U.S. Department of Health and Human Services
Office of Inspector General 
 
Michigan Medicaid Fraud
Control Unit: 2021 Review 
 
   
Suzanne Murrin 
Deputy Inspector General 
for Evaluation and Inspections
September 2022, OEI-06-21-00270   U.S. Department of Health and Human Services 
 
Office of Inspector General
Report in Brief
September  2022, OEI-06-21-00270 
Unit Case Outcomes  Michigan Medicaid Fraud Control Unit: 2021
Federal fiscal years (FYs) 
Review 
20182020  
  55 indictments 
What OIG Found 
  53 convictions  
OIGs review of the Michigan MFCUs performance and operations  found 
  58 civil settlements and 
that  the Unit reported strong case outcomes for FYs 20182020, with 
judgments
over $47 million in combined criminal and civil recoveries. 
  $47.2 million in recoveries  
Our review, however, identified several operational challenges that 
Unit Snapshot 
warrant further attention.  We made nine findings for  which we are 
The Michigan Medicaid Fraud 
making recommendations to improve the Units adherence to the MFCU 
Control Unit (MFCU or Unit) is 
performance standards:   
located within the Michigan 
Attorney Generals Office in East  1.   The Unit received few fraud referrals from the State Medicaid agency, 
Lansing. At the time of our  and despite the Unit taking steps to increase these referrals, they 
onsite review in September 2021,  remained low. 
the Unit had a total  of  31 staff 
(including 3 staff who worked  2.   The Department of Attorney General repeatedly submitted the 
remotely from Detroit).  MFCUs financial reports late, lacked support for some MFCU 
expenditures, and lacked accounting procedures, raising concerns  
Why OIG Did This Review about the MFCUs fiscal controls.  
The Office of Inspector General 
3.   Despite the Units request for additional resources to increase its 
(OIG) administers the MFCU 
staffing levels, Unit staffing remained constant and did not align with  
grant awards, annually recertifies 
the growing Medicaid expenditures.  
each Unit, and oversees the 
Units performance in 
4.   Although the Unit coordinated with  Federal partners, it worked few 
accordance with the  
joint cases with them, missing opportunities for sharing resources 
requirements of the grant.  As  
and training.   
part of this oversight, OIG 
conducts periodic reviews of  5.   The Unit did not always report convictions or adverse actions to 
Units and issues public reports of  Federal partners within the appropriate timeframes. 
its findings. 
6.   Sixty-two percent  of the Units case files lacked documentation  of 
The primary purpose of this  periodic supervisory reviews. 
review was to examine three 
7.   Although  the  Unit maintained an annual training  plan for its staff, 
areas of concern that we 
Unit supervisors did not consistently track or verify that staff 
identified during our ongoing 
documented their training.   
administration and oversight 
activities of the Michigan MFCU: 
8.   The Units case management system made it difficult for Unit staff to 
(1) the number of fraud referrals 
retrieve case information and performance data.  
from the State Medicaid agency, 
(2) the Units fiscal controls, and  9.   The Units memorandum of understanding (MOU) with the State 
(3) the Units staffing levels.  As  Medicaid agency did not reflect current practice or law.  
part of this review, we also 
   
examined the Units performance 
and operations.   
   
Report in Brief continued
Report No OEI-06-21-00270  
What OIG Recommends 
To address the findings and further improve Unit  operations,  
we recommend that  the Unit:   
1.   Build upon its efforts to increase fraud referrals from the State 
Medicaid agency.  
2.   Refund the Federal grant for unsupported expenditures and establish 
processes to ensure Unit involvement and oversight of fiscal controls  
and reporting.  
3.   Assess the adequacy of existing staffing  levels and, if appropriate, 
develop a plan to expand the size of the Unit.  
4.   Seek opportunities, as appropriate, to investigate more joint cases 
with Federal partners.  
5.   Develop and implement processes to ensure that all convictions and 
adverse actions are reported to Federal partners within the 
appropriate timeframes. 
6.   Ensure that supervisory reviews of case files are documented in 
accordance with Unit policy. 
7.   Ensure that Unit supervisors track and verify that all staff in 
professional disciplines document  their training.   
8.   Implement a new, comprehensive case management system that 
allows for efficient access to case documents and information.  
9.   Revise its MOU with the State Medicaid agency to reflect current 
practice and law.  
The Unit concurred with all nine recommendations.  
   
TABLE OF CONTENTS 
 
 
BACKGROUND................................................................................................................................................ 1  
CASE OUTCOMES .......................................................................................................................................... 7  
FINDINGS......................................................................................................................................................... 8  
The Unit received few fraud referrals from the State Medicaid agency, and despite the Unit taking 
steps to increase these referrals, they remained low .................................................................................................. 8  
The Department of Attorney General repeatedly submitted the MFCUs financial reports late, lacked 
support for some MFCU expenditures, and lacked accounting procedures, raising concerns about the 
MFCUs fiscal controls ........................................................................................................................................................... 10  
Despite the Units request for additional resources to increase its staffing levels, Unit staffing 
remained constant and did not align with the growing Medicaid expenditures ...........................................12  
Although the Unit coordinated with Federal partners, it worked few joint cases with them, missing 
opportunities for sharing resources and training ....................................................................................................... 13  
The Unit did not always report convictions or adverse actions to Federal partners within the 
appropriate timeframes ........................................................................................................................................................ 14  
Sixty-two percent of the Units case files lacked documentation of periodic supervisory reviews .........16  
Although the Unit maintained an annual training plan for its staff, Unit supervisors did not 
consistently track or verify that staff documented their training ......................................................................... 17  
The Units case management system made it difficult  for Unit staff to retrieve case information and 
performance data ................................................................................................................................................................... 18  
The Units MOU with the State Medicaid agency did not reflect current practice or law. ..........................19  
CONCLUSION AND RECOMMENDATIONS.......................................................................................... 20  
Build upon its efforts to increase fraud referrals from the State Medicaid agency .......................................21  
Refund the Federal grant for unsupported expenditures and establish processes to ensure Unit 
involvement and oversight of its fiscal controls and reporting ............................................................................. 21  
Assess the adequacy of existing staffing levels and, if appropriate, develop a plan to expand the size 
of the Unit.................................................................................................................................................................................. 22  
Seek opportunities, as appropriate, to investigate more joint cases with Federal partners ......................22  
Develop and implement processes to ensure that all convictions and adverse actions are reported to 
Federal partners within the appropriate timeframes................................................................................................. 22  
Ensure that supervisory reviews of case files are documented in accordance with Unit policy ...............23  
   
Ensure that Unit supervisors track and verify that all staff in professional disciplines document their 
training........................................................................................................................................................................................ 23  
Implement a new, comprehensive case management system that allows for efficient access to case 
documents and information............................................................................................................................................... 23  
Revise its MOU with the State Medicaid agency to reflect current practice and law ...................................23  
UNIT COMMENTS AND OIG RESPONSE ............................................................................................... 24  
PERFORMANCE ASSESSMENT................................................................................................................ 26  
APPENDICES................................................................................................................................................. 32  
Appendix A: Unit Referrals by Source for Fiscal Years 20182020 ....................................................................... 32  
Appendix B: Detailed Methodology ................................................................................................................................. 33  
Appendix C: Point Estimates and 95-Percent Confidence Intervals of Case File Reviews ...........................36  
Appendix D: Unit Comments .............................................................................................................................................. 37  
ACKNOWLEDGMENTS AND CONTACT ................................................................................................ 42  
Acknowledgments.................................................................................................................................................................. 42  
Contact........................................................................................................................................................................................ 42  
ABOUT THE OFFICE OF INSPECTOR GENERAL. ................................................................................... 43  
 
 
   
BACKGROUND 
OBJECTIVES 
1.   To examine three previously identified areas of concern related to fraud 
referrals, fiscal controls, and staffing levels of the Michigan Medicaid Fraud 
Control Unit (MFCU or Unit). 
2.   To examine the Units performance and operations.  
 
Medicaid Fraud Control Units 
MFCUs investigate (1) Medicaid provider fraud and (2) patient abuse or neglect in 
facility settings and prosecute those cases under State law or refer them to other 
prosecuting offices.1, 2, 3  Under the Social Security Act (SSA), a MFCU must be a 
single, identifiable entity of State government, separate and distinct from the State 
Medicaid agency, and employ one or more investigators, attorneys, and auditors.4   
Each State must operate a MFCU or receive a waiver.5 Currently, 50 States, the District
of Columbia, Puerto Rico, and the U.S. Virgin Islands operate MFCUs.6    
MFCUs are funded jointly by Federal and State Governments. Each Unit receives a 
Federal grant award equivalent to 90 percent of total expenditures for new Units and 
75 percent for all other Units.7 In Federal fiscal year (FY) 2021, combined Federal and
State expenditures for the MFCUs totaled approximately $314 million, of which 
approximately $235.5 million represented Federal funds.8    
_____________________________________________________________________________________________________________________________  
1 SSA  1903(q)(3). Regulations at 42 CFR  1007.11(b)(1) clarify that a Units responsibilities include the 
review of complaints of misappropriation of patients private funds in health care facilities.  
2 As of December 27, 2020, MFCUs may also receive Federal financial participation to investigate and 
prosecute abuse or neglect of Medicaid beneficiaries in a noninstitutional or other setting. Consolidated 
Appropriations Act, 2021, Public Law 116-260, Division CC, Section 207. 
3 References to State in this report refer to the States, the District of Columbia, and the U.S. territories. 
4 SSA  1903(q). 
5 SSA  1902(a)(61). 
6 The territories of American Samoa, Guam, and the Northern Mariana Islands have not established Units.  
7 SSA  1903(a)(6). For a Units first 3 years of operation, the Federal Government contributes 90 percent 
of funding, and the State contributes 10 percent.  Thereafter, the Federal Government contributes  
75 percent, and the State contributes 25 percent. 
8 OIG analysis of MFCUs reporting of expenditures for FY 2021.  Unless stated otherwise, all FYs are 
October 1 through September 30. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Background | 1     
OIG Grant Administration and Oversight of MFCUs 
The Office of Inspector General (OIG) administers the grant award to each Unit and 
provides oversight of Units.9, 10  As part of its oversight, OIG conducts a desk review of 
each Unit during the annual recertification process.  OIG also conducts periodic 
inspections and reviews. Finally, OIG provides ongoing training and technical support 
to the Units. 
In its annual recertification review, OIG examines the Units reapplication materials, 
case statistics, and questionnaire responses from Unit stakeholders.  Through the
recertification review, OIG assesses a Units performance, as measured by the 
Units adherence to published performance standards;11 the Units compliance
with applicable laws, regulations, and OIG policy transmittals;12 and the Units 
case outcomes. 
OIG further assesses Unit performance by conducting inspections and reviews of 
selected Units. These inspections and reviews result in public reports of findings and 
recommendations for improvement.  In these reports, OIG may also provide 
observations regarding Unit operations and practices, including beneficial practices 
that may be useful to share with other Units.  OIG also provides training and technical 
assistance to Units, as appropriate, during inspections and reviews. 
Michigan MFCU 
The Michigan MFCU, also known as the Healthcare Fraud Division, is located within 
the Michigan Department of Attorney General in East Lansing.  The Office of Fiscal 
Management within the Department of Attorney General administers the MFCUs 
accounting and other fiscal functions. At the time of our onsite review in September 
2021, the Unit had 31 employees14 investigators (including 3 supervisory 
investigators and 1 chief investigator), 8 attorneys (including the MFCU director and 
deputy director), 1 analyst, 1 auditor, and 7 support staff.13  During our review period 
of FYs 20182020, the Unit spent approximately $16.2 million in Federal and State 
funds. To fulfill the States obligation  to provide a 25-percent share of the MFCU 
grant funding (amounting to approximately $4 million), the Unit used proceeds from 
MFCU cases that were allocated to a designated fund for this purpose. 
_____________________________________________________________________________________________________________________________  
9 As part of grant administration, OIG receives and examines financial information from Units, such as 
budgets and quarterly and final Federal Financial Reports that detail MFCU income and expenditures.  
10 The SSA authorizes the Secretary of Health and Human Services to award grants (SSA  1903(a)(6)) and 
to certify and annually recertify the Units (SSA  1903(q)).  The Secretary delegated these authorities to 
OIG in 1979. 
11 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012).  The performance
standards were developed by OIG in conjunction with the MFCUs and were  originally published at 
59 Fed. Reg. 49080 (September 26, 1994). 
12 OIG occasionally issues policy transmittals to provide guidance and instruction to MFCUs.  Policy
transmittals are located at https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/index.asp. 
13 Three Unit attorneys reported to the office in  East Lansing and worked remotely from Detroit.  
Michigan Medicaid Fraud Control Unit: 2021 Review   
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Referrals  
During FYs 20182020, the Unit reported receiving fraud and patient abuse or neglect 
referrals from several sources, including private citizens and the Michigan Department 
of Licensing and Regulatory Affairs (the State Survey and Certification agency), among 
other sources.14, 15  See Appendix A for a list of Unit referrals by source for  
FYs 20182020.  
When the Unit receives a referral of fraud or patient abuse or neglect, an assigned 
investigator determines whether the referral has merit and falls within the Units 
jurisdiction to open it as an investigation.  If the investigator determines that the 
referral has merit and is within the Units jurisdiction, the investigator presents the 
referral to the Units intake committee for approval.16  If the investigator determines 
that the referral does not have merit and/or is outside of the Units jurisdiction, the 
investigator presents it to the chief investigator to decline.  When a referral is 
declined, the Unit closes the referral and either refers it to another agency or sends it 
back to the referring agency. 
Investigations and Prosecutions 
Once the Unit accepts a referral, the intake committee, which includes the chief 
investigator, assigns an investigative team to the case.  The investigative team
consists of an investigator, at least one attorney, and a supervisory investigator.17 The 
investigative team develops and completes an investigative plan, which outlines and 
assigns key investigative tasks to the team members.  The team meets regularly to 
provide updates and discuss whether any additional steps are needed.  The 
supervisory investigator also reviews each open investigation every 90 days to ensure 
that cases are progressing. Upon completion of  the investigation as outlined in the 
plan, the Unit attorney assigned to the investigative team determines if there is 
sufficient evidence to support either civil or criminal prosecution and forwards a 
recommendation to the Unit director on how to proceed.  
_____________________________________________________________________________________________________________________________  
14 The States Survey and Certification agency is responsible for licensing and Federal certification 
regulatory duties, including accepting and processing complaints for more than 20 provider types in 
Michigan.  Michigan Department of Licensing and Regulatory Affairs,  Agency Contacts  Community and 
Health Systems. Accessed at https://www.michigan.gov/lara/0,4601,7-154-76106-42245--,00.html on 
January 24, 2022. 
15 In addition to referrals from external sources, in 2013 OIG approved the Michigan MFCU to engage in 
data mining, which allows the Unit to self-identify fraud referrals through analysis of Medicaid claims 
data. Data mining is defined as the practice of electronically sorting Medicaid or other relevant data, 
including but not limited to, the use of statistical models and intelligent technologies to uncover patterns 
and relationships within that data to identify aberrant utilization, billing, or other practices that are 
potentially fraudulent.  42 CFR  1007.1.  
16 At the time of our onsite review in September 2021, the Units intake committee consisted of the 
deputy director, the chief investigator, 2 attorneys,  2 supervisory investigators, 1 analyst, and 3 support 
staff. 
17 The Units analyst may also help the investigative team.  
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Background | 3     
Michigan Medicaid Program 
The Michigan Department of Health and Human Services (MDHHS) administers the 
Michigan Medicaid program, which includes the States Medicaid fee-for-service and 
managed care health care delivery systems.18  In FY 2020, the program served  
2.6 million beneficiaries and total program expenditures were $19.8 billion.19, 20   
During FYs 20182020, the State of Michigan had 10 Medicaid managed care 
organizations (MCOs), which provided health care services to approximately  
75 percent of the States Medicaid beneficiaries.21, 22 
Medicaid Program Integrity 
MDHHS-Office of Inspector General (MDHHS-OIG)the States program integrity 
unitand the States MCOs share primary responsibility for Medicaid program 
integrity efforts in Michigan.23, 24  Under the managed care system, MDHHS contracts 
with the MCOs to process, pay, and monitor claims of providers in the MCOs 
networks. Each MCO has a Special Investigative Unit that identifies and investigates 
potential fraud and abuse in its network and refers suspected allegations of provider 
fraud or patient abuse or neglect simultaneously to MDHHS-OIG and the MFCU.25   
MDHHS-OIG also conducts its own administrative investigations on referrals received, 
including those from MCOs, and, after determining that the allegations are credible, 
refers the suspected fraudulent activity to the MFCU.  The MFCU reviews all referrals 
_____________________________________________________________________________________________________________________________  
18 MDHHS, Michigan  Medicaid Program.  Accessed at https://www.michigan.gov/mdhhs/assistance-
programs/medicaid/portalhome on April 23, 2022. 
19 The Centers for Medicare & Medicaid Services (CMS),  Medicaid Managed Care Enrollment and 
Program Characteristics, 2020, p. 17. Accessed at https://www.medicaid.gov/medicaid/managed-
care/downloads/2020-medicaid-managed-care-enrollment-report.pdf on April 23, 2022. 
 
20 OIG, MFCU Statistical Data for FY 2020.  Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-
units-mfcu/expenditures_statistics/fy2020-statistical-chart.pdf on January 24, 2022. 
21 The 10 Medicaid MCOs in Michigan are Aetna Better Health, Blue Cross Complete, HAP Empowered, 
McLaren, Meridian, Molina Healthcare, Priority Health Choice, Total Health  Care, United Healthcare 
Community Plan, and Upper Peninsula.  CMS, op. cit., pp. 74-81. 
22 In July 2020, 1,927,140 Medicaid beneficiaries in Michigan were enrolled  in MCOs out of the total of 
2,573,851 Medicaid beneficiaries in the State. Ibid. 
23 MDHHS, The Office of Inspector General  Integrity Division. Accessed at 
https://www.michigan.gov/mdhhs/0,5885,7-339-73970_93787_94352_94355_94416_94427---,00.html 
on January 24, 2022. 
24 MDHHS-OIG has three divisions that are responsible for (1) investigating Medicaid fraud; 
(2) investigating welfare fraud (e.g., fraud related to food assistance programs); and (3) providing 
investigative and administrative support to the agency.  MDHHS, The Office of Inspector General  About 
Us. Accessed at  https://www.michigan.gov/mdhhs/0,5885,7-339-73970_93787_94352---,00.html on 
March 4, 2022. 
25 MCOs began to send referrals simultaneously to MDHHS-OIG and the MFCU after the MFCU 
requested to be copied on all referrals to MDHHS-OIG in June 2018.  Prior to this, MCOs sent referrals to 
MDHHS-OIG, and MDHHS-OIG then determined  which referrals to send to the MFCU. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Background | 4     
from MDHHS-OIG and the MCOs to determine whether to open them 
as investigations and notifies these two agencies in writing of its determination.  
Previous OIG Reports and Oversight 
OIG conducted a previous onsite review of the Michigan Unit in 2013.26 In that 
review, OIG found that 21 percent of case files lacked documentation of supervisory 
approval to open cases and 67 percent of cases lacked documentation of periodic 
supervisory reviews.  In addition, the Unit did not refer 69 percent of sentenced 
individuals to OIG for program exclusion within an appropriate timeframe.  OIG also 
found that the Unit had not updated its policies and procedures manual to reflect 
current Unit operations, including its memorandum of understanding (MOU) with the 
State Medicaid agency. 
On the basis of these findings, OIG recommended that the Unit (1) ensure that 
supervisory approval to open cases and periodic supervisory reviews are documented 
in Unit case files; (2) ensure that it refers individuals for exclusion to OIG within an 
appropriate timeframe; (3) revise its policies and procedures manual to reflect current 
Unit operations; and (4) revise its MOU with the State Medicaid agency to reflect 
current law and practice. The Unit concurred with the four recommendations and, 
based on the information received from the Unit, OIG considered the 
recommendations implemented as of November 2015.  
Methodology 
We conducted an onsite review of the Michigan Unit in September 2021. The review 
team consisted of OIG evaluators, OIG agents, OIG auditors, and a chief investigator 
from another State MFCU.  Our review covered the 3-year period of FYs 20182020.  
The primary purpose of this review was to examine three previously identified areas of 
concern related to fraud referrals, fiscal controls, and staffing levels.  We identified 
these areas of concern through our ongoing oversight of the Unit during the review 
period. As part of this onsite review, we also examined the Units operations and 
adherence to the 12 MFCU performance standards and applicable Federal laws, 
regulations, and policy transmittals.  In examining the Units operations and 
performance, we applied the published MFCU performance standards listed in the 
Performance Assessment on page 26.  We did not assess adherence to every 
performance indicator for every standard. 
We based our review on an analysis of data from seven sources: (1) Unit 
documentation, such as policies and procedures; (2) financial documentation;  
(3) structured interviews with key stakeholders; (4) structured interviews with the 
Units managers and selected staff; (5) review of a random sample of case files that 
were open at any point during the review period; (6) review of all convictions 
submitted to OIG for program exclusion and all adverse actions submitted to the 
_____________________________________________________________________________________________________________________________  
26 OIG, Michigan State Medicaid Fraud Control Unit: 2013 Onsite Review, OEI-09-13-00070, January 2014. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Background | 5     
National Practitioner Data Bank (NPDB) during the review period; and (7) onsite 
review of Unit operations.  See Appendix B for a detailed methodology.   
Standards 
We conducted this study in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency.  
These inspections differ from other OIG evaluations in that they support OIGs direct 
administration of the MFCU grant program, but they are subject to the same internal 
quality controls as other OIG evaluations, including internal and external peer review. 
 
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
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CASE OUTCOMES 
The Michigan Unit reported 55 indictments, 53 convictions, and 59 civil 
settlements and judgments for FYs 20182020.27 The Unit reported strong case
outcomes that involved a broad number of provider types.  The Units caseload also  
included a good balance of criminal and civil cases as well as fraud and patient abuse 
or neglect cases. Of the Units 53 convictions, 30 involved provider fraud and 
23 involved patient abuse or neglect.  For more information, see Performance 
Standard 6 on page 28 in the Performance Assessment.   
55 
~  INDICTMENTS 
/ . ~  
53 
CONVICTIONS 
59  SETTLEMENTS 
& JUDGMENTS 
 
The Unit reported $47.6 million in total recoveries for FYs 20182020. Of the 
Units total recoveries, global civil recoveries represented approximately $41.5 
million.28  
Total Recoveries   
$47,566,804 
 
Nonglobal Civil 
$2,066,408 
50 
Criminal 
40  $3,964,536 
CV' )  30 
0 
2  20 
Global Civil 
10  $41,535,860 
0 
---------.1 
Source: OIG analysis of Unit statistical data, FYs 20182020.  
_____________________________________________________________________________________________________________________________  
27 OIG provides information on MFCU operations and outcomes, but does not direct or encourage 
MFCUs to investigate or prosecute a specific number of cases.  MFCU investigators and prosecutors 
should apply professional judgement and discretion in determining what cases to pursue.  
28 Global civil recoveries derive from civil settlements or judgments in global cases, which are cases that 
involve the U.S. Department of Justice and a group of State MFCUs and are facilitated by the National 
Association of Medicaid Fraud Control Units.  
Michigan Medicaid Fraud Control Unit: 2021 Review   
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FINDINGS 
Our review examined three previously identified areas of concern related to the 
Michigan MFCUs fraud referrals, fiscal controls, and staffing levels; and assessed the 
Units adherence to the MFCU performance standards.  We made nine findings
regarding the Units adherence to the standardsincluding three findings that were 
also identified in OIGs 2013 onsite reviewand for which we are issuing 
recommendations.  Despite identifying several operational challenges that warrant 
further attention, we found that the Unit had strong case outcomes for FYs 2018
2020. See the Performance Assessment on page 26 for our full assessment of the 
Units adherence to all 12 MFCU performance standards, including other observations 
of Unit operations and practices.  
The Unit received few fraud referrals from the State Medicaid 
agency, and despite the Unit taking steps to increase these referrals, 
they remained low 
During FYs 20182020, the Michigan MFCU received a total of 2,148 fraud referrals, 
but only 4 originated from MDHHS-OIG.  OIG found the number of referrals that the 
Unit received from MDHHS-OIG to be very low compared to the number of referrals 
that similarly sized MFCUs received from State Medicaid program integrity units.  For 
the similarly sized MFCUs, these referrals ranged from 28 to 236 during the same  
3-year period.29  Appendix A identifies the Michigan MFCUs referrals, by source, 
during FYs 20182020.  
The Michigan MFCUs low number of fraud referrals is concerning because MFCUs 
investigate and prosecute fraud largely on the basis of actionable referrals from the 
State Medicaid program integrity units.30  MDHHS-OIG should be a consistent fraud 
referral source for the MFCU, given that it has access to Medicaid claims data and has 
the responsibility to identify and refer potential fraud cases to the MFCU.  
_____________________________________________________________________________________________________________________________  
29 We compared the Michigan MFCU, which had 31 staff in FY 2020, to similarly sized MFCUs, such 
as those with staff sizes that ranged from 21 to 39 employees.  Although comparison across similarly 
sized MFCUs provides context for the case outcomes of a particular MFCU, many factors other than the 
size of a MFCUs staff can affect case outcomes. 
30 In accordance with 42 CFR  455.23, State Medicaid agencies must refer all credible allegations of fraud 
to the respective MFCUs. CMS regulations define credible allegation of fraud at 42 CFR  455.2 as an 
allegation that has been verified by the State from any source, including but not limited to the following:  
(1) Fraud hotline tips verified by  further evidence. (2) Claims data mining. (3) Patterns identified through 
provider audits, civil false claims cases, and law enforcement investigations.  Allegations are considered 
to be credible when they have indicia of reliability and the Medicaid agency has reviewed all allegations, 
facts, and evidence carefully and acts judiciously on a case-by-case basis. 
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A total of four fraud referrals from MDHHS-OIG  during our 3-year review period likely 
underrepresents potential Medicaid provider fraud in the State of Michigan.  
Michigans Medicaid program is 1 of the 10 largest Medicaid programs in the United 
States, and the U.S. Department of Justice established Detroit as a Health Care Fraud 
Strike Force city in 2010 because advanced data  analysis identified the city as a hot 
spot with high levels of billing fraud.31  
The Unit took several steps to help increase the number of fraud 
referrals from MDHHS-OIG  
Over the course of our review period, the Unit established bimonthly meetings with 
MDHHS-OIG, provided and attended trainings between the two agencies, and 
improved the timeliness of its investigations in an effort to increase the number of 
fraud referrals from MDHHS-OIG.  These steps hold promise to increase the number 
of fraud referrals from MDHHS-OIG. 
Established Bimonthly Meetings.   In FY 2020, the Unit established a schedule of 
bimonthly meetings with MDHHS-OIG to communicate the status of MDHHS-OIGs 
referrals that were accepted for investigation and to 
discuss potential future referrals.  These meetings 
Performance Standard 4:  
were initiated in response to a previous concern  The Unit takes steps to 
raised by MDHHS-OIGs investigative staff that the  maintain an adequate volume 
Unit did not regularly provide them status updates  and quality of referrals from  
on accepted referrals. MDHHS-OIG reported an  the State Medicaid agency 
improvement in proactive updates as a result of  and other sources.  
these meetings.   
Provided and Attended Trainings.   The Unit provided MDHHS-OIG one training 
every year during our review period.  Examples of training included a presentation on 
the False Claims Act and a litigation simulation, which MDHHS-OIG officials reported
was well-received.  Additionally, MFCU staff attended two MDHHS-OIG trainings
during our review period. Both agencies reported that they plan to organize future 
trainings and opportunities to share knowledge and operational insights about each 
others agencies.  
Improved Timeliness of Its Investigations.  The Unit improved the timeliness of its 
investigations, making a focused effort to resolve or close aging cases.  We found that 
the number of cases open longer than 3 years decreased by 37 percent during 
FYs 20182020.  This improvement addressed a previous concern raised by MDHHS-
OIG that the pace of MFCU investigations was slow and affected MDHHS-OIGs 
ability to take administrative action (e.g., collect overpayments) when the MFCU 
_____________________________________________________________________________________________________________________________  
31 The Health Care Fraud Strike Force consists of an interagency team of Federal, State, and local law 
enforcement agencies that investigate and prosecute fraud in areas with concentrated fraudulent activity.  
As of June 2022, there are 16 Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike 
Force cities and regions across the United States.  Department of Justice,  Strike Force Operations. 
Accessed at https://www.justice.gov/criminal-fraud/strike-force-operations on April 13, 2022. 
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OEI-06-21-00270  Findings | 9     
ultimately decided to decline prosecution of the referral.32  Before the recent 
improvement in the pace of MFCU investigations, MDHHS-OIG staff reported that 
they had been more conservative in the number of referrals they sent to the MFCU.  
The Department of Attorney General repeatedly submitted the
MFCUs financial reports late, lacked support for some MFCU
expenditures, and lacked accounting procedures, raising concerns 
about the MFCUs fiscal controls 
According to Performance Standard 11, the MFCU should promptly submit to OIG its 
financial documentation (i.e., budgets and Federal Financial Reports) and apply 
accepted accounting principles in its control of Unit funding.  Similar to what is done 
in other States, the MFCUs fiscal controls were administered by an office within the 
Michigan Department of Attorney General, the Office of Fiscal Management.  
However, we found that its fiscal controls were noncompliant with Federal regulations 
in three areas.33 Specifically, we found that the Office of Fiscal Management, on 
behalf of the Michigan MFCU, (1) submitted most of the MFCUs Federal Financial 
Reports late; (2) lacked support for some MFCU expenditures; and (3) had not 
updated its policies and lacked detailed procedures for its new accounting system.  At 
the time of our review, the Unit director acknowledged that he had limited 
involvement with the Office of Fiscal Management, and therefore, he was not aware of 
the extent of the fiscal control issues identified in this report.  Both the Unit director 
and Office of Fiscal Management staff expressed that greater MFCU involvement in 
fiscal oversight would be beneficial.  
The Department of Attorney General submitted 13 of 15 Federal 
Financial Reports for the MFCU late  
We found that the Office of Fiscal Management submitted 13 of 15 required Federal 
Financial Reports late during our review period.34  The MFCU must submit its quarterly  
financial reports to OIG within 1 month after the close of each quarter and must 
submit its final financial report to OIG within 3 months after the close of the fiscal 
year.35  Of these late financial reports, one was more than 6 months late, three were 
more than 3 months late, and five were more than 1 month late.  The other four were 
submitted within a few days to a few weeks late.  These financial reports are 
important for ensuring that the Units expenditures meet grant requirements and 
assisting with fiscal monitoring of the Units funds spent.  Moreover, the Unit may 
_____________________________________________________________________________________________________________________________  
32 During OIGs review, we did not examine or verify MDHHS-OIGs concern that MFCU investigations 
were unreasonably slow. 
33 45 CFR  75.341, 75.381(a), and 75.403(g). 
34 45 CFR  75.341.  The MFCU Award Terms and Conditions require quarterly financial reporting.  
35 45 CFR  75.341 and 75.381(a); MFCU Award Terms and Conditions. 
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OEI-06-21-00270  Findings | 10     
experience significant delays in Federal reimbursement if these financial reports are 
not submitted timely.   
Staff from the Office of Fiscal Management reported that they experienced significant 
staff turnover during our review period, which contributed to the late submissions 
of Federal Financial Reports.  Although OIG provided technical assistance and training 
on completing and submitting financial reports to newly hired staff in the Office of 
Fiscal Management, these staff were not employed long enough to learn the MFCU 
grant requirements.  The Unit director reported that he did not review or approve any 
financial reports during our review period and that he was unaware that he could 
request to review and approve these reports.  
The Department of Attorney General did not maintain 
documentation for 8 of the 120 sampled MFCU expenditures 
The MFCU must adequately document expenditures for the expenditures to be 
allowable under Federal awards.36  However, we found that the Office of Fiscal 
Management did not maintain documentation for 8 of the 120 sampled MFCU 
expenditures, totaling $42,798 ($32,098 Federal share).  These expenditures were 
related to items such as employee travel and services.  Prior to FY 2020, expenditure
documentation was not required to be stored electronically within the Office of Fiscal 
Managements accounting system. During this time, it was the MFCUs responsibility 
to provide the Office of Fiscal Management any documentation stored outside of the 
accounting system (i.e., paper files).  Documents not included within the OFM 
accounting system were considered missing or misfiled.  Starting in FY 2020, the
Office of Fiscal management reported that all of the MFCUs expenditure 
documentation is required to be stored electronically.  Despite this change, we found 
missing documentation during all 3 years of our review period.  The Unit director 
reported that he was unaware that documentation for some MFCU expenditures 
was missing. 
The Department of Attorney General lacked policies and
procedures for its new accounting system  
The State must account for its MFCU grant funds in accordance with State laws and 
procedures for expending and accounting for its own funds.37   The State of Michigan 
implemented a new accounting system in FY 2018; however, as of April 2022, the 
Office of Fiscal Management had not updated its policies and procedures to provide 
guidance for the new system. According to staff in  the Office of Fiscal Management, 
the lack of detailed procedures and staffs unfamiliarity with the new accounting 
system contributed to delays and uncertainties with the Units fiscal reporting.  
_____________________________________________________________________________________________________________________________  
36 45 CFR  75.403(g). 
37 45 CFR  75.302(a) and 75.400.  
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OEI-06-21-00270  Findings | 11     
Despite the Units request for additional resources to increase its 
staffing levels, Unit staffing remained constant and did not align with 
the growing Medicaid expenditures 
According to Performance Standard 2(b), the Unit should employ a number of staff 
that is commensurate with the States Medicaid expenditures and enables Units to 
effectively investigate and prosecute an appropriate volume of case referrals and 
workload for Medicaid fraud and patient abuse or neglect.  We found that, despite a 
significant increase in the State Medicaid expenditures in the last 10 years, the Units 
number of employees remained constant. State Medicaid expenditures increased 
from $12.6 billion in FY 2011 to $21.3 billion in FY 2021, representing a 70 percent 
increase, while the Units number of staff increased only by 3 employeesfrom 28 to 
31 employees (see Exhibit 1).   
Exhibit 1: The Units number of staff remained constant while the State 
Medicaid expenditures increased significantly during FYs 20112021. 
$19.0 
$16.6  $17.4  $17.4  $17.1 
$12.6 
2011  2012  2013  2014  2015  2016  2017  2018  2019  2020  2021 
 
Source: OIG analysis of Unit-provided documentation, FYs 20112021. 
State Medicaid expenditures are reported in the billions of dollars.  
While OIG does not prescribe MFCU staffing  levels, OIG observed that the Michigan 
MFCU was significantly smaller than the MFCUs in States with similarly sized Medicaid  
programs. Applying a statistical regression model to all 53 States with MFCUs 
(including the District of Columbia and two U.S. territories) for FY 2021, OIG estimated 
a staff size of 50 for the Michigan MFCU.38  
The Unit director expressed to OIG the need for additional staff across all disciplines.  
However, he explained that low staffing levels are common across State offices in 
Michigan, including the MFCU, and that the State legislature has been hesitant to 
increase the size of State government for many years.  Between FYs 2001 and 2021, 
_____________________________________________________________________________________________________________________________  
38 OIGs FY 2021 statistical regression model used States Medicaid expenditures and MFCUs staff size in 
its analysis.  Applying a 90-percent confidence interval, the Michigan MFCU had a lower bound of         
22 staff and an upper bound of 116 staff.   
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OEI-06-21-00270  Findings | 12     
the number of State employees in Michigan decreased by 39 percent.39 In February
2021, the Unit director submitted a request to the Department of Attorney General to 
add four more staff to the Unit, but according to the director, the Department of 
Attorney General never advanced this request to the State legislature.  
The Unit director believed that the Units stagnant staffing levels had limited the 
Units ability to conduct data mining, which could generate additional fraud referrals.  
Although the Unit identified some cases through data mining, the Unit director 
explained that effective data mining efforts require considerable resources and 
ongoing support, including training staff.  The Unit currently employs one data 
analyst who is trained in data mining but also has additional analytical responsibilities. 
Unit management reported that in addition to the need for another data analyst, the 
Unit will need more investigative staff to work cases generated from increasing data 
mining efforts and fraud referrals from MDHHS-OIG. 
The MFCUs staffing limitations also affected its participation in other fraud and 
patient abuse or neglect initiatives, such as the Health Care Fraud Strike Force.40   
The director explained that these law enforcement initiatives are very staff-intensive, 
which would present a workload issue for the existing MFCU staff.  
Although the Unit coordinated with Federal partners, it worked few 
joint cases with them, missing opportunities for sharing resources 
and training 
Performance Standard 8(b) states that the Unit 
should cooperate and, as appropriate, coordinate   Performance Standard 8:  
with OIG and other Federal agencies on cases being  A Unit cooperates with OIG 
pursued jointly; cases involving the same suspects   and other Federal agencies 
or allegations; and cases that are referred to the Unit  in the investigation and  
by OIG or another Federal agency. We found that  prosecution of Medicaid and 
the Unit coordinated with Federal partnersOIG and  other health care fraud.  
the U.S. Attorneys Officesduring our review period 
_____________________________________________________________________________________________________________________________  
39 House Fiscal Agency, Budget Briefing: State Budget Overview,  The Michigan House of Representatives, 
January 2021, p. 23.  Accessed at 
https://www.house.mi.gov/hfa/PDF/Briefings/state_budget_overview_briefing_fy20-21.pdf  
on June 6, 2022. 
40 The director reported that the Unit routinely participated in special initiatives prior to 2011, including 
Project $CAMS, a Statewide law enforcement initiative to protect nursing home residents from financial 
exploitation. The initiative was sponsored by the Michigan Department of Attorney General and the 
Office of Inspector General for the Social Security Administration, and included other partners, such as 
the U.S. Department of Treasury and the Health Care Association of Michigan. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Findings | 13     
through its deconfliction of cases with Federal partners.41    
We found that aside from participating in deconfliction, the Unit worked few joint 
cases with Federal partners. During our 3-year review period, the Unit investigated 
13 cases jointly with OIG, which represented only 1 percent of the Units total cases.  
Additionally, we found that the Unit did not participate in the Health Care Fraud Strike 
Force operations, which OIG co-leads with the U.S. Department of Justice.  According
to OIG staff, one reason for the low number of joint cases was that the Unit did 
not have an office in Detroit (although three MFCU attorneys worked there remotely), 
where many OIG cases are investigated. We found that despite working few cases 
with OIG, the Unit maintained a positive working relationship with OIG, including 
regularly communicating about cases, requesting assistance from OIGs computer 
forensic team, and responding quickly to OIGs data requests. 
Similarly, we found that the Unit maintained a positive working relationship with the 
two U.S. Attorneys Offices (in the Eastern and Western Districts) but had few cases 
prosecuted by either Office.  Despite the low number of joint cases, officials in those 
districts described the Unit as a valuable resource and reported positive interactions 
with Unit staff. For example, the Western District reported consulting with the Unit on 
cases.  
One potential advantage of joint State-Federal cases is the opportunity to access and 
share expertise and resources (e.g., equipment and personnel) more effectively with 
other law enforcement agencies.  We found that the Unit missed such opportunities 
by working few joint cases with Federal partners.  The Unit also missed valuable 
opportunities for on-the-job training through joint casework with OIG and other 
Federal partners, which can be especially valuable for complex Medicaid fraud cases.  
During our onsite review, Unit management and staff expressed interest in working 
more joint cases with Federal partners.   
The Unit did not always report convictions or adverse actions 
to Federal partners within the appropriate timeframes  
Performance Standard 8(f) states that the Unit should transmit to OIG all pertinent 
information on convictions within 30 days of sentencing, or as soon as practicable if 
the Unit encounters delays in receiving the necessary information from the courts.42   
Pertinent information includes charging documents, plea agreements, and sentencing 
orders, so that convicted individuals can be excluded from Federal health care 
programs. The Unit must also report any adverse actions against health care 
_____________________________________________________________________________________________________________________________  
41 In law enforcement, deconfliction is the process of identifying and discussing cases that involve the 
same suspects and allegations to avoid duplicative and overlapping actions.  Even though the Unit
coordinated its cases with Federal partners, case coordination was not consistently documented in the 
Units case management system.  For more information about the deficiencies of the Units case 
management system, see Finding on page 18. 
42 42 CFR  1007.11(g). Convictions include those obtained by either Unit prosecutors or non-Unit 
prosecutors in any case investigated by the Unit.  
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OEI-06-21-00270  Findings | 14     
practitioners, providers, or suppliers to the NPDB within 30 calendar days of the date 
of the adverse action.43, 44  Consistent with findings from our 2013 onsite review, we 
found that the Unit did not always report convictions to OIG or adverse actions to the 
NPDB within the appropriate timeframes during FYs 20182020 (see Exhibit 2).45  
Exhibit 2:  The MFCU reported 48 percent of its convictions and 83 percent of 
its adverse actions late to Federal partners. 
48% 
NPDB  VJ%  83% 
 
Source: OIG analysis of Unit-provided documentation, FYs 20182020.  
The Unit reported 48 percent of its convictions to OIG more than 
30 days after sentencing  
The Unit reported 25 of its 52 convictions (48 percent) to OIG more than 30 days after 
sentencing.46  Specifically, the Unit reported 7 convictions between 31 to 60 days after 
sentencing, 1 conviction between 60 to 90 days after sentencing, and 17 convictions 
more than 90 days after sentencing.  Late reporting of convictions to OIG delays the 
initiation of the program exclusion process, which may result in improper payments to 
providers by the Medicaid program or other Federal health care programs as well as 
possible harm to beneficiaries. 
Unit management explained that one of the Units staff members, who had been 
assigned to submit convictions to OIG, failed to submit them on time.  The Unit 
reported these convictions to OIG as soon as it realized that the convictions had not 
been reported.   
_____________________________________________________________________________________________________________________________  
43 45 CFR  60.5.  Examples of final adverse actions include, but are not limited to, convictions, civil 
judgments (but not civil settlements), and program exclusions.  See SSA  1128E(g)(1).     
44 Performance Standard 8(g) states that the Unit should report qualifying cases to the Healthcare 
Integrity & Protection Databank [HIPDB], the National Practitioner Data Bank, or successor data bases.  
The HIPDB and the NPDB merged in 2013; therefore, we reviewed the reporting of adverse actions under 
NPDB requirements.  See 78 Fed. Reg. 20473 (April 5, 2013). 
45 The 2013 OIG onsite review found that the Unit failed to report 44 of 64 convictions (69 percent) to 
OIG for program exclusion.  Of these convictions, the Unit did not report 19 of them until 2 years after 
sentencing and 6 of them until 3 years after sentencing.  Unit management reported that they were 
unaware of the Federal requirement that Units must report to OIG individuals who were sentenced for 
financial exploitation of residential health care facility patients.  The Unit reported these individuals to 
OIG at the time of the onsite review after it learned about the requirement.         
46 OIG did not include late reporting of convictions where the MFCU encountered significant delays in 
receiving necessary sentencing information from the court. 
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OEI-06-21-00270  Findings | 15     
The Unit reported 83 percent of its adverse actions to the NPDB 
more than 30 days after the adverse action 
The Unit reported 30 of its 36 adverse actions (83 percent) to the NPDB more than 
30 days after the adverse action. Of the 30 adverse actions submitted late, the Unit 
reported 9 adverse actions between 31 to 60 days after the action and 21 adverse
actions more than 90 days after the action.  The NPDB is intended to restrict the 
ability of health care practitioners to move from State to State without disclosure 
or discovery of previous medical malpractice and adverse actions.  If a Unit fails to 
report adverse actions to the NPDB, individuals may be able to find new health 
care employment with an organization that is not aware of the adverse action 
against them.   
Unit management explained that several factors impacted the Units timeliness in 
reporting to the NPDB.  For example, the Unit staff member who was designated to 
report convictions to OIG was also responsible for reporting adverse actions to the 
NPDB, and failed to submit either. The Unit reported these adverse actions to the 
NPDB as soon as it realized that the actions were not reported.  Unit management
also said that it was unaware that the Unit was required to report individuals 
sentenced for financial exploitation of residential health care facility patients to the 
NPDB, in addition to OIG.  After OIG provided technical assistance to the Unit related 
to this requirement, the Unit reported the adverse actions to the NPDB.   
Sixty-two percent of the Units case files lacked documentation 
of periodic supervisory reviews 
Performance Standard 7(a) states that supervisory reviews should be conducted 
periodically, consistent with Unit policies and procedures, and noted in the case file.  
During our review period, the Unit policy required a supervisory review of case files 
every 90 days. Periodic supervisory review of 
cases during the investigation and prosecution 
phases can help ensure timely completion of cases 
and constitute on-the-job training and 
development opportunities for new investigators, 
cases open 
and documenting those reviews in the case longer than 90 days 
files can help ensure that cases are  did not contain 
documentation of 
properly managed. 
supervisory reviews 
consistent with 
Consistent with findings from our 2013 onsite 
Unit policy 
review, we found that for cases that were open
longer than 90 days, 62 percent did not contain 
documentation of quarterly supervisory reviews 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Findings | 16     
consistent with Unit policy.47  Of these case files, 37 percent did not contain 
documentation of supervisory reviews every 90 days (i.e., the supervisory reviews were 
conducted less frequently) and 25 percent did not contain documentation of any 
supervisory review during our 3-year review period.  Unit management and staff
explained that investigative teams generally discussed their cases with supervisors 
during team meetings and other informal conversations.  The Units collaborative 
approach of involving investigators, the data analyst, and attorneys in team meetings 
helped ensure that cases were properly managed and progressed as planned.
However, the investigative teams did not consistently document supervisory reviews 
or team meetings in the case files.  We found that the Unit inconsistently documented 
its supervisory reviews because of the deficiencies of its case management system 
(see Finding on page 18).  See Appendix C for an expanded list of case file review 
point estimates and confidence intervals.   
Although the Unit maintained an annual training plan for its staff, 
Unit supervisors did not consistently track or verify that staff 
documented their training 
Performance Standard 12(a) states that the Unit should maintain a training plan for
all professional disciplines (i.e., investigators, attorneys, and auditors/analysts) that 
includes an annual minimum number of training hours. In reviewing the Units 
training records, we found that the Unit maintained 
training plans for all professional disciplines and  Performance Standard 12(b):  
required that these staff complete a minimum  The Unit ensures that  
number of training hours annually. However,  professional staff comply with 
we found that staff did not consistently enter their  their training plans and 
completed training in the Units training system, and  maintain records of their 
Unit supervisors did not track or verify that staff  staffs compliance.  
recorded their training hours (see Exhibit 3 on the 
next page). Specifically, we found that 44 percent of investigators, 70 percent of 
attorneys, and 100 percent of auditors/analysts did not document their completed 
training in the Units training system during our review period.  
   
_____________________________________________________________________________________________________________________________  
47 The 2013 OIG onsite review found that the Units case files lacked periodic supervisory reviews and 
recommended that the Unit ensure that periodic supervisory reviews were documented.  In response, 
the Unit developed a case status form to ensure that periodic supervisory reviews were documented in 
the case files.  The Unit also revised its policies and procedures manual to reflect its required practice of 
conducting quarterly supervisory reviews.   
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OEI-06-21-00270  Findings | 17     
Exhibit 3: More than half of all Michigan MFCU staff in professional
disciplines did not document training hours according to Unit policy. 
All Professional Disciplines  59% 
Investigators  44% 
Attorneys  70% 
Auditors/A  nalysts  100% 
 
Source: OIG analysis of Unit-provided documentation, calendar years  20182020.  
In interviews, Unit staff reported that they did not always document trainings, 
particularly if they were conducted outside of the Department of Attorney General 
because those trainings had to be entered manually in the Units training system.  
Staff explained that either documenting trainings manually in the system was too 
time-consuming or the staff simply forgot to record the hours.  Unit supervisors
reported sending officewide reminders to staff about entering training hours in the 
system but acknowledged that they did not consistently follow up to ensure that all 
staff entered those hours into the system. As a result, Unit supervisors could not
identify which staff needed reminders to complete or document trainings in order to 
meet minimum training hours.  
The Units case management system made it difficult for Unit staff to 
retrieve case information and performance data 
At the time of our review, the Unit used the Department of Attorney Generals 
officewide case management system to maintain and retrieve case file information.  
Although the system stored different types of files electronically, we found that its 
features limited the Units ability to efficiently 
organize and retrieve pertinent case information.   Performance Standard 7(f):  
For example, the case management system limited  The Unit  should have a 
the size of files that could be uploaded and how  system that allows for  the 
documents were organized, and we found it difficult  monitoring and reporting of 
to locate specific documents within the system. Unit  case information.  
staff further reported that they found it difficult to 
label files in a descriptive manner using the systems pre-set classifications and 
default naming settings. Finally, Unit management reported that the case 
management system lacked the ability to efficiently generate the performance data 
reports required by OIG and that the Unit had to use manual workarounds within the 
system to track case outcomes, such as monetary recoveries, and other 
performance data. 
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OEI-06-21-00270  Findings | 18     
We found that to mitigate these shortcomings, Unit staff used the system on an 
inconsistent basis and sometimes relied on files saved on their computers or in paper 
form to document case information and progression.  Although Unit investigators 
were expected to upload all necessary documents immediately, some investigators 
did not upload documents until the end of their investigations.  Uploading these 
documents in a timely manner would benefit both Unit supervisors and newly 
assigned staff by enabling them to review case information and progression 
efficiently.  After the onsite review, OIG provided the Unit with technical assistance on 
how to better document and organize case information using its current system.  
For a long-term solution, Unit management reported that it  is exploring different case 
management systems that would allow for more efficient access and retrieval of case 
information. 
The Units MOU with the State Medicaid agency did not reflect 
current practice or law  
According to OIG regulation, the State Medicaid agency and the Unit should establish 
procedures by which the Unit will receive referrals of potential fraud from MCOs.48   
At the time of our onsite review in September 2021, the Units MOU with MDHHS-OIG 
lacked procedures for receiving potential fraud referrals from MCOs.49 Although not
included in the MOU, Unit staff reported that they had established informal 
procedures for how to receive MCO referrals.  Starting in FY 2018, the Unit requested 
that all MCOs send referrals simultaneously to the Unit and MDHHS-OIG.  
Further, we found that the MOU did not include a provision requiring the Unit to 
review its MOU with MDHHS-OIG at least every 5 years to ensure that it reflects 
current practice and law, as required by OIG regulation and Performance Standard 
10(a).50  The Unit director acknowledged that the MOU needed to be updated and 
stated that the Unit had already started negotiations with MDHHS-OIG staff.  The Unit 
director explained that in addition to including these two provisions, the revised MOU 
would include any other relevant information from the 2021 OIG onsite review. 
_____________________________________________________________________________________________________________________________  
48 42 CFR  1007.9(d)(3)(iv).  
49 This is different from the issue found in OIGs 2013 onsite review, which found that the Unit's MOU 
with MDHHS-OIG did not include the referral process for providers who were subject to a payment 
suspension based on a credible allegation of fraud.  42 CFR  1007.9(d). 
50 77 Fed. Reg. 32648 (June 1, 2012); 42 CFR  1007.9(d)(3)(v). 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Findings | 19     
CONCLUSION AND RECOMMENDATIONS 
We made nine findings based on our review of three previously identified areas of 
concern (fraud referrals, fiscal controls, and staffing levels) and the Units 
adherence to the MFCU performance standards, which warrant further attention.  The 
Unit director acknowledged the operational challenges that we identified and was 
taking steps to address them at the time of our review.  Despite the many challenges, 
we found that the Michigan MFCU had strong case outcomes for FYs 20182020.  
Through our review, we found that the Unit received few fraud referrals from the State
Medicaid agency, and despite the Unit taking steps that hold promise to increase 
these referrals, they remained low.  We also found that the Department of Attorney 
General repeatedly submitted the MFCUs financial reports late, lacked support for 
some expenditures, and lacked accounting procedures, raising concerns about the 
MFCUs fiscal controls.  We found that despite the Units request for additional 
resources to increase its staffing levels, Unit staffing remained constant and did not 
align with the growing Medicaid expenditures.     
Although the Unit coordinated and had positive relationships with Federal partners, 
we found that the Unit worked few joint cases with them, missing opportunities for 
sharing resources and training. We also found that, although the Unit maintained an 
annual training plan for its staff, Unit supervisors did not consistently track or verify 
that staff documented their training. Further, we found that the Units case 
management system made it difficult for Unit staff to retrieve case information and 
performance data.   
Additionally, we found that some operational issues have persisted since OIGs onsite 
review in 2013. We found that the Unit did not always report convictions and adverse 
actions to Federal partners within the appropriate timeframes.  We also found that 
although Unit supervisors reported conducting periodic supervisory reviews of all case 
files, 62 percent of the Units case files lacked documentation of periodic supervisory 
reviews. Lastly, we found that the Units MOU with the State Medicaid agency did not 
reflect current practice or law.  To address the findings in this report and further 
improve Unit operations, we make nine recommendations to the Michigan MFCU.   
 
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Conclusion and Recommendations | 20    
We recommend that the Michigan MFCU: 
Build upon its efforts to increase fraud referrals from the State 
Medicaid agency 
To ensure that the Unit receives an adequate number of fraud referrals, the Unit 
should continue to build upon its efforts to address MDHHS-OIGs concerns, such as 
providing regular updates and feedback on active and potential referrals, as well as 
seeking more opportunities to participate in training.  The Unit should also continually
assess whether its efforts are helping increase referrals of potential fraud and if there 
are other ways to improve its relationship with MDHHS-OIG. 
Refund the Federal grant for unsupported expenditures and establish 
processes to ensure Unit involvement and oversight of its fiscal 
controls and reporting 
On the basis of OIGs finding, the Unit and the Office of Fiscal Management should  
(1) refund the Federal grant of $32,098 for unsupported expenditures and  
(2) establish internal controls to prevent unsupported expenditures in the future and 
ensure compliance with Federal regulations.  Specific to establishing internal controls, 
the Unit and the Office of Fiscal Management should take the following actions to 
address the fiscal issues identified in this report: 
a)   create internal controls to ensure that the Unit submits all required Federal 
Financial Reports timely; 
b)   maintain supporting documentation for future expenditures on the Federal 
grant; and 
c)   make clear in the Units policies and procedures manual the Units fiscal 
responsibilities in supporting allowable costs and submitting timely and accurate 
financial reports. 
As an example of an internal control, the Unit and the Office of Fiscal Management 
could establish processes in which the Unit director reviews and approves all financial 
submissions prepared by the Office of Fiscal Management to ensure that financial 
reports submitted to OIG are accurate.  As a further aid to ensure timely submissions 
to OIG, the Unit and the Office of Fiscal Management could create internal deadlines 
to prepare and review the financial documents ahead of grant deadlines. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Conclusion and Recommendations | 21    
Assess the adequacy of existing staffing levels and, if appropriate, 
develop a plan to expand the size of the Unit 
The Unit should perform an assessment of its staffing needs and the potential 
benefits of additional staff resources for Unit operations.  In developing this
assessment, the Unit should consider including its current needs to further develop its 
data mining capabilities and participate in Federal law enforcement initiatives.  
The Unit should also consider providing specific information on the return on 
investment of current resources and how additional resources could augment the 
Units outcomes. On the basis of the results of its assessment, the Unit should, if 
appropriate, develop an expansion plan to increase its staffing levels to meet the 
needs of the Medicaid program.  OIG would be available to review the expansion plan 
and offer any technical assistance for its implementation.   
Seek opportunities, as appropriate, to investigate more joint cases 
with Federal partners 
The Unit should seek more opportunities, as appropriate, to investigate joint cases 
with Federal partners and should consider seeking to join the Health Care Fraud Strike 
Force initiative.  Participating in the Strike Force and other Federal cases would 
provide the Unit with opportunities for sharing resources with Federal partners and 
receiving additional training on complex fraud cases.  The Unit should also assess its 
office location and consider whether opening additional office locations in other parts
of the State, such as the Detroit area, is warranted by the volume of case referrals and 
potential workload; this may facilitate increased collaboration with OIG and other 
Federal partners stationed there. 
Develop and implement processes to ensure that all convictions and 
adverse actions are reported to Federal partners within the 
appropriate timeframes 
The Unit should develop and implement processes to ensure that it reports all 
convictions to OIG within 30 days of sentencing, or as soon as practicable if the Unit 
encounters delays in receiving the necessary information from the court.  The Unit 
should also develop and implement processes to ensure that it reports all adverse 
actions to the NPDB within 30 days of the action.  The Units processes for reporting
convictions and adverse actions to Federal partners should be included in its policies 
and procedures manual. The Unit should also inform staff that all convictions and 
adverse actions must be reported to Federal partners and emphasize the importance 
of timely reporting. The Unit could provide training to staff on reporting convictions 
and adverse actions to Federal partners to ensure that such reporting will occur in the 
event that staff members assigned to submit such reports are unavailable.  The Unit 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Conclusion and Recommendations | 22    
could also implement automated reminders that alert staff of this time-
sensitive responsibility.  
Ensure that supervisory reviews of case files are documented in 
accordance with Unit policy 
The Unit should ensure that supervisors document reviews of case files consistent 
with Unit policy.  The Unit could develop a systemelectronic or otherwisethat 
reminds supervisors to both conduct and document the periodic reviews.   
Ensure that Unit supervisors track and verify that all staff in 
professional disciplines document their training  
Unit supervisors should track and verify whether professional staff document training 
in the Units training system to ensure that they complete the minimum number 
of annual training hours.  To ensure that all professional staff document their training, 
the Unit could remind staff about the importance of reporting their training hours and 
set up automatic reminders for staff who are noncompliant in documenting training. 
Implement a new, comprehensive case management system that 
allows for efficient access to case documents and information 
The Unit should seek approval from the Department of Attorney General to acquire 
a new case management system that allows  for efficient access to case information 
and performance data. The Unit should ensure that the new case management 
system enables the Unit to efficiently meet its needs, including the ability to store 
case documents and information and produce performance data. 
Revise its MOU with the State Medicaid agency to reflect current 
practice and law 
The Unit should revise its MOU with MDHHS-OIG to establish procedures by which 
the Unit will receive referrals of potential fraud from MCOs.  The Unit should also 
revise its MOU to include the requirement that the Unit and MDHHS-OIG agree to 
review, and if necessary, update the MOU no less frequently than every 5 years to 
ensure that the agreement reflects current law and practice. 
 
 
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Conclusion and Recommendations | 23    
UNIT COMMENTS AND OIG RESPONSE 
The Michigan MFCU concurred with all nine of our recommendations. 
First, the Unit concurred with our recommendation to build upon its efforts to 
increase fraud referrals from the State Medicaid  agency.  The Unit reported that it will 
continue to demonstrate to MDHHS-OIG the value of increased program surveillance 
and referrals to the MFCU.  The Unit reported that it will continue to hold formal 
meetings with MDHHS-OIG, as directed by its memorandum of understanding, and 
will promote joint training with MDHHS-OIG. 
Second, the Unit concurred with our recommendation to refund the Federal grant for 
unsupported expenditures and establish processes to ensure Unit involvement and 
oversight of fiscal controls and reporting.  The Unit stated that the Department of 
Attorney General will refund the Federal grant $32,098 within 60 days of receiving 
repayment instructions.  The Unit also reported that the Office of Fiscal Management 
within the Department of Attorney General plans to update and/or establish policies 
and procedures to ensure that all expenditures are supported and all Federal Financial 
Reports are filed timely.  The Unit also noted that updates to accounting policies and 
procedures are underway to reflect the current accounting system, which the Unit 
expects to be completed in FY 2023. Additionally, the Unit reported that it plans to 
update the Unit operations manual to include a new section on grant management 
and fiscal duties.  Under the new section, the Unit director will have joint responsibility 
with the Office of Fiscal Management for filing the Federal Financial Reports on time.   
Third, the Unit concurred with our recommendation to assess the adequacy of 
existing staffing levels and, if appropriate, develop a plan to expand the size of the 
Unit. The Unit reported that it plans to draft an expansion plan, which it expects to 
complete by November 30, 2022. However, the Unit noted that regardless of 
available funding, the Department of Attorney General is bound by a legislatively 
imposed staffing cap and cannot hire more employees than allowed by the cap.  In 
the event of an increase in the staffing cap, the Unit reported that it will have an 
expansion plan in place for potential implementation, subject to the approval of the 
Department of Attorney General.  
While OIG appreciates that the Unit is developing an expansion plan, we continue to 
recommend that the Unit perform an assessment of its particular needs as a basis for 
developing the plan.  OIG is available to provide technical assistance in formulating 
the plan and urges the Unit to continue communicating to the Department of 
Attorney General the level of staffing that is necessary to fulfill the Units mission. 
Fourth, the Unit concurred with our recommendation to seek opportunities, as 
appropriate, to investigate more joint cases with Federal partners.  The Unit reported 
that the director met with the new leader for the Detroit Health Care Fraud Strike 
Force and has additional meetings planned to discuss a role for the MFCU on the 
Strike Force. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Unit Comments and OIG Response | 24    
Fifth, the Unit concurred with our recommendation to develop and implement 
processes to ensure that all convictions and adverse actions are reported to Federal 
partners within the appropriate timeframes.  The Unit reported that it faced 
challenges during the review period to complete this task within the timeframes.  The 
Unit is adding a section to its operations manual to ensure compliance with reporting 
requirements.   
Sixth, the Unit concurred with our recommendation to ensure that supervisory reviews 
of case files are documented in accordance with Unit policy.  The Unit reported that it 
will make changes to its case management system and operations manual and will 
provide training to managerial staff.  
Seventh, the Unit concurred with our recommendation to ensure that Unit supervisors 
track and verify that all staff in professional disciplines document their training.  The 
Unit reported that it will improve its process to document and track training and will 
update the operations manual to reflect this change.   
Eighth, the Unit concurred with our recommendation to implement a new, 
comprehensive case management system that allows for efficient access to case 
documents and information.  The Unit recognized that a case management system 
tailored to the MFCU would enhance Unit operations, but stated that the Department 
of Attorney General has adhered to a philosophy of maintaining an enterprise-wide 
system for all the Divisions in the Department to avoid a patchwork of systems with 
challenges in support, cost, and interoperability.   
The Unit stated that it will continue to promote advancements in case management, 
either with a new system tailored to the Unit or with improvements to the current 
system, but understands that the Department of Attorney General is responsible for 
serving many Divisions and interests with fixed resources.  OIG appreciates that the 
Department of Attorney General wants to avoid an inefficient patchwork of multiple 
case management systems, but continues to recommend that the Unit implement a 
system that will adequately serve its needs.  OIG has identified the Units existing 
system as a significant barrier to improving the Units operations.  If the Unit is unable  
to adequately adapt or modify the current enterprise-wide system, OIG continues to 
recommend that the Unit seek the necessary permission from the Department of 
Attorney General to acquire a new, comprehensive system to serve the Units needs.  
Ninth, the Unit concurred with our recommendation to revise its MOU with MDHHS-
OIG to reflect current practice and law.  The Unit reported that it has formed a 
working group with MDHHS-OIG that will revise the MOU.   
For the full text of the Units comments, see Appendix D.  
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Unit Comments and OIG Response | 25    
PERFORMANCE ASSESSMENT 
We assessed the Michigan MFCUs adherence to the 12 MFCU performance 
standards, including its compliance with applicable laws, regulations, and policy 
transmittals. From this review, we found that the Unit generally operated in 
accordance with applicable laws, regulations, and policy transmittals and reported 
strong case outcomes for FYs 20182020. We made nine findings that warrant further 
attention, which are presented here and in the body of the report.  We also made 
observations about Unit operations and practices.  The complete MFCU performance 
standards, including performance indicators, were published at 77 Fed. Reg. 32645 
(June 1, 2012), and appear on OIGs website at https://oig.hhs.gov/fraud/medicaid-
fraud-control-units-mfcu/. 
Performance Standard 1: Compliance with Requirements
A Unit conforms with all applicable statutes, regulations, and policy directives. 
Observation: From the information we reviewed, the Michigan MFCU generally 
complied with most applicable laws, regulations, and policy transmittals. 
However, we identified four compliance concerns.  Two compliance concerns related 
to the Units coordination with Federal partners and its reporting of convictions and 
adverse actions to Federal partners, as reported under Performance Standard 8.  
The third compliance concern related to the Units MOU with the State Medicaid 
agency, as reported under Performance Standard 10.  The fourth compliance concern  
related to the Units fiscal controls, as  reported under Performance Standard 11.  
Performance Standard 2: Staffing
A Unit maintains reasonable staff levels and office locations in relation to the 
States Medicaid program expenditures and in accordance with staffing  allocations 
approved in its budget.   
Finding: Despite the Units request for additional resources to increase its 
staffing levels, Unit staffing remained constant and did not align with the 
growing Medicaid expenditures. 
See page 12. 
   
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 26     
Performance Standard 3: Policies and Procedures  
A Unit establishes written policies and procedures for its operations and ensures 
that staff are familiar with, and adhere to, policies and procedures 
Observation: The Unit maintained written policies and procedures. 
The Unit maintained a policies and procedures manual, referred to as the operations 
manual, specific to the MFCUs functions and jurisdiction and separate from the 
Department of Attorney Generals policies and procedures manual.  The Units 
operations manual is available to Unit staff on a shared drive and was updated three 
times during our review period, most recently in September 2020.   
The Units current operations manual is an improvement from the one reviewed 
during OIGs 2013 onsite review when we found  that the Unit lacked certain policies 
for periodic supervisory reviews.  During our 2021 onsite review, we observed that the 
current manual included procedures for the supervisory reviews, among other 
features. However, we found that the Unit staff did not always follow these 
procedures in practice.  See page 16. 
Performance Standard 4: Maintaining Adequate Referrals 
A Unit takes steps to maintain an adequate volume and quality of referrals from 
the State Medicaid agency and  other sources.  
Finding: The Unit received few fraud referrals from the State Medicaid agency, 
and despite the Unit taking steps to increase these referrals, they remained low. 
See page 8. 
Observation: The Unit conducted outreach to increase its visibility and generate 
more fraud and patient abuse or neglect referrals. 
The Unit reported several outreach efforts that improved the number and quality of 
both fraud and patient abuse or neglect referrals during our review period.  Starting 
in FY 2018, the Unit requested that the States 10 MCOs send referrals simultaneously 
to the Unit and MDHHS-OIG.  We observed that the MCO referrals increased from  
1 in FY 2018 to 57 in FY 2020.  In FY 2020, the Unit and MDHHS-OIG established a 
pilot program wherein they would meet monthly with two MCOs to provide feedback 
on their referrals in real time. All four agencies reported improved communication 
and a better understanding on what constitutes a quality fraud referral.  The Unit and 
MDHHS-OIG also reported plans to expand the program to other MCOs in the State.  
Additionally, during our review period, both fraud and patient abuse or neglect 
referrals increased from the public, which was the Units largest source of referrals.  To 
generate more referrals from the public, the Unit offered resources and assistance to 
local police departments, resulting in stronger relationships with local law 
enforcement officers who handle complaints from the public.  During the review 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 27     
period, the Unit received a total of 2,699 referrals, of which 86 percent (2,325) were 
from the public. See Appendix A for all sources of fraud and patient abuse or neglect 
referrals during FYs 20182020.  
Performance Standard 5: Maintaining Continuous Case 
Flow 
A Unit takes steps to maintain a continuous case flow and to complete  cases in an 
appropriate  timeframe based on the complexity of the cases. 
Observation: Nearly all case files contained documentation of supervisory 
approval for case openings and closings. 
According to Performance Standard 5(b), supervisors should approve the opening 
and closing of all investigations.  Our review found that nearly all the case files 
contained documentation of supervisory approval of case openings and closings.  An 
estimated 91 percent of case files had supervisory approval to open the case for 
investigation, and an estimated 98 percent of the Units closed cases contained 
supervisory approval to close the case.  See Appendix C for point estimates and 
confidence intervals for our case file review.  
Performance Standard 6: Case Mix 
A Units case mix, as practicable, covers all significant provider types and includes a 
balance of fraud and, where appropriate, patient abuse and neglect cases.  
Observation: The Units caseload included both fraud and patient abuse or 
neglect cases and covered a broad mix of provider types. 
Of the 923 cases that were opened during FYs 20182020, 83 percent (762) involved 
fraud, and 17 percent (161) involved patient abuse or neglect.  During this period, the 
Units cases covered 38 different provider types, including pharmaceutical 
manufacturers, medical device manufacturers, and pharmacies.  
Performance Standard 7: Maintaining Case Information 
A Unit maintains case files in an effective manner and develops a case management 
system that allows efficient access to case information and other performance data.  
Finding: Sixty-two percent of the Units case files lacked documentation of 
periodic supervisory reviews. 
See page 16. 
Finding: The Units case management system made it difficult for Unit staff to 
retrieve case information and performance data.   
See page 18. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 28     
Performance Standard 8: Cooperation with Federal
Authorities on Fraud Cases 
A Unit cooperates with OIG and other Federal agencies in the investigation and 
prosecution  of Medicaid and other health care fraud. 
Finding: Although the Unit coordinated with Federal partners, it worked few 
joint cases with them, missing opportunities for sharing resources and training. 
See page 13. 
Finding: The Unit did not always report convictions or adverse actions to Federal 
partners within the appropriate timeframes.   
See page 14. 
Performance Standard 9: Program Recommendations 
A Unit makes statutory or programmatic recommendations, when warranted, to the 
State government. 
Observation: The Unit made two programmatic recommendations to the State 
Medicaid agency during our review period. 
First, the Unit recommended that MDHHS amend the State Medicaid Provider Manual 
to prevent behavioral health providers with a criminal history from providing therapy 
services to children with Autism Spectrum Disorders, consistent with the States Public 
Health Code.  Second, to reduce fraud in the States home health program, the Unit 
recommended that MDHHS identify and recover overpayments from providers who 
did not provide services to beneficiaries or provided services in violation of the States 
Medicaid policy.  As part of this recommendation, the Unit requested that any of the 
beneficiarys family members be ineligible to receive Medicaid payment for providing 
any home health services to the beneficiary.  At the time of our review, these two 
recommendations had not yet been implemented by MDHHS.  
Performance Standard 10: Agreement with Medicaid 
Agency
A Unit periodically reviews its Memorandum of Understanding (MOU) with the 
State Medicaid agency to ensure that it reflects current practice, policy, and legal 
requirements. 
Finding: The Units MOU with the State Medicaid agency did not reflect current 
practice or law. 
See page 19. 
   
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 29     
Performance Standard 11: Fiscal Control 
A Unit exercises proper  fiscal control over its resources.   
Finding: The Department of Attorney General repeatedly submitted the MFCUs 
financial reports late, lacked support for some MFCU expenditures, and lacked 
accounting procedures, raising concerns about the MFCUs fiscal controls. 
See page 10. 
Observation: The Department of Attorney General submitted three of its indirect 
cost rate proposals late to the approving agency.  
A State government with Federal grants must develop (and, when required, submit) 
indirect cost rate proposals to the relevant Federal agency within 6 months after the 
close of the fiscal year to receive reimbursement for indirect costs.51, 52, 53 During our 
review period, we found that the Department of Attorney General submitted its 
FY 2018 indirect cost rate proposal 4 months late, its FY 2019 indirect cost rate 
proposal 2.5 months late, and its FY2020 indirect cost rate proposal 1.5 months late.  
All three rate proposals received a filing extension to June 30 of the applicable 
submission year. The Office of Fiscal Management reported that the indirect cost 
proposals were late because an external vendor, who was responsible for creating 
these proposals, had not completed them on time. 
Performance Standard 12: Training 
A Unit conducts training that aids in the mission of the Unit.  
Finding: Although the Unit maintained an annual training plan for its staff, Unit 
supervisors did not consistently track or verify that staff documented their 
training. 
See page 17. 
Observation: The Unit improved its onboarding training for investigators after 
our review period. 
In September 2020, the Unit implemented a new training program, called The Field 
Training Program, after receiving feedback from its investigators.  We found this new 
training program more thorough for new investigators compared to the one 
_____________________________________________________________________________________________________________________________  
51 45 CFR Part 75, Appendix VII(A). Indirect costs are costs that incur for common or joint purposes.  
Indirect costs help with more than one cost category type (e.g., salaries, equipment, supplies) and cannot 
be readily identified with a particular cost category.  Because of diverse accounting practices of 
governmental units, entities calculate indirect costs rates using various cost categories. 
52 45 CFR Part 75, Appendix VII(B)(7), defines an indirect cost rate as a device for determining in a 
reasonable manner the proportion of indirect costs each program should bear.  It is the ratio (expressed  
as a percentage) of the indirect costs to a direct cost base. 
53 45 CFR Part 75, Appendix VII(D)(1)(d).  HHS Program Support Center approved the MFCUs indirect 
cost rate proposals during our review period.  
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 30     
previously in place. For example, the new training program includes Medicaid-
specific content areas and requires that new investigators shadow a senior 
investigator for at least the first 6 months.  At the time of our onsite review, Unit 
management reported that they were still formalizing the training program. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Performance Assessment | 31     
 
APPENDICES 
Appendix A: Unit Referrals by Source for Fiscal Years 20182020 
 
FY 2018   FY 2019   FY 2020   3-Year Total  
Abuse or  Abuse or  Abuse or  Abuse or 
Referral Source  Fraud  Fraud  Fraud  Fraud  Total  
Neglect  Neglect  Neglect  Neglect 
Anonymous   97  0  117  15  96  32  310  47  357 
HHS-OIG   1  2  9  6  12  9  22  17  39 
Licensing  board  1  1  6  2  1  1  8  4  12 
Local prosecutor   2  0  0  0  0  0  2  0  2 
Long-Term Care 
0  1  0  2  0  2  0  5  5 
Ombudsman 
MCOs   1  0  47  0  57  0  105  0  105 
Medicaid agency -
Program Integrity  2  0  1  0  1  0  4  0  4 
Unit (DHHS-OIG) 
Medicaid agency
0  0  1  0  0  0  1  0  1 
(other)  
Other law 
4  1  3  1  1  1  8  3  11 
enforcement 
Private citizen   446  79  547  141  619  136  1,612   356  1,968  
Private health insurer   13  0  4  0  0  0  17  0  17 
State agency other  3  0  5  7  9  8  17  15  32 
State survey and
13  36  0  54  1  4  14  94  108 
certification agency  
11  0  7  5  10  5  28  10  38 
Other 
Sub-Total   594   120   747   233   807   198   2,148   551   2,699  
Total   714  980  1,005  2,699 
Source: OIG analysis  of Unit Annual Statistical Reports, FYs 20182020. 
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Appendix A | 32     
Appendix B: Detailed Methodology  
We collected and analyzed data from the seven sources described below to examine 
three identified areas of concern related to the Michigan MFCUs fraud referrals, fiscal 
controls, and staffing levels, and to assess the Units performance.  We used the data 
sources to make findings and recommendations, as well as observations about the 
Units case outcomes and operations and practices concerning the performance 
standards. 
Data Collection and Analysis  
Review of Unit Documentation  
Prior to the onsite visit, we reviewed recertification information for FYs 20182020, 
including (1) the Units annual reports, (2) the Unit directors recertification 
questionnaires, (3) the Units MOU with the State Medicaid agencys program integrity 
unit (MDHHSOIG), (4) the OIG Special Agent in Charge questionnaires, and (5) data 
mining logs. We also reviewed the Units annual statistical reports, which allowed us 
to determine the total number of the referrals that the Unit received from a variety of 
sources. This also allowed us to determine the Units case outcomesindictments, 
investigations, criminal convictions, civil settlements and judgments, and monetary 
recoveries (criminal, global civil, and nonglobal civil)for FYs 20182020.  
Additionally, we examined prior OIG findings and recommendations and reviewed the 
Units implementation of those recommendations.  
As part of our review of Unit staff levels, we assessed them using a simple linear 
regression model to compare Medicaid expenditures to actual staff.  We also 
examined other Unit documentation to determine the length of each staff members 
employment with the Unit during our review period.  Additionally, we reviewed the
Units annual training to assess staffs adherence to the training plans and determine 
whether staff received adequate training. 
We also reviewed Unit policies and procedures and held discussions with Unit 
management during the onsite review to gain a better understanding of those 
documents.  We confirmed with the Unit director that the information we had was 
current, and we requested any additional data and clarification as needed.   
Review of Unit Financial Documentation  
OIG auditors reviewed the Units internal fiscal controls related to late submissions of 
Federal Financial Reports to OIG and the Units use of fiscal resources to identify 
issues with its internal controls. Prior to the onsite review, we administered an 
internal controls questionnaire to Unit staff and fiscal staff from the Department of 
Attorney General. The questionnaire covered topics such as accounting, budgeting, 
personnel, procurement, property, equipment, and the Units financial policies and 
procedures.  During the onsite review, we followed up with the respondents to clarify 
any issues identified in the questionnaire. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Appendix B | 33     
We also examined the Units claimed grant expenditures for FYs 20182020.  For 
these expenditures, we (1) reviewed the Units payment records to identify unusual 
patterns of withdrawal amounts; (2) reconciled the Units Federal Financial Reports 
(SF-425 forms) that the Unit submitted to OIG with the Units transaction detail report 
for our review period; (3) compared the Units transactions detail reports with its 
approved budgets; and (4) reviewed the Units indirect costs to determine if the costs 
were adequately allocated to the Unit in accordance with the HHS-approved indirect 
cost rates. 
We selected three purposive samples to assess the Units internal controls of fiscal 
resources:    
1.   To assess the Units expenditures, we selected a sample of 120 transactions 
totaling $356,552 and reviewed supporting documentation to determine 
whether the costs claimed were allowable, allocable, and reasonable, in 
accordance with Federal regulations. 
2.   To assess inventory, we selected and verified a sample of 26 fixed assets from 
a total of 240 items assigned to the Unit. 
3.   To assess employee time and effort, we also selected and verified a sample of
37 employees salaries over 3 pay periods from 37 employees who were 
employed during FYs 20182020.  Salary documentation consisted of 
timesheets and payroll adjustments.    
Interviews with Key Stakeholders 
During August through October 2021, we interviewed stakeholders from nine entities 
who were familiar with the MFCUs operations, including officials in MDHHSOIG, the 
U.S. Attorneys Office, two MCOs, and the Department of Attorney Generals Solicitor 
General and Fiscal Management staff.  We also interviewed Special Agents from OIGs 
Office of Investigations in the Detroit Field Office.  We focused these interviews on the  
Units relationship and interaction with the stakeholders as well as opportunities for 
improvement. We used the information collected from the interviews to develop 
subsequent interview questions for Unit management and selected staff.   
Onsite Interviews with Unit Management and Selected Staff 
With the assistance of OIG Special Agents and the chief investigator from another 
State MFCU, we conducted structured onsite interviews with the Unit director, chief 
investigator, and selected staff, including investigators and attorneys.  The interviews 
focused on our three targeted areas (the Units fraud referrals, fiscal controls, and 
staffing levels); Unit operations; and the Units training and technical assistance needs.  
We also followed up on any issues identified from the key stakeholder interviews and 
our analysis of Unit documentation.   
 
 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Appendix B | 34     
Onsite Review of Case Files 
We asked the Unit to provide us with a list of cases that were open at any point 
during FYs 20182020 and to include the status of each case; whether the case was 
criminal, nonglobal civil, or global civil; and the dates on which the case was opened 
and closed, if applicable.  The total number of cases that met these parameters was 
923. We then excluded a total of 430 cases from our review because they were global 
civil cases. We excluded all global civil cases because they are civil false claims actions 
that typically involve multiple agencies, such as the U.S. Department of Justice and a 
group of State MFCUs. From the remaining 493 case files, we  selected a simple 
random sample of 90 cases.  This sample allowed us to make estimates of the overall 
percentage of case files with various characteristics with an absolute precision of  
+/- 10 percent at the 95-percent confidence level.  With the assistance of OIG agents 
and the chief investigator from another State MFCU, we reviewed the 90 case files for 
adherence to the relevant performance standards and compliance with statute, 
regulation, and policy transmittals. During the review, we consulted MFCU staff to 
address any apparent issues with individual case files, such as missing documentation.  
Review of Unit Submissions to OIG and the NPDB 
We also reviewed all convictions submitted to OIG for program exclusion (52) and all 
adverse actions submitted to the NPDB (36) during FYs 20182020 and assessed the
timeliness of these submissions.   
Onsite Review of Unit Operations 
While onsite, we examined the Units workspace and operations of the Units office in 
East Lansing. We looked at the Units offices and meeting spaces; security of data and 
case files; location of select equipment; the functionality of the Units electronic case 
management system; and the general functioning of the Unit. 
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  Appendix B | 35    Appendix C: Point Estimates and 95-Percent Confidence Intervals of 
Case File Reviews 
Exhibit C-1: Estimates for All Case File Reviews 
95-Percent 
Confidence Interval 
Estimate Description  Sample Size   Point Estimate  Lower  Upper 
Percentage of All Cases That Had Supervisory Approval 
90  91.11%  83.77%  95.74%
To Open  
Percentage of All Cases Closed at the Time of Our 
90  77.78%  68.56%  85.19%
Review 
Percentage of All Closed Cases That Had Supervisory 
63  98.41%  91.47%  99.96%
Approval To Close 
Source: OIG analysis of Michigan Unit case  files,  FYs  20182020. 
Exhibit C-2: Estimates for Case Files Open Longer Than 90 Days 
95-Percent 
Confidence Interval 
Estimate Description  Sample Size   Point Estimate  Lower  Upper
Percentage of All Cases Missing Some or All 
84  61.9%  50.66%  72.29%
Supervisory Reviews 
Percentage of All Cases Missing Some Supervisory 
84  36.9%  26.63%  48.13%
Reviews  
Percentage of All Cases Missing All Supervisory Reviews  84  25%  16.19%  35.64% 
Source: OIG analysis of Michigan Unit case  files,  FYs  20182020. 
*The 95-percent confidence intervals for project proportion of supervisory reviews exceed 10-percent absolute precision. 
Michigan Medicaid Fraud Control Unit: 2021 Review 
OEI-06-21-00270  Appendix C | 36   STATE OF MICHIGAN  
DEPARTMENT  OF ATTORNEY GENERAL  
Appendix D: Unit Comments  P.O.  BOX  30218 
LANSING,  MICHIGAN  48909  
DANA NESSEL  
ATTORNEY GENERAL  
September  21, 2022  
Suzanne Murrin  
Deputy Inspector General for Evaluation  and Inspections  
Room 5660  
Cohen Building  
30 Independence Avenue, SW  
Washington,  DC 20201  
Re:   Michigan MFCU  2021 Review, OEI-06-21-00270  
Dear Deputy  Inspector General Murrin:  
Before I provide the formal comments to the draft 2021 Michigan MFCU  
Review report,  I wish  to thank the core HHS-OIG team  leading the review process.   
Anthony Soto-McGrath, Keith  Peters, and Kristen Calille have  been outstanding  
partners in this process and were professional, responsive, transparent, and helpful.  
As you know, HHS-OIG has made nine recommendations to the Michigan  
MFCU and has asked the MFCU to concur with those recommendations and  
describe specific actions the  MFCU intends to take in response.  Each of the 
recommendations are addressed below.  
1.  Build upon efforts to increase fraud referrals from the State Medicaid 
agency. 
MFCU Response: The MFCU concurs with this recommendation.  Because 
the MFCU and State  Medicaid agency (MDHHS-OIG) are, by design, distinct  
entities, the MFCU is  not able to directly  control the number of referrals  
received from the agency, nor their priorities.  However, it  is recognized that the 
MFCU has influence  over this process and can and will continue  to attempt to  
demonstrate the value to Medicaid program integrity of increased program  
surveillance  and referrals to the MFCU  by  MDHHS-OIG.   
Specifically, the MFCU will follow a regimen of formal meetings  with  
DHHS-OIG management as guided by the  memorandum of understanding  
between the agencies.  The MFCU will use these meetings to both provide and  
listen to feedback on collaboration  with  DHHS-OIG.   Additionally, the MFCU 
Michigan Medicaid Fraud Control Unit: 2021 Review 
OEI-06-21-00270  Appendix D | 37   Suzanne Murrin  
Page  2  
September  21, 2022  
will promote the concept of joint training with DHHS-OIG where it has mutual  
value.  
2.  Refund the Federal grant for unsupported expenditures and establish 
processes to ensure Unit involvement  and oversight of its fiscal controls 
and reporting. 
MFCU Response: The MFCU concurs with this recommendation.   The  
Michigan Department of Attorney General  (DAG)  will refund the Federal grant  
$32,098 within 60 days of receiving repayment instructions.   The DAG Office of 
Fiscal Management (Fiscal) will update and/or establish if needed, policies and 
procedures to ensure  all expenditures are supported and ensure  all Federal  
Financial Reports (FFR) are filed timely.   DAG Fiscal has submitted all FFRs on  
time beginning with the 12/31/21 report.    
Accounting policies and procedures are being updated to reflect the current  
accounting system (SIGMA).   This update will be completed in fiscal year 22-23.  
The MFCU will update the Unit Operations Manual to  include a  new section 
on grant management and fiscal duties.   This section will require the Unit Director  
to have joint responsibility  with DAG Fiscal  for filing the FFR on time.   This 
Operations Manual  Update will be completed by October 31, 2022.   Quarterly  
recurring meetings for this purpose have already been set going forward.  
3.  Assess the adequacy of existing staffing levels and, if appropriate, develop 
a plan to expand the size of the Unit. 
MFCU Response: The MFCU concurs with this recommendation.   The DAG 
understands the need for adequate staffing  across the broad array of Department  
responsibilities.  As HHS-OIG has learned,  each Department in  Michigan 
government is bound  by a  legislatively  imposed staffing cap.  Thus, regardless of 
available funding, the DAG may not hire more full-time employees than allowed by  
this cap.  Until  and unless the legislature deems it appropriate to permit the DAG  
to grow,  the  DAG must utilize existing employees to satisfy  all important and  
evolving  Department priorities.  
Nevertheless, the MFCU will produce a draft expansion plan by  November  
30,  2022.   In the event the DAG staffing cap is  increased, a thoughtful plan will be  
in place for potential implementationsubject to the approval of  the DAG.  
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September  21, 2022  
4.  Seek opportunities, as appropriate, to investigate more joint cases with 
Federal partners. 
MFCU Response: The MFCU concurs with this recommendation.   The MFCU  
agrees that meaningful engagement with federal partners, particularly the Detroit  
Strike Force, would be beneficial to the Unit mission.   The MFCU Director reached  
out and met (virtually) the new Strike Force leader and additional meetings to 
discuss a MFCU role are planned.  The MFCU already supports Strike Force cases  
by providing Medicaid data and expert analysis.   The MFCU responded to 65  
requests for this type of support from various federal agencies in the last  year alone.   
However, it  is understood that a deeper  partnership with true joint investigative  
casework would provide  additional mutual benefits.  
5.  Develop and implement processes to ensure that all convictions and 
adverse actions are reported to Federal partners within the appropriate 
timeframes. 
MFCU Response: The MFCU concurs with this recommendation.   The MFCU  
does report all convictions to HHS-OIG Exclusions yet has faced challenges  in 
completing that  task  within the prescribed 30-days.  During the review period for 
this onsite review, a significant number  of conviction reports that fell  beyond the 
30-day threshold were  directly  due to misconduct by  the responsible  staff member 
who resigned during the subsequent disciplinary process. 
In order to ensure compliance with reporting requirements, the  MFCU will  
add a section to the Operations Manual codifying  applicable standards.  This will be  
completed  by  October 31, 2022.  
6.  Ensure that supervisory reviews of case files are documented in 
accordance with Unit  policy. 
MFCU Response: The MFCU concurs with this recommendation.   The MFCU  
will take steps to improve compliance with  existing requirements governing  
supervisory case file reviews.  Specifically, the Unit  will employ new naming  
conventions to case file notes in the case management system to ensure these 
reviews are done and documented in a uniform way.   This will be  memorialized in  
amendments to the Operations Manual by  October 31,  2022,  and all managerial  
staff will be trained on this new information by October 31,  2022.  
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September  21, 2022  
7.  Ensure that Unit supervisors track and verify that  all staff in professional 
disciplines document their training. 
MFCU Response: The MFCU concurs with this recommendation.   The past  
method for tracking training history has involved a non-intuitive process within  
SharePoint  that required multiple steps.  This contributed to non-compliance in  
reporting by staff.  Effective October 1,  2022, the MFCU  will  be  maintaining a 
stand-alone spreadsheet to capture and track professional training more accurately.   
Reporting will be done through the assigned secretary for each  professional staff 
person.  This process  will be codified in the  Operations Manual no later than  
October  31, 2022.  
8.  Implement a new, comprehensive case management system that allows 
for efficient access to case documents and information. 
MFCU Response: The MFCU concurs with this recommendation.   It is 
recognized that a purpose-built case management system tailored to the MFCU  
would enhance Unit operations.  However, the DAG has consistently adhered to the 
philosophy of administering an enterprise-wide case management systemone that  
serves the needs of all DAG Divisions.  There are many  arguments in favor of this  
approach to case management and not  allowing  individual Divisions to acquire their 
own custom systeman approach that could  create a patchwork of systems with  
challenges in  support, cost,  and interoperability.    
The MFCU will continue to promote advancements in DAG electronic case 
managementeither with a new system  for the Unit  or with  improvements to the 
current systemthat  best serve the Unit while recognizing and respecting the DAG  
is responsible for serving many Divisions and interests with fixed resources.  
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OEI-06-21-00270  Appendix D | 40   Suzanne Murrin  
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September  21, 2022  
9.  Revise the MOU with the State Medicaid agency to reflect current 
practice and law. 
MFCU Response: The MFCU concurs with this recommendation.   The MFCU  
agrees that the existing MOU with DHHS-OIG is stale  in several respects.  A  
working group of DHHS-OIG staff and MFCU staff has already  been formed and  
has met to work on the necessary revisions to the MOU.   The target date for  
execution of the revised MOU is November  30, 2022.  
Sincerely,  
David  E. Tanay  
Division Chief  
Health Care Fraud Division  
517-241-6500 
DET:  
cc:   Fadwa Hammoud  
Keith Peters  
Michigan Medicaid Fraud Control Unit: 2021 Review 
OEI-06-21-00270  Appendix D | 41   ACKNOWLEDGMENTS AND CONTACT 
Acknowledgments 
Anthony Soto McGrath served as the team leader for this study, and Kristen Calille 
served as the lead analyst.  Medicaid Fraud Policy and Oversight Division staff who 
participated in the review included Keith Peters.  Office of Evaluation and Inspections 
staff who provided support include Anna Brown, Robert Gibbons, Sarah Smith, Sara 
Swisher, and Jordan Swoyer. 
We would also like to acknowledge the contributions of other Office of Inspector 
General staff, including two special agents from the Office of Investigations and staff 
from the Office of Audit Services, including Kathryn Cartwright, Mitchell Collier, and 
Lisa Capuano.  Finally, Lloyd Early of the Ohio MFCU served as a member of the team.
This report was prepared under the direction of Ruth Ann Dorrill, Regional Inspector 
General for Evaluation and Inspections in the Dallas regional office, and Petra Nealy, 
Deputy Regional Inspector General, as well as in consultation with Richard Stern, 
Director of the Medicaid Fraud Control Policy and Oversight Division. 
Contact 
To obtain additional information concerning this report, contact the Office of Public 
Affairs at Public.Affairs@oig.hhs.gov.  OIG reports and other information can be found 
on the OIG website at oig.hhs.gov. 
Office of Inspector General 
U.S. Department of Health and Human Services 
330 Independence Avenue, SW 
Washington, DC 20201 
Michigan Medicaid Fraud Control Unit: 2021 Review 
OEI-06-21-00270  Acknowledgments and Contact | 42   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
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: 
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 audits help reduce waste, abuse, and mismanagement and promote economy 
and efficiency throughout HHS. 
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. 
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. 
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.  
Michigan Medicaid Fraud Control Unit: 2021 Review   
OEI-06-21-00270  About the Office of Inspector General | 43