. Each of the 
three OPDIVs report that they would handle the LTR-22 cases under the same control system 
as LTR-21s are handled if/when they begin to receive LTR-22s (see Appendix C for a detailed 
review of each OPDIV' s procedures).  RECOMMENDATIONS 
The HCFA Should Institute Controls At Both The HCFA Central Office And At ROs. 
The HCFA Central Offce should control cases sent out to their ROs by 
requirng the ROs to 
respond within a specific time frame on the disposition of all cases. Central Offce should 
develop minimum guidelines for RO handling of Hotline cases. Guidelines should include 
requirng the ROs to have uniform minimum set of controls on all cases whether they are sent 
out to the contractors or handled at the RO level, and maintaining the OIG control number on 
a log system. 
The SSA Should Adhere To Its Systems Of Controls. 
While SSA has an established system in place to control LTR-22 cases, this system should be 
fully utilized. Whatever time frames are used should be adhered to and treated as a serious 
due date for an interim or final response from their components. SSA and its components 
should record and maintain the 01 case number. 
When OHDS, PHS, FSA Begin To Receive LTR-22 Cases, They Should Maintain Them 
Using The Same Control Systems That Are Currently In Place For LTR-21 Cases. 
The three OPDIVs that have not received any LTR-22 cases have control systems for the 
LTR-21 cases. These three OPDIVs should maintai any LTR-22s that they receive under the 
same control system as the LTR-21 cases so that they may track and follow up on them.  COMMENTS

Of the five Department of Health and Human Services OPDIV s, the Health Care Financing 
Administration, Social Security Admnistration, Public Health Service and Office of Human 
Development Services commented on the draft report. The Famiy Support Administration 
did not provide comments. All commenters expressed support for the findings , and concuITed 
with our recommendations. 
The HCFA plans to develop uniform guidelines for the regional offices, and has already begun 
to implement procedures requirng the regional offices to provide central office with a status 
wil communicate to components the need 
for each case within 45 days of receipt. The  SSA 
for timely development and response to SSA central offce. They wil also send out reminders 
to every component regarding the required timeframes for follow-up. Both the PHS and 
OHDS plan to maintain the cases under the same control system now in place for LTR-
cases so that they may track their resolution and implement corrective actions if necessary. 
In Appendix D, we present the full text of the OPDIV comments.  APPENDIX A 
METHODOLOGY AND SAMPLE SELECTION 
The total number of Hotline complaints recorded by 01 durg 1989, while the new LTR-
procedure was in effect, is as follows: 
Month  Phone Calls  Letters 
August  770  357 
September  586  189 
October  799  164 
November  914  139 
December  506  116 
Durig the review period of August through October, 01 made 23 LTR- SSA. 
22 referrals to 
This total is composed of 5 referrals from GAO, 7 referrals received by telephone, and 11 
referrals received by mai. Since one of the SSA cases was transferred to HCFA, 22 of the 23 
SSA LTR- Central Offce. 
22 cases were reviewed on site at  SSA 
Durg 
the review period, 01 made 278 LTR-22 referrals to HCFA. This total is composed of 
3 referrals from GAO, 5 referrals received by telephone and 270 referrals received by mail. 
There were no LTR-22 cases referred to FSA, OHDS, or PHS during the three month review 
period. 
Sampling Methodology for HCFA Cases 
The universe consists of all LTR-22 cases referred to the OPDIVs from the period August 
1989 though October 1989. There were 278 LTR-22 referrals to HCFA and 23 LTR-
referrals to SSA. Since the universe of referrals to SSA was small, all of their cases were 
sampled. 
Sample size estimates are based on the assumption that 50 percent of the cases are stil open 
since no information was available on this frequency. Assuming that the frequency of open 
cases is 50 percent, a sample of 166 cases provides 95 percent assurance that the true value 
wil lie within 5 percentage points of this estimate. A response rate of 100 percent was 
achieved for this telephone survey. 
To obtan the sample of 166 cases, a systematic sampling approach was used. Three random 
starting points were chosen and every fifth case from each random start thereafter was selected 
from a list of HCFA cases. The list of cases was provided by 01 from the file they maintain.  Data Collection 
We conducted telephone interviews during the week of March 12 to determine the status of 
166 HCFA LTR-22 cases, or 60 percent of the universe. The 166 case sample is composed of 
2 received from GAO, 3 received via telephone, and 161 received by mail. 
The HCFA case files were at the ROs or the fiscal contractors (carers or intermediares). The 
HCFA provided the following information for each of the 166 cases to be sampled: 
Name of beneficiar. 
Social Securty Number. 
HCFA RO that the case was sent to. 
Date that the case was sent to the RO. 
In addition to determning the status on specific LTR-22 cases, each of the five OPDIVS was 
interviewed to determine what type of systems exist at the Central Office level to control 
LTR- and HCFA by
22 cases. A discussion guide was administered in person to  SSA 
interviewing the component responsible for the Hotline. The OHDS , PHS, and FSA was each 
mailed a discussion guide and then interviewed by telephone. 
A- 2
 APPENDIX B 
Table A 
HCFA Cases 
Survey of  166 
Cases  Cases  Status 
Region  Total 
Closed  Open  Unknown 
100 
VII 
VII 
100 
Totals  166 
Percentage totas are weighted averages.
 Table B 
Days HCFA Cases Were In Central Office 
A verage Number  of 
Region  Cass  Days 
18.4 
III  14. 
16.3 
21.4 
20. 
VII  N/A 
VIII  25. 
24. 
Totals  164  18. 
weighted average 
N/A = Computation is Not Applicable. 
NOTE: The time between the dates that 01 referred the cases to HCFA 
and the dates that HCFA fOlwarded the cases to the ROs.  Table 
Close HCFA Cases 
A verage Number 
 of  Days  To 
Region  Cases  Days 
19. 
95. 
III  60. 
N/A 
77. 
49. 
VII  N/A 
VIII  69. 
99.4 
56. 
Total  71.9 
weighted average 
NOTE: The tie between the dates that 01 referred the cases to HCFA 
and the dates the cases were closed. 
Table D 
Close HCFA Cases 
A verage Number  of  Days For ROs  To 
Region  Cases  Days 
14. 
70.3 
ill  72. 
N/A 
57. 
31.0 
VII  N/A 
VIII  50. 
77. 
47. 
Total  56. 
weighte average

NOTE: The time between the dates that HCFA forwarded the cases to 
the ROs and the dates that the cases were closed.  Table E 
Aging HCFA Open Cases Average Number of Days 
Region  Cass  Days 
N/A 
167.3 
III  N/A 
154.4 
182.2 
135 
VII  N/A 
VIII  N/A 
163.3 
N/A 
Total  165. 
NOTE: The time between the dates that 01 referred the cases to HCFA 
and the dates of the interview to obtai the survey inormation. 
Table F 
HCFA Open Cases Average Number of Days 
Last Action Taken  On 
Region  Cases  Days 
N/A 
103. 
III  N/A 
118. 
104. 
VII  N/A 
VIII  N/A 
104. 
N/A 
Total  106. 
weighted average 
NOTE: The time frm the dates of the last actions taen on the cases to 
the dates of the interviews. 
B - 4  APPENDIX C 
DETAILED PROCESSING PROCEDURES FOR LTR-22 HOTLINE CASES 
Health Care Financing Administration

Within HCFA, the Office of Budget Admnistration (OBA), Management Planning and 
Analysis Section, Management Analysis Branch handles the Hotline referrals. When OBA 
receives 01 Hotline cases, they are logged in using a dual system of index cards. One is a 
numerical file with the cases in order by 01 case number. The other is 
fied by beneficiar or 
name of person reportng the alleged complaint. Both of these card files are cross referenced 
to each other and contain the date the case was sent out to the RO. Each case is also recorded 
on a paper log with case number, the date HCFA received the case, and whether the case was 
received from GAO Hotline. 
After the case is logged in, it is sent to one of ten ROs. The HCFA' s policy is to send the 
cases out within one week of receipt in Central Office. There is no 
preliminar research 
conducted on the cases within HCFA Central Office prior to sending them out to the ROs. 
Central Offce maintais a copy of the LTR-22 case as it was sent from 01, and places them in 
a fiing cabinet along with the LTR-21 cases. 
In most of HCFA ROs, the Beneficiar Services (or Program Services) Branch within the 
division of Medicare handles the Hotline referrals. Initially, the cases go to the Regional 
Admnistrator for each RO. From there, they are forwarded to the Beneficiary Services 
Branch within the RO for processing. 
Five of the ROs maintai their log in/tracking systems on computer (usually on DBASE llI+). 
For the most part, the carers, intermediares, and PROs directly send cases to an OIFO if 
there is potential fraud and abuse found in the course of developing a Hotline case. 
In six 
ROs, the contractor determnes if a case should go back to 01 for investigation and possible 
prosecution. 
One RO is in constant close contact with offcials from 01, who are located in their building. 
In some cases this RO refers cases to 01, and in others the contractors refer them. 
It is reasonable to hypothesize that the ROs that handle cases in their immediate office 
determne at the RO level whether to send the cases to 01, and those that send all the cases to 
contractors have the contractor refer potential fraud/abuse cases to an OIFO. However, two 
ROs that send nearly every case through to the contractor have the contractor send the case 
back to the RO if potential fraud or abuse is found, and the RO decides whether to send it to 
OIFO. 
C - 1
 Three ROs knew they had received some cases that required a response back to HCFA Central 
tu 
Offce (and in  to 01) durng the thee month study period. The remaider of the ROs 
were unsure about receiving any cases for which a response to HCFA Central 
Offce was 
required. 
Administraton 
Social Security 
Within SSA, the Division of Internal Control and Securty (DICS) handles DHHS Hotline 
referrals. When cases arve from 01, they are logged in, and each case is copied and 
maintaned in a fie. Curently the log-in system is manual, but there are plans to automate. 
An index card is created and fied by beneficiar name (01 case number is not recorded). 
Initial case development is done centrly before sendig each case out to one of SSA 
furer 
components for  development. If a hotline report clearly sets out the facts with enough 
specific informtion to indicate that fraud is probably involved, DICS imediately refers the 
case to 01. 
If there is enough information in the letter or cal from the beneficiar, DICS 
wil attempt to 
locate Social Securty Numbers and Master Beneficiar Record or Supplementa Securty 
Record records for the individual(s) being reported. Based on these records along with the 
information supplied by the correspondent, DICS wil either dispose of the case as "no action 
necessar" (e.g., it turs out that the person reported as not disabled but receiving benefits has 
never received disabilty benefits), or wil refer it to the appropriate component for further 
development It is sometimes determned with a phone call to a component that a case can be 
closed, but in a majority of cases, a referral to an SSA component is made for case 
development. 
If an SSI situation is involved, the case is referred for action diectly to the servicing field 
offce. If it is a disabilty case, it is referred to the Integrty Section in the Offce of Disabilty 
Operations (ODO). If the case involves a Social Securty Number problem, it is referred back 
to 01. Additionaly, there  350 Distrct Offices, six program service centers, or the Offce 
are 1 
of Central Records Operations where the case might be referred. 
In October 1987, SSA Central Office developed guidelines to institute a more standardized 
handling of hotline cases thoughout SSA. The guidelines consist of highly detailed 
instrctions on how DICS and the components should respond to the public and better handle 
the cases. The guidelines also instrct the components how and where to refer cases for
crinal 
investigation. If a component finds evidence of fraud, the component sends the case 
diectly to 01.
 Public Health Service

The Offce of Resource Management (ORM) within PHS receives DHHS Hotline cases. 
Once received by ORM, the cases are sent to one of ten PHS agencies. Each case is logged in 
and stored on a computer with the 01 control number and the date the case was referred to an 
agency. A due date of 45 days past the received date is assigned to the case. When the case is 
closed, the date closed is added to the log along with a brief description of the case and its 
disposition. 
The agencies respond back to ORM with a memorandum or an investigative report. When 
final cases come back to Central Offce, they perform a qualitative review to ensure that the 
agencies have adequately handled all allegations. If a porton of the case is incomplete, it is 
sent back to the agency or the agency is required to issue a supplemental report to Central 
Office. The PHS Central Offce, not the agency, maes the determnation if a case should be 
referred to 01 for investigation. 
Completed fIes are maitained in PHS Central Offce. They contai the original 01 case, 
transmittal memorandum sending the case to the agencies, the agency response, and the 
Central Offce closing memorandum. 
The PHS report it would handle LTR-22s the same as LTR-21s. 
Family Support Administration 
Practically all of DHHS Hotline cases sent to FSA involve welfare fraud, and are handled by 
the Offce of Famly Assistance (OFA) within FSA. The OFA maintans a paper control log 
indicating which of the ten ROs each case was sent to, the 
beneficiar name, and 01 case 
control number. A cover memoradum is sent along with the case to the RO requesting a 60 
day response time on each case. 
When the ROs receive 01 cases from OFA, they send them out to State welfare offices for 
development. The ROs place a 60 day control on the cases sent to the State, but it usually 
takes longer than 60 days to complete a case and respond back to the RO with a fmal report. 
Some ROs receive interim reports on the cases. 
Once a case is completed, the RO sends a memorandum to the Central Offce (OFA) detaiing 
the action taken on the case. Often complaints ar not substantiated, in which case the Central 
Offce is notified by a phone call. If evidence of welfar fraud or misuse of funds is found, 
the ROs refer the case to an 01 field offce for investigation. 
When OFA receives the final disposition on a case, they review the initial referral and the 
response for completeness, and then close out the case on the log. The OFA has never had to 
send a case back to the ROs for additional work. Completed copies of 01 case files are kept 
for several years; fIes exist back to about 1986. 
C- 3
 The OFA report it would not handle LTR-22 cases any differently from LTR-21 Hotline cases. 
Office of Human Development Services 
The OHDS records all incomig DHHS Hotline cases on a computer fie with the 01 control 
number, beneficiar/complainant name, and unit the case is assigned to. Each case is given a 
cover memoradum and a two week due date. Most of the cases are handled in the Central 
Offce. 
progrs 
Some cases are forwarded to one of the  within OHDS to be developed. Control 
over cases sent out is still maintaned by Central Offce with a due date. If a program 
component determnes that a case should be forwarded to 01, it wil send the case to Central 
Office for referral to 01. 
When a case is completed, the components respond back in wrting, and Central Offce 
conducts a qualitative review to ensure that the case has been handled properly. 
The OHDS reports it would not handle LTR-21 and LTR-22 cases any differently. 
C - 4
 APPENDIX D

OPDIV COMMENTS

D 
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Health Care 
DEPARTMENT OF HEALTH  HUMAN SERVICES  Financing Administration 
Memorandum 
Date OCT I 6 . 1990 
From AGai dR. Wtrileanskty,o Phr.D . (\,. '\
tV-
Subject OIG Draf Report: ''Hotle Referral Follow- " (OEI-12-9001060) 
C"
The Inpector General  Ci "" 
,. a m
Offce of The Secreta  ex 2: "" 
f8 :z 

Jir; 
focuses on the controls and gude
We have reviewed thi draf report which  hotle ;; 
Inpector Genera (OIG) 
governg HCFA follow-up to Offce of the 
extig 
referral. The report concludes that  HCF A centr and regiona offce eX 
contrbute to untiely responses to 
controls and gudelies are inufcient and 
that HCFA control caes sent to the regional offces by 
referr. OIG recommends  centr 
requirg the regions to respond withi a specifc tieframe and that HCF A 
hadlg  referr. 
of the 
offce  minimum gudelies for regional offce 
establish 
s fidigs and have addressed the specic 
We concur with OIG' 
opportty 
We appreciate the  to review thi 
recommendations in the attachment. 
draf  advie us if you concur with our position on the report 
report. Please 
recommendations at your earliest convenience. 
Attchment 
PDIG 
DIG
DIG
DIG
AIG-
OGC/IG 
EX SEC
 J OIl'!
DATE 
SE 
:::i  ..  -,, .. ,,)- " , -. . .., '''.''..,.. 
h" '"  ,,C/' 
Comments of the Health Care Financing Administration ( 
on the OIG Draft Report - '
Hotline Referral Follow-up 
OEI-12-90-01060 
OIG Recommendation Number 
HCF A Central Offce should control cases sent out to the Regional Offces (ROs)

requig 
by  the regions to respond withi a specifc tieframe on the disposition of 
al caes.

HCF A Response  AGREE 
Based on the results of an internal study of this function, 
HCF A has implemented 
procedures requirig the ROs to acknowledge receipt of cases from CO withi 
10 days. ROs are required to provide a status of disposition for each cae to 
withi 45 days of receipt of the referral. CO staf curently maitai a control 
system to track and measure the 
tieliess of RO responses. 
OIG Recommendation Number 2: 
HCF A Central Offce should develop minimum guidelines for regional handlig of 
Hotline cases. Guidelines should include requiring the regions to have a uniorm 
minimum set of controls on all cases that they send 
out to the contractors as well 
as the ones they handle at the regional offce 
level, and to maintain the Offce of 
Investigations control number on a 
log system. 
HCF A Response  AGREE 
We concur and will develop uniform RO 
guidelines.  "( , ''
  --  ""...  "
"'V  lS. 
DEPARTMENT OF HEALTH  lfVCcfS  Social Securitx Administration 
&. HUMAN 
Memorandum 
:."'''dJa  Refer to: 
. S

Date: 
From: 
C mmission  cial Security 
"Hotline Referral 
Subject:  ffice of Inspector General Draft Report,
Follow-Up" (OEI-12-90-01060) --INFORMTION 
To:  Mr. Richard P. Kusserow 
Inspector General

report. 
Attached is the response to your draft  If we can be of

further assistance, please let us know.

Attachment: 
SSA response

c:; 
G) 01 rn

iJ 0 
.. m 
IG 
8:: 
U) c:

PDIG 
DIG- r(nJ\. 
AS 
DIG-
DIG-MQI  Y - ;:J 
AIG-
OGC /IG 
EX SEe: 
DAn  ADMINISTRTION ON THE OFFICE OF 
COMMENTS OF THE SOCIAL SECURITY 
REFERRL FOLLOW-UP" 
INSPECTOR GENERAL DRAFT REPORT. "HOTLINE 
(OEI-12-90-01060) 
Office of Inspector General (OIG) Recommendation

The Social Security Administration (SSA) should adhere to its

systems of controls. While SSA has an established system in

place to control LTR-22 cases, this system should be fully

utilized. 
Whatever time frames are used should be adhered to and 
treated as a serious due date for an interim or final response

from their components. SSA and its components should record and

maintain the Office of Investigations (OI) case number.

SSA Comment

We concur. We will include in all future referrals to components

a statement addressing the seriousness of the controls and the

need for timely development and response to the SSA Systems

Securi ty Officer. We will also send out reminders to every

follow-up. 
component regarding the required timeframes for 
Concerning the use of the OI case number, we were already

recording and maintaining the OI case number on all referrals

when the inspection was performed.
 Ofice of 
Human Development Services 
Asistant Secretary

Washington DC 20201-01 
TO:  Richard P. Kusserow 
Inspector General

FROM:  Assistant Secretary 
for Human Development Services

SUBJECT:  Comments on Draft Report: "Hotline Referral Follow-Up,
OEI-12-90-01060 
Thank you for the opportunity to review the draft report titled

"Hotline Referral Follow-Up.  We note that the report describes

the control system established by the Office of Human Development

Services 
(HDS) for tracking the Hotline cases we currently 
recei ve 

Until now, HDS has only received cases where a memorandum is

required to be sent back to your off 
ice wi thin 60 days explaining
actions taken on the case (so-
called LTR-21 cases). When HDS 
begins to receive cases where no further contact with your office

is required (LTR-22 cases), please be assured that we will

maintain these cases under the same control system we now use for

LTR-21 cases. 
If you have any questions or need further information
, please

contact David Bunoski , Acting Director of the HDS Executive

Secretariat 
24S-31760
, on 

fli 
Gall 
Mary  . ,.' ;.  ..  .-.   ',;.-  j.. - -- .- -" '-'-' --'' '-.-  .- -.  .-  .-.  .-"- "-' --.  -.
DEPARTMENT OF HEALTH AND HUMAN SERVICES 
190
SE 2 I 

Assistant Secretary for Health

up, 
OIG Draft Report Hotline Referral Follow-
OEI-12-90-01060 
Inspector General , as

his i s to p r 0 v ide 0 u r co mm en t s  on the sub j e c t a I G d r aft 
inspection report. The draft report examines the procedures

employed by each Operating Division within HHS in processing the

Department  s Hotline referrals which do not require a response 
OIG (called LTR-22s). 
Although PHS did not receive any LTR-22 hotline referrals during

the )-month period studied by OIG, we reported to your staff that 
we would handle the LTR-22 hotline referrerfaelrsr ainl st.h e same manner

in which we handle the LTR-21 hotline  The LTR-21 
hotline referrals require PHS  on the actions

to report to  OIC
taken to address the allegations contained in the hotline

referrals. 
e 0 n cur wit h the d r aft r e po r t ' s r e co mm end a t ion t hat w hen PHS 
begins to receive LTR-22 cases, that we include them in the same

cases 
control system currently used for the LTR-21  so that we may 
track their resolution and implementation of corrective action

as appropriate.

received six 
Since the completion of the OIG study, we have 
resolved. 
LTR-22 hotline referrals. Two of the six have been 
These referrals have been  anner as those

totre atOed inI Gthe s.am e  the 
which require a response  They have been logged into 
PHS Hotline Control System , a timeframe of 45 days was

established for their resolution , and the file includes or will

include a brief description of the hotline referral and its

disposition. 
" eJ.J i: 
James O. Hason , H.  Dr. 
c c : 
E S / P liS

ASH 
01- , Rm. 17-2'5, Parkla..,n 
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*U. S. GOVERNMENT PRINTING OFFICE: 1989-622' 581