U.S. Department of Health & Human Services  
Office of Inspector General 
S
EMIANNUAL
R
EPORT to
C
ONGRESS
April 1, 2016
  to  
September 30, 2016   
nn
oo
ii THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS), Office of Inspector General (OIG) 
tt
aa provides independent and objective oversight that promotes economy, efficiency, and effectiveness in the programs and 
zz operations of HHS.  OIGs program integrity and oversight activities are shaped by legislative and budgetary requirements 
ii and adhere to professional standards established by the Government Accountability Office (GAO), the Department of 
nn
Justice (DOJ), and the Inspector General community.  OIG carries out our mission to protect the integrity of HHS programs 
aa and the health and welfare of the people served by those programs through a nationwide network of audits, investigations, 
gg
and evaluations.  Our work is conducted by the following operating components with assistance from OIG counsel and 
rr management.  
OO
OAS The Office of Audit Services (OAS).  OAS conducts audits of HHS programs and operations through its own  
  
resources or by overseeing audit work done by others.  Audits examine the performance of HHS programs and/or its 
GG
grantees and contractors in carrying out their respective responsibilities and are intended to provide independent 
II assessments of HHS programs and operations.  These assessments help reduce waste, abuse, and mismanagement  
OO and promote the economy, efficiency, and effectiveness of programs and operations throughout HHS.
OEI
The Office of Evaluation and Inspections (OEI).  OEI conducts national evaluations to provide HHS, Congress, and the 
public with timely, useful, and reliable information on significant issues.  These evaluations focus on preventing fraud, 
waste, and abuse and promoting economy, efficiency, and effectiveness in HHS programs.  OEI reports also present 
practical recommendations for improving program operations.
OI The Office of Investigations (OI).  OI conducts criminal, civil, and administrative investigations of fraud and 
misconduct related to HHS programs, operations, and beneficiaries.  With investigators working in almost every State, 
the District of Columbia, and Puerto Rico, OI coordinates with DOJ and other Federal, State, and local law enforcement 
authorities.  OI also coordinates with OAS and OEI when audits and evaluations uncover potential fraud.  OIs 
investigative efforts often lead to criminal convictions, administrative sanctions, or civil monetary penalties (CMPs).
OCIG The Office of Counsel to the Inspector General (OCIG). 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, self-disclosure, and CMP cases.  In connection with these cases, OCIG also negotiates and monitors 
corporate integrity agreements (CIA).  OCIG renders advisory opinions, issues compliance program guidance, publishes 
fraud alerts, and provides other guidance to the health care industry about the anti-kickback statute and other OIG 
enforcement authorities.
EM Executive Management (EM).  EM is composed of the Immediate Office of the Inspector General and the Office  
of Management and Policy.  EM is responsible for overseeing the activities of OIGs components; setting vision  
and direction, in collaboration with the components, for OIGs priorities and strategic planning; ensuring effective 
management of budget, finance, information technology (IT), human resources, and other operations; and  
serving as a liaison with HHS, Congress, and other stakeholders.  EM plans, conducts, and participates in a  
variety of cooperative projects within HHS and with other Government agencies.
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eAAsppsrr  ii ll    11 |,,    22   00 A11p66  ril   SS1ee, pp20ttee1mm6 bb eeSrre  33p00t,,e  22m00b11e66r   30, 2016  i ii OFFICE OF  
INSPECTOR  
GENERAL
A MESSAGE FROM THE INSPECTOR GENERAL 
Daniel R. Levinson 
Inspector General
I am pleased to submit this Semiannual Report to Congress summarizing activities of the  
Office of Inspector General (OIG), Department of Health and Human Services (HHS or the 
Department), for the 6-month period that ended September 30, 2016.  OIG provides independent, objective  
oversight for the Departments health and human service programs.  OIG is a multidisciplinary organization  
principally comprising auditors, investigators, and evaluators who work in concert to protect the integrity  
of HHS programs as well as the health and welfare of the people they serve.  
The people served by HHS programs are at the center of OIGs oversight work and mission.  By identifying and 
recovering misspent taxpayer dollars, investigating wrongdoing, and assessing program vulnerabilities, our  
work helps to ensure that HHS programs deliver services that are efficient, safe, and of appropriate quality.  
During this reporting period, OIG expanded its focus on the quality and safety of care provided to vulnerable 
populations, including those in non-institutional settings.  Programs that deliver health care in non-institutional settings 
are increasingly popular choices that help beneficiaries live in their homes and communities while avoiding costly and 
potentially disruptive facility-based care.  Over half of all spending on Medicaid long-term services and supports is now 
for home and community based services (HCBS), exceeding Medicaid spending on institutional services.  Without 
appropriate safeguards and controls, patients receiving care in non-institutional settings may be susceptible to fraud, 
abuse, or neglect.  OIGs examinations of HCBS programs have revealed gaps in policies and controls to protect patients.  
For example, during this reporting period, OIG identified troubling compliance issues with requirements for monitoring 
and reporting critical incidents involving developmentally disabled Medicaid beneficiaries at group homes in 
Massachusetts and Connecticut.  
HHHHSS  OOIIGG  SSeemmiiaannnnuuaall  RReeppoorrtt  ttoo  CCoonnggrreessss            ||            AApprriill  11,,  22001166    SSeepptteemmbbeerr  3300,,  22001166   iiii Also during this reporting period, OIG released a data brief on common characteristics in home health fraud cases.   
This data brief identified over 500 home health agencies and 4,500 physicians as outliers on multiple characteristics 
OFFICE OF  
commonly found in OIG-investigated cases of home health fraud.  Additionally, this past June, 350 OIG agents 
INSPECTOR  
participated in the Health Care Fraud Strike Forces largest national health care fraud takedown, which involved 
GENERAL
approximately $900 million in false billings and charges against 301 individuals, many of whom were home health  
and HCBS providers.  
Both the data brief and Strike Force takedown employed advanced data analytics to target and identify potential fraud 
and abuse affecting HHS programs and beneficiaries.  OIG continues to expand its use of data analytics to strengthen 
oversight efforts.  Further, OIGs work highlights the critical role that complete, accurate, timely, and secure data must 
play in strengthening the performance of HHS programs.  During this reporting period, OIG issued reports recommending 
that CMS improve Medicare and Medicaid provider data systems and testified before Congress about these 
recommendations.  Additionally, OIG published reports on data and system security, examining, among other things, 
CMSs wireless networks and health insurance exchanges.  
This Semiannual Report to Congress, along with our Top Management and Performance Challenges facing the 
Department, outlines many areas of improvement requiring sustained Department attention.  Program integrity must 
be a top priority as HHS programs grow in size and complexity and incorporate new paradigms focused on value, quality, 
and patient-centered care.  Since its 1976 establishment, OIG has worked collaboratively with its partners to protect 
and oversee HHSs vital health and human services programs.  The achievements of this office would not be possible 
without the dedication and professionalism of OIGs employees.  Once again, I would like to express my appreciation  
to Congress and to the Department for their sustained commitment to the important work of our office.
Daniel R. Levinson 
Inspector General 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  iii  
ns
ot
n
i HHS OIGS SEMIANNUAL REPORT TO CONGRESS (Semiannual Report) describes OIGs work on 
te
a identifying significant problems, abuses, deficiencies, remedies, and investigative outcomes relating to the administration 
m
z of HHS programs and operations that were disclosed during the reporting period.  In the highlights section below, we 
ih present OIG expected recoveries, criminal and civil actions, and other statistics as a result of our work for the entire  
n
s FY 2016.  We also highlight in this section some of our work completed during this semiannual reporting period,  
a
i April 1, 2016, to September 30, 2016.     
gl
p
r
m
O OIG Numbers At-A-Glance
 o
G For FY 2016, OIG reported expected recoveries of more than $5.66 billion consisting of nearly $1.2 billion in audit 
c
receivables1 and about $4.46 billion in investigative receivables.2  The investigative receivables include about $953 million 
Ic
O in non-HHS investigative receivables, resulting from our work in areas such as the States shares of Medicaid restitution. 
A
  Also during FY 2016, OIG reported 844 criminal actions against individuals or entities that engaged in crimes against HHS 
r
programs.  Additionally, OIG reported 708 civil actions, which include false claims and unjust-enrichment lawsuits filed in 
u
Federal district court, CMP settlements, and administrative recoveries related to provider self-disclosure matters.  Our 
O
CMP recoveries have increased almost five-fold over the past 3 years.  We also reported exclusions of 3,635 individuals 
  and entities from participation in Federal health care programs.
f
o
 
Health Care Fraud Strike Force Teams and Other Enforcement Actions 
s
t
h The Health Care Fraud Prevention and Enforcement Action Team (HEAT) was started in 2009 by HHS and DOJ to 
g strengthen programs and invest in new resources and technologies aimed at preventing and combating health care  
i fraud, waste, and abuse.  HEAT has continued to identify and hold accountable those who seek to defraud Medicare  
l
h and Medicaid.  Health Care Fraud Strike Force teams, a key component of HEAT, coordinate law enforcement operations 
conducted jointly by Federal, State, and local law enforcement entities.  The teams have a record of successfully analyzing 
g
data to quickly identify, investigate, and prosecute fraud.  
i
H
1   Audit receivables derive from OIG audits in which there were questioned costs and HHS program officials have agreed those questioned costs 
should not be charged to the Federal Government.  Questioned costs relate to expenditures that OIG found in their audits were not support-
ed by adequate documentation or because the expenditure was unnecessary or unreasonable. 
2  Investigative receivables are expected recoveries from criminal actions, civil and administrative settlements, civil judgments, or administrative 
actions that resulted wholly or in part from an OIG investigative activity. This does not represent actual collections but rather the amount of 
money that was ordered or agreed upon to be returned or paid to HHS and other Federal, State, and private individuals and entities.
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eAAsppsrr  ii ll    11 |,,    22   00 A11p66  ril   SS1ee, pp20ttee1mm6 bb eeSrre  33p00t,,e  22m00b11e66r   30, 2016  iivviv The Strike Force model operates in Miami, Florida; Los Angeles, California; Detroit, Michigan; southern Texas; Brooklyn, 
New York; southern Louisiana; Tampa, Florida; Chicago, Illinois; and Dallas, Texas.  During FY 2016, Strike Force efforts 
HIGHLIGHTS  
resulted in the filing of charges against 255 individuals or entities, 207 criminal actions, and $321 million in investigative 
OF OUR  
receivables.  Below are examples of our Strike Force efforts during this semiannual reporting period: 
ACCOMPLISHMENTS
Largest National Health Care Fraud Takedown Results in Charges Against 301 Individuals
In June 2016, the Health Care Fraud Strike Force led an unprecedented nationwide sweep in 36 Federal districts, with the 
assistance of 24 State Medicaid Fraud Control Units (MFCU).  The sweep resulted in criminal and civil charges against 301 
individuals, including 61 doctors, nurses, and other licensed medical professionals, for their alleged participation in health 
care fraud schemes involving approximately $900 million in false billings.  For more information on this takedown, visit 
our Strike Force website at https://oig.hhs.gov/fraud/strike-force/highlights.html?width=600&height=540.
Home Health Agency Owner Sentenced to 20 Years in Prison for Falsely Billing Medicare
Khaled Elbeblawy was the owner and manager of three Miami-area home health agencies.  According to evidence 
presented at trial, Elbeblawy and his co-conspirators purported to provide home health services to Medicare 
beneficiaries, which were not medically necessary and often not provided.  Elbeblawy and his co-conspirators paid 
kickbacks to doctors, patient recruiters, and staffing groups in return for referring beneficiaries to the home health 
agencies.  Elbeblawy was convicted of conspiracy to commit health care fraud and wire fraud and conspiracy to defraud 
the United States and pay health care kickbacks.  He was sentenced to 20 years in prison and ordered to pay $36.4 million 
in restitution, joint and several.    
Quality of Care
As Americans continue to live longer and with more chronic medical conditions, it is important that our Medicare and 
Medicaid beneficiaries, some of whom are our most vulnerable citizens, receive high-quality health care.  OIG endeavors 
to ensure that providers offer HHS beneficiaries adequate quality care in the appropriate setting.  The following are 
examples of our quality of care work during this semiannual reporting period:    
Connecticut and Massachusetts Critical Incident Reporting
We are performing reviews in several States in response to a congressional request concerning a number of deaths and 
cases of abuse of developmentally disabled residents of group homes.  We found that Connecticut and Massachusetts 
did not comply with Federal waiver and State requirements for critical incidents involving developmentally disabled 
Medicaid beneficiaries living in group homes.  A critical incident is any actual or alleged event or situation that creates a 
significant risk of substantial or serious harm to the physical or mental health, safety, or well being of a beneficiary.  
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 A5p r iMl 1a,r 2ch01 361 , 2 S0e1p6t e mber 30, 2016   v v Connecticut did not adequately safeguard 137 of 245 developmentally disabled Medicaid beneficiaries and Massachusetts 
did not adequately safeguard 146 out of 334 beneficiaries because the systems of reporting and monitoring critical 
HIGHLIGHTS  
incidents did not work as expected.  Neither State ensured that: (1) group homes reported all critical incidents to the 
OF OUR  
appropriate agencies; (2) data on all critical incidents were obtained, analyzed, or reported; and (3) all reasonable 
ACCOMPLISHMENTS
suspicions of abuse or neglect were reported.  Connecticut also did not ensure that group homes always reported 
incidents at the correct severity level.  Both States concurred with our recommendations. 
West Carroll Care Center Did Not Always Follow Care Plans for Residents Who Were Later Hospitalized with Potentially  
Avoidable Urinary Tract Infections 
We found that the nursing home West Carroll Care Center did not always provide services to its residents in accordance 
with their care plans, as required by Federal regulations, before they were hospitalized with urinary tract infections.  
Specifically, the Nursing Home staff did not monitor and document residents hydration status, monitor and document 
residents conditions, or include appropriate progress notes for residents required by their care plans.  West Carroll 
agreed to implement its newly developed policies and procedures requiring that its nursing staff follow residents care 
plans and the director of nursing or a designee conduct reviews to ensure that the nursing staff follows residents care 
plans.  West Carroll stated that it has implemented corrective actions.
Prescription Drugs
Part D is the fastest growing component of the Medicare program, and Medicaid expenditures for prescription drugs are 
also increasing, influenced by Medicaid expansion and increasing expenditures for expensive specialty drug costs.  HHSs 
oversight of its prescription drug programs faces numerous challenges, affecting beneficiary and community safety and 
the integrity of the benefit itself.  In addition, pharmaceutical fraud and drug diversion are also major concerns on the 
rise.  The following are examples of our prescription drug work during this semiannual reporting period: 
High Part D Spending on Opioids and Substantial Growth in Compounding Drugs Raise Concerns
Medicare Part D spending for commonly abused opioids exceeded $4 billion in 2015, and spending for compounded 
topical drugs increased more than 3,400 percent since 2006.  This data brief builds on OIGs June 2015 data brief, which 
described trends in Part D spending and identified questionable billing by pharmacies.  It updates information on 
spending for commonly abused opioids and provides data on the dramatic growth in spending for compounded drugs.  
OIG will c ontinue to conduct investigations and reviews to address the ongoing problems created by opioid abuse and 
the emerging problems linked to compounded drugs.  The Centers for Medicare & Medicaid Services (CMS) has taken 
steps to combat the problems associated with commonly abused opioids, such as identifying outlier prescribers.  However, 
the data brief concluded that CMS needs to take additional action, including fully implementing OIGs previous 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016   vi recommendations.  CMS also needs to assess the implications of the compounded drug trends identified in this  
data brief and take action where needed to protect the integrity of the program.
HIGHLIGHTS  
OF OUR  
Recommendation Followup:  CMS Should Address Medicares Flawed Payment System for DME Infusion Drugs
ACCOMPLISHMENTS
This review, following up on an earlier recommendation, investigated the impact of the current Part B payment 
methodology on provider reimbursement rates for two vital drugs:  pump administered insulin and milrinone lactate.   
We found that in 2015 Medicare paid suppliers 65 percent less than their cost for pump-administered insulin  hindering 
beneficiary access to the drug.  Using the same reimbursement methodology, Medicare paid suppliers of milrinone 
lactate, an infusion drug used to treat congestive heart failure, 20 times the drugs cost, thereby creating incentives for 
overutilization and improper billing.  Therefore, OIG continued to recommend that CMS take action to ensure that 
payment amounts for infusion drugs more accurately reflect provider acquisition costs.
Pharmaceutical Company Enters into $784.6 Million Settlement Agreement
Wyeth Inc. and Pfizer Inc. (the current owner of Wyeth) reached a $784.6 million settlement agreement with the United 
States to resolve allegations that Wyeth reported false pricing information and underpaid rebates that were due under 
the Medicaid drug rebate program.  The Government alleged that Wyeth failed to report deep discounts that it offered  
to hospitals for bundled sales of oral and intravenous versions of the drug Protonix.  This conduct allegedly led Wyeth to 
report false pricing information to CMS and underpay rebates due to the States.   
Provider Enrollment Safeguards and Oversight
To ensure that Medicare and Medicaid can continue to serve our Nations most vulnerable populations well into the 
future, it is critical to protect the financial integrity of these programs.  One way to protect programs is through strong 
enrollment safeguards and robust ownership disclosure requirements.  These forms of provider verification can fully 
identify information regarding the providers with whom HHS does business and can prevent ineligible providers from 
ever entering the Medicare or Medicaid programs.  Strong provider safeguards at the beginning of the enrollment 
process, along with ongoing verification throughout to ensure that enrolled providers continue to meet Medicare and 
Medicaid requirements, allow CMS to better protect beneficiaries from harm and reduce to improper payments.
OIG examined both provider enrollment screenings and provider ownership databases in the Medicare and Medicaid 
programs and found that these screening tools can be effective mechanisms to ensure that illegitimate providers do not 
participate in either the Medicare or Medicaid programs, and to ensure that ineligible or disenrolled providers do not 
engage in fraudulent or abusive activities.  CMS concurred with all OIG recommendations in all four reports analyzing 
provider screening and provider ownership disclosure (see below).  The following are examples of our most recent 
provider enrollment work during this semiannual reporting period:
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 A5p r iMl 1a,r 2ch01 361 , 2 S0e1p6t e mber 30, 2016   viivii   Enhanced Enrollment Screening of Medicare Providers:  Early Implementation Results:  We found that CMS needs  
to strengthen implementation of its new enhanced enrollment screening tools, which are intended to prevent 
HIGHLIGHTS  
illegitimate providers from enrolling in Medicare.
OF OUR  
  Medicare:  Vulnerabilities Related to Provider Enrollment and Ownership Disclosure:  We found vulnerabilities that 
ACCOMPLISHMENTS
could allow potentially fraudulent providers to enroll in the Medicare program and limit CMSs ability to provide 
adequate oversight. 
  Medicaid:  Vulnerabilities Related to Provider Enrollment and Ownership Disclosure:  We found that few  
State Medicaid programs requested that providers disclose all Federally required ownership information, that  
14 State Medicaid programs reported that they did not verify the completeness or accuracy of provider ownership 
information, and that 14 State Medicaid programs reported that they did not check all required exclusions 
databases, which could allow providers with excluded owners to enroll in Medicaid. 
  Medicaid Enhanced Provider Enrollment Screenings Have Not Been Fully Implemented:  We found that State 
implementation of risk-based screening for Medicaid providers is incomplete, and that screening substitution  
and fingerprint-based criminal background checks remain challenges. 
False Billings/Improper Payments
HHS policies or practices sometimes result in inefficiencies when unintended loopholes or other inherent problems  
invite exploitation or hinder consistent payment determinations.  Improper payments and false billings occur when  
the programs do not effectively prevent, deter, identify, or address inappropriate and excessive billing by providers  
and suppliers.  The following are examples of our improper payment work during this semiannual reporting period:
Medicare Improperly Paid Millions of Dollars for Unlawfully Present Beneficiaries for 2013 and 2014
In response to a congressional request regarding improper payments to unlawfully present beneficiaries, we found that 
when CMSs data systems indicated that at the time a claim was processed the beneficiary was unlawfully present, CMS 
followed its policies and procedures to prevent payment.  However, when CMSs data systems did not indicate until after 
a claim had been processed that a beneficiary was unlawfully present, CMS did not follow its policies and procedures to 
detect and recoup payment.  CMS determined that beneficiaries were liable for these improper payments, but it did not 
notify Medicare contractors to initiate recoupment activities.  CMS concurred with our recommendations. 
HIV Clinic Owner Ordered to Pay $12.2 Million in Restitution for Health Care Fraud
Jorge Juvier was the owner and operator of multiple HIV/AIDS clinics in New York that purportedly provided injection and 
infusion treatments to Medicare-eligible HIV/AIDS patients.  According to court documents, however, these clinics were, 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016   viii in reality, health care fraud mills.  As part of the scheme, Juvier and his co-conspirators paid patients cash kickbacks for 
coming to the clinics; coached patients on lying to clinic doctors to enable fraudulent billing; and billed Medicare for 
HIGHLIGHTS  
medications that were never administered, administered at incorrect dosages, or were medically unnecessary.  Juvier was 
OF OUR  
sentenced to over 5 years in prison and ordered to pay $12.2 million in restitution, joint and several, for his guilty plea to 
ACCOMPLISHMENTS
conspiracy to commit health care fraud.
Grants Oversight
HHS is the largest grant-making organization in the Federal Government, with more than $400 billion awarded in FY 2016.  
Responsible stewardship of these program dollars is vital to public health and well-being.  Operating a financial management 
and administrative infrastructure that employs appropriate internal controls to minimize risk and protect resources remains 
a challenge for HHS.  The following are examples of our grants oversight work during this semiannual reporting period:
More Effort is Needed to Protect the Integrity of the CCDF Block Grant Program
Past work on the Child Care and Development Fund (CCDF) block grant program identified fraud, found improper 
payments, and exposed health and safety concerns at childcare facilities.  This recent report focused on how States and 
the Administration for Children and Families (ACF) ensure the integrity of the CCDF block grant program and the results 
of States program integrity activities.  This review found that States differed in the scope of their CCDF program integrity 
activities and varied substantially in the degree to which they conducted specific program integrity activities.  Not all 
States performed important antifraud activities, and few States notified ACF and other States about suspected fraud.  ACF 
does not have a process to ensure that States carry out planned program integrity activities nor does it collect information 
about the results of these activities.  ACF concurred with all of our recommendations. 
CDC Did Not Award Presidents Emergency Plan for AIDS Relief Funds for 2013 in Compliance with Applicable HHS Policies 
We found that the Centers for Disease Control and Prevention (CDC) did not award Presidents Emergency Plan for  
AIDS Relief (PEPFAR) funds for FY 2013 in compliance with HHS and internal policies.  We sampled 30 Funding Opportunity 
Announcements (FOAs) and found that, in some of the CDC FOA reviews that culminated in awards, CDC did not comply 
with one or more HHS or internal policies. As a result, CDC did not always adequately document its funding decisions to 
award $1.9 billion over the 5-year project period, may have considered applications that it should not have considered, 
and sometimes treated applicants inconsistently.  CDC concurred with our recommendations that it: (1) conduct quality 
assurance reviews of FOAs and funded grant applicant information to monitor compliance with HHS and internal policies 
when awarding PEPFAR funds and (2) address specific deficiencies that we identified in our review.
HHS OIG SemiaHnHnSu aOlI RGe Speomrti aton nCuoanl gRreepsso r  t    t|o     C  oOncgtorebsesr   1   ,  |2  0   1 A5p r iMl 1a,r 2ch01 361 , 2 S0e1p6t e mber 30, 2016   ixix Health Information Technology
HIGHLIGHTS  
In support of its mission and operations, HHS maintains and uses expanding amounts of sensitive information.  Complete, 
OF OUR  
accurate, and timely data can help ensure efficient operations of HHS and its programs, as well as support proactive 
ACCOMPLISHMENTS
program oversight.  Similarly, the American health care system increasingly relies on health information technology 
(health IT) and the electronic exchange and use of health information.  Health IT, including electronic health records 
(EHRs), offers opportunities for improved patient care, more efficient practice management, and improved overall public 
health.  However, HHS continues to face a number of significant challenges in this information-rich environment.  The 
following are examples of our health IT work during this semiannual reporting period:
Hospitals Largely Reported Addressing Requirements for EHR Contingency Plans
This evaluation provides information about the status of hospitals contingency plans in light of evolving threats, including 
cyberattacks such as ransomware, to their electronic health information systems.  We found that almost all hospitals 
reported having written EHR contingency plans, and most reported that their plans addressed four Health Insurance 
Portability and Accountability Act (HIPAA) requirements as well as recommended practices.  This review provides baseline 
information on hospitals contingency plans at a time when awareness of cybersecurity threats is growing, and reinforces 
previous OIG recommendations to the Office for Civil Rights (OCR) concerning its audit program, among others.   
Public Summary Report:  Wireless Penetration Test of Centers for Medicare & Medicaid Services Data Centers
We performed a wireless penetration test of select CMS Data Centers and facilities to determine whether CMSs security 
controls over its wireless networks were effective.  We found that, although CMS had security controls that were effective 
in preventing certain types of wireless cyberattacks, we identified four vulnerabilities at selected CMS Data Centers  
and facilities in security controls over its wireless networks.  The vulnerabilities were collectively and, in some cases, 
individually significant.  Although we did not identify evidence that the vulnerabilities had been exploited, exploitation 
could have resulted in unauthorized access to and disclosure of personally identifiable information, as well as disruption 
of critical operations.  In addition, exploitation could have compromised the confidentiality, integrity, and availability of 
CMSs data and systems.  We promptly shared detailed information with CMS about our preliminary findings.  CMS 
concurred with our recommendations that it improve its security controls to address the wireless network vulnerabilities 
we identified.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016   x     
ns
ig
 
n
n
i
o
r
ia
t
ae
pH
i 
cl
a
i
tn
r
o
a
Pi Sept 28, 2016 Sept 14, 2016  May 24, 2016
s
 s
G Abhijit Dixit, Special   Gloria Jarmon, Deputy  Ann Maxwell, Assistant 
e
Agent in OIGs Office of  Inspector General for Audit  Inspector General for 
Ir
Og Investigations, testified  Services, testified before  Evaluation and Inspections, 
n before the House  the House Committee on  testified before the House 
Committee on Ways and  Energy and Commerce:   Committee on Energy and 
o
Means:  Subcommittee   Subcommittee on Oversight  Commerce: Subcommittee 
C
on Oversight: Health   and Investigations and  on Oversight and 
Care Fraud Investigations Subcommittee on Health:  Investigations: Medicare 
The Affordable Care   and Medicaid Program 
Act on Shaky Ground:  Integrity: Combatting 
Outlook and Oversight Improper Payments and 
Ineligible Providers
HHHHSS  OOIIGG  SSeemmiiaannnnuuaall  RReeppoorrtt  ttoo  CCoonnggrreessss            ||            AApprriill  11,,  22001166    SSeepptteemmbbeerr  3300,,  22001166   xixi s
t
n
e
t
n
Centers for Medicare & Medicaid Services.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 1 
o
C
Legal and Investigative Activities Related to Medicare and Medicaid .  .  .  .  .  .  .20
 
f
o Public Health Agencies Reviews and Enforcement Activities    .  .  .  .  .  .  .  .  .  .  .34
 
e
Human Services Agencies Reviews and Enforcement Activities .  .  .  .  .  .  .  .  .  .38
l
b
Other HHS-Related Reviews and Investigations .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  4.3
a
T
Appendixes  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4  .8
Appendix A.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  4. 8 
Appendix B   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  5. 2 
Appendix C    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  5. 9 
Appendix D.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  6. 1 
Appendix E    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  6. 4 
Appendix F    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  6. 6 
HHHHSS  OOIIGG  SSeemmiiaannnnuuaall  RReeppoorrtt  ttoo  CCoonnggrreessss            ||            AApprriill  11,,  22001166    SSeepptteemmbbeerr  3300,,  22001166   xxiiii   
ss
mn
o ACA  Patient Protection and Affordable Care Act FY  fiscal year
y
i
nt ACF  Administration for Children and Families GAO  General Accountability Office
a
o
ri CDC  Centers for Disease Control and Prevention HHS  Department of Health and Human Services
v
c
e CIA  corporate integrity agreement HIPAA   Health Insurance Portability and Accountability 
A
r Act 
 b CHIP   Childrens Health Insurance Program
d
b HRSA  Health Resources and Services Administration
e CMP  civil monetary penalty
A
t MAC  Medicare Administrative Contractors 
c  CMS  Centers for Medicare & Medicaid Services
d
e Marketplaces  health insurance exchanges
ln CY  calendar year
e MFCU  Medicaid Fraud Control Unit
a
DME  durable medical equipment
S
NIH  National Institutes of Health
DOJ  Department of Justice
OCR  Office of Civil Rights
EHR  electronic health record
OIG  Office of Inspector General
FBI  Federal Bureau of Investigation
OMB  Office of Management and Budget
FDA  Food and Drug Administration
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eAAsppsrr  ii ll    11 |,,    22   00 A11p66  ril   SS1ee, pp20ttee1mm6 bb eeSrre  33p00t,,e  22m00b11e66r   30, 2016  xixxiiiiiiii    
ens
roe
aic The Medicare Program In updating the two prior studies, we found that in 2015 
cti Medicare paid suppliers 65 percent less than their cost 
av
i
CMS Oversight of Medicare Contractor   for pump-administered insulin  hindering beneficiary 
dzr
access to the drug.  Using this same reimbursement 
eie Performance
n methodology, Medicare paid suppliers of milrinone 
MS
a lactate, an infusion drug used to treat congestive heart 
  CMS relies on contractors to administer the Medicare 
 gd failure, 20 times the drugs cost, thereby creating 
program and is responsible for overseeing the contractors 
r
oOrai performance.  Medicare contractors are responsible for  iTnhceernetifovrees,  fOorIG o vceornutitinluizeadti oton  raencdo mimmpreonpde trh baitll iCnMg.S   take 
administering more than one-half of a trillion dollars in 
fc
   benefits each year.  Medicare Administrative Contractors  action to ensure that Medicare payment amounts for 
sGi DME infusion drugs more accurately reflect provider 
d (MACs) process Parts A and B claims; Medicare Advantage 
r
Ie plans provide managed care services under Part C; Part  acquisition costs.  The agency could choose to seek a 
e
O legislative change that would require payments for DME 
tM D plans provide prescription drug coverage under Part 
infusion drugs to be based on average sales price.  CMS 
n D; and various benefit integrity contractors serve to 
  could also choose to use its existing authority to include 
e protect Medicare from fraud, waste, and abuse.
&
DME infusion drugs in the competitive bidding program 
C
as soon as possible.
Medicare Payments, Policies, and Practices
OEI-12-16-00340    September 2016
Recommendation Followup:  CMS Should Address  
Medicares Flawed Payment System for DME Infusion Drugs
Incomplete and Inaccurate Licensure Data Allowed  
This review, following up on an earlier recommendation, 
Some Suppliers in Round 2 of the Durable Medical 
built on previous OIG findings by illustrating the impact 
Equipment Competitive Bidding Program That Did  
of the current Part B payment methodology on provider 
reimbursement rates for two vital drugs:  pump  Not Have Required Licenses
administered insulin and milrinone lactate.  Unlike most  To address market changes and increasing Medicare 
other Part B drugs, Medicare payment amounts for DME  Part B expenditures for DME items, Congress required 
infusion drugs are still based on list prices  known as  CMS to implement a Medicare competitive bidding 
average wholesale prices  from 2003.  In February  program.  The Medicare Improvements for Patients and 
2013, OIG issued a report to CMS recommending that  Providers Act of 2008 contains a broad mandate 
the agency address payment issues associated with  requiring OIG to assess the process used by CMS to 
DME infusion drugs.  Because CMS had not taken steps  conduct the competitive bidding and subsequent pricing 
to address our recommendation, and payments  determinations that are the basis for the single payment 
continued to be misaligned with drug costs, OIG  amounts under Rounds 1 and 2 of the competitive 
revisited this issue in a 2015 report. bidding program.  In addition, we received congressional 
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eAAsppsrr  ii ll    11 |,,    22   00 A11p66  ril   SS1ee, pp20ttee1mm6 bb eeSrre  33p00t,,e  22m00b11e66r   30, 2016  111 requests to look into complaints that some suppliers  Medicare Compliance Review of Home Health VNA  
CENTERS FOR  
that were offered contracts for Round 2 of the  for 2011 and 2012
MEDICARE &  
competitive bidding program may not have met 
MEDICAID   This review was part of a series of reviews of home 
licensure requirements under the awarded contracts.  
health agencies (HHAs).  Using computer matching, data 
SERVICES
Our objective was to determine whether suppliers that 
mining, and data analysis techniques, we identified 
received contracts in Round 2 of the DME competitive 
certain types of home health claims that were at risk  
bidding program and about whom CMS received 
for noncompliance with Medicare billing requirements.  
complaints met licensure requirements. 
We determined that Home Health VNA (the Agency), 
We found that some contract suppliers in Round 2 of  located in Lawrence, Massachusetts, did not comply 
the Competitive Bidding Program had not met all of   with Medicare billing requirements for 105 of the 497 
the competitive bidding licensure requirements.   home health claims we reviewed.  As a result, the 
Specifically, of the 146 suppliers covered in our audit,   Agency received net overpayments of $314,000 for 
63 did not meet licensure requirements for some of   calendar years (CYs) 2011 and 2012.  Specifically, the 
the competitions for which they received a contract.   Agency incorrectly billed Medicare because beneficiaries 
Additionally, 14 suppliers need to be further researched  were not homebound; beneficiaries did not require 
by CMS and its contractors to determine if they met  skilled services; documentation from the certifying 
State licensure requirements.  CMS concurred with our  physicians was missing or insufficient to support the 
recommendations to:  (1) complete the research  services the Agency provided; or, in one instance, a 
required to determine whether 14 suppliers had a  claim contained an incorrect payment code. 
proper license and make a licensure determination 
We estimated that the Agency received overpayments 
regarding those suppliers, and (2) identify all applicable 
of at least $15.5 million for the audit period.  This 
State licensure requirements to prevent suppliers that 
overpayment amount includes claims with payment 
do not have all currently required licenses from 
dates outside of the 3-year recovery period.  The Agency 
receiving contracts in future rounds of the competitive 
did not concur with our recommendations to:  (1) 
bidding program.  CMS did not concur with our 
refund to the Medicare contractor $6.3 million in 
recommendation to work with State licensing boards to 
estimated overpayments for claims incorrectly billed 
better coordinate, identify, and maintain an accurate 
that are within the 3-year recovery period; (2) work with 
and complete licensure database of currently required 
the contractor to refund net overpayments outside of 
State licenses.
the 3-year recovery period, which we estimate to be 
$9.1 million for our audit period, in accordance with the 
A-05-13-00047    May 2016
60-day repayment rule; (3) identify claims in subsequent 
years that did not meet Medicare payment requirements 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  2 and refund any associated overpayments; and   $3.7 million over a 2-year period; (3) provide additional 
CENTERS FOR  
(4) take steps to strengthen its procedures. guidance to hospitals on the correct billing of mechanical 
MEDICARE &  
ventilation claims, emphasizing correct billing of claims 
MEDICAID   A-01-13-00518    August 2016 with a potential procedure length of 5 days, which could 
SERVICES
result in savings of an estimated $15.9 million over a 
2-year period; (4) review the remaining nonsampled 
Medicare Improperly Paid Hospitals for Beneficiaries   claims and recover the overpayments to the extent 
Who Had Not Received 96 or More Consecutive Hours   feasible and allowed under the law; and (5) direct the 
of Mechanical Ventilation Medicare contractors to review any claims for which 
procedure code 96.72 was used with a potential 
A previous OIG review found that hospitals did not fully 
procedure length of 5 days or fewer and recover any 
comply with Medicare requirements for billing inpatient 
overpayments after our audit period. 
claims with certain Medicare Severity Diagnosis-Related 
Groups (MS-DRGs) that required beneficiaries to have 
A-09-14-02041    June 2016
received 96 or more consecutive hours of mechanical 
ventilation.  A subsequent OIG review found that claims 
with longer lengths of stay were also at risk for billing 
Medicare Improperly Paid Millions of Dollars for Unlawfully 
errors.  Our objective was to determine whether 
Present Beneficiaries for 2013 and 2014  Mandatory Review 
Medicare payments to hospitals for inpatient claims 
with certain MS-DRGs that required 96 or more  The Medicare Access and CHIP Reauthorization Act of 
consecutive hours of mechanical ventilation complied  2015 (MACRA) requires CMS to establish policies and 
with Medicare requirements.  We found that, for 63 of  implement claims edits to ensure that payments are not 
the 200 claims we reviewed, Medicare payments to  made for Medicare services rendered to individuals who 
hospitals were assigned incorrectly to MS-DRGs 207   are not lawfully present in the United States (unlawfully 
and 870, resulting in $1.5 million in overpayments.  We  present). OIG must report on CMSs activities to ensure 
estimated that the hospitals received overpayments of  that Medicare payments are not made for unlawfully 
$3.7 million for claims with a potential procedure length  present beneficiaries. We found that, when CMSs data 
of 4 days or fewer and overpayments of $15.9 million  systems indicated that at the time a claim was processed 
for claims with a potential procedure length of 5 days.  the beneficiary was unlawfully present, CMS followed its 
policies and procedures to prevent payment. However, 
CMS concurred with our recommendations that it:    when CMSs data systems did not indicate until after a 
(1) ensure that the Medicare contractors recover the  claim had been processed that a beneficiary was unlawfully 
$1.5 million; (2) revise the length-of-stay edit to take  present, CMS did not follow its policies and procedures 
into account the mechanical ventilation start date for  to detect and recoup payment. CMS determined that 
claims with a potential procedure length of 4 days or  beneficiaries were liable for these improper payments, 
fewer, which could result in savings of an estimated   but it did not notify Medicare contractors to initiate 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  3 recoupment activities.  Our review included 14,530  screening tools.  We also found that CMSs enrollment 
CENTERS FOR  
claims that were paid on behalf of 481 unlawfully  data system does not contain the information needed 
MEDICARE &  
present beneficiaries with $9.3 million in associated  for effective oversight and evaluation of the enhancements 
MEDICAID  
Medicare payments during CYs 2013 and 2014. to the enrollment screening process.  Maintaining a 
SERVICES
robust enrollment process is an important tool in 
CMS concurred with our recommendations to direct its 
preventing Medicare fraud and ensuring the programs 
Medicare contractors, to the maximum extent feasible, 
integrity.  CMS concurred with all of our recommendations 
to initiate recoupment activities:  (1) against the 481 
to:  (1) monitor contractors to determine whether they 
unlawfully present beneficiaries on whose behalf 
are verifying information on enrollment and revalidation 
Medicare made $9.3 million in improper payments, and 
applications as required, (2) validate that contractors are 
(2) for improper payments made after our audit period 
appropriately considering site visit results when making 
on behalf of any beneficiaries who are detected to be 
enrollment decisions, (3) revise and clarify site visit 
unlawfully present. 
forms so they can be more easily used by inspectors to 
determine whether a facility is operational, (4) require 
A-07-15-01159    September 2016
the National Site Visit Contractor to improve quality-
assurance oversight and training of site visit inspectors, 
and (5) ensure that CMSs enrollment data system 
Enhanced Enrollment Screening of Medicare Providers:   
contains the complete and accurate data needed to 
Early Implementation Results 
execute and evaluate CMSs enrollment-screening 
To bill for services provided to beneficiaries, providers  enhancements. 
must enroll in Medicare and periodically revalidate this 
enrollment.  Effective enrollment screening is an  OEI-03-13-00050    April 2016
important tool in preventing Medicare fraud.  CMS has 
sought to enhance the enrollment screening process 
with new antifraud tools, such as placing providers in  Medicare: Vulnerabilities Related to Provider Enrollment  
risk categories; increasing site visits; requiring  and Ownership Disclosure
fingerprinting if applicable; implementing an Automated 
CMS can prevent inappropriate payments, protect 
Provider Screening system; and denying enrollment to 
beneficiaries, and reduce time-consuming and 
providers whose owners have existing Medicare 
expensive pay and chase activities by ensuring that 
overpayments.  Our study examined CMSs early 
providers that intend to engage in fraudulent or abusive 
implementation of new screening tools intended to 
activities are not allowed to enroll in Medicare.  For CMS 
prevent illegitimate providers from enrolling in 
to identify potentially fraudulent providers, as well as 
Medicare.
those that may be associated with excluded individuals 
or entities, providers must disclose accurate and timely 
We found that CMS needs to strengthen the 
information about their owners.  For selected providers, 
implementation of its new enhanced enrollment 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  4 we compared three sets of owner names:  (1) those on  compounded topical drugs increased more than 3,400 
CENTERS FOR  
record with CMS for Medicare enrollment purposes,   percent since 2006.  These striking trends raise concerns 
MEDICARE &  
(2) those submitted by providers directly to OIG, and   about misuse as well as fraud.  This data brief builds on 
MEDICAID  
(3) those on record with State Medicaid programs.   OIGs June 2015 data brief, Questionable Billing and 
SERVICES
When we compared names, we found that over three- Geographic Hotspots Point to Potential Fraud and Abuse 
quarters of Medicare providers had owner names on  in Medicare Part D, which described trends in Part D 
record with CMS that did not match those that providers  spending and identified questionable billing by pharmacies.  
submitted to OIG.  Further, nearly all providers in our  It updates information on spending for commonly 
review had owner names on record with CMS that   abused opioids and provides data on the dramatic 
did not match those on record with State Medicaid  growth in spending for compounded drugs.  OIG will 
programs.  Additionally, 2 of the 11 CMS contractors did   continue to conduct investigations and reviews to 
not check all required exclusions databases, which could  address the ongoing problems created by opioid abuse 
allow providers with excluded owners to enroll in the  and the emerging problems linked to compounded 
Medicare program.  Taken together, these findings  drugs.  CMS has taken steps to combat the problems 
reveal vulnerabilities that could allow potentially  associated with commonly abused opioids, such as 
fraudulent providers to enroll in the Medicare program  identifying outlier prescribers.  However, the data brief 
and limit CMSs ability to provide adequate oversight.   concluded that CMS needs to take additional action, 
including fully implementing OIGs previous 
CMS concurred with our four recommendations to:   
recommendations.  CMS also needs to assess the 
(1) review providers that submitted nonmatching owner 
implications of the compounded drug trends identified 
names and take appropriate action, (2) educate 
in this data brief and take action where needed to 
providers on the requirement to report changes of 
protect the integrity of the program.
ownership, (3) increase coordination with State Medicaid 
programs on the collection and verification of provider  OEI-02-16-00290    June 2016
ownership information in Medicare and Medicaid, and 
(4) ensure that its contractors check exclusions 
databases as required.  CMS is Taking Steps to Improve Oversight of Provider-Based 
Facilities, but Vulnerabilities Remain
OEI-04-11-00591    May 2016
We reviewed CMSs oversight of provider-based billing 
to ensure that only facilities that met provider-based 
High Part D Spending on Opioids and Substantial Growth   requirements were receiving higher payments allowed 
by the provider-based designation.  Under Medicare, 
in Compounding Drugs Raise Concerns
payments for services performed in provider-based 
Medicare Part D spending for commonly abused  
facilities are often more than 50 percent higher than 
opioids exceeded $4 billion in 2015, and spending for 
payments for the same services performed in a 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  5 freestanding facility.  This increased cost is borne by  Quality of Care and Beneficiary Access
CENTERS FOR  
both Medicare and its beneficiaries.  We found that, 
MEDICARE &  
nationwide, nearly half of hospitals owned at least one  Adverse Events in Rehabilitation Facilities:  National Incidence 
MEDICAID  
provider-based facility.  While CMS is taking steps to  Among Medicare Beneficiaries 
SERVICES
improve its ability to monitor provider-based billing, 
This report is part of a series on adverse events in health 
vulnerabilities associated with provider-based billing 
care settings, defined as harm resulting from medical 
remain.  In addition, more than three-quarters of the 50 
care.  Previous OIG work identified harm rates of about 
hospitals we reviewed that had not voluntarily attested 
30 percent in both acute-care hospitals and skilled 
for all their off-campus provider-based facilities owned 
nursing facilities, with an attendant toll on patient health 
off-campus facilities that did not meet at least one 
and taxpayers costs, the latter amounting to billions of 
requirement.  Finally, CMS reported challenges with the 
dollars annually.  This report extends our work by 
provider-based review process primarily because of 
evaluating care provided in rehabilitation (rehab) 
difficulties obtaining documentation.  These findings 
hospitals, which are post-acute providers that specialize 
demonstrate continued vulnerabilities associated with 
in intensive rehabilitative care for patients recovering 
provider-based billing. 
from illness, injury, or surgery.  We found that 29 
percent of Medicare beneficiaries experienced adverse 
CMS partially concurred with our first recommendation 
or temporary harm events during their rehab hospital 
to implement systems and methods to monitor billing 
stays, resulting in temporary harm, prolonged stays or 
by all provider-based facilities, but it did not concur with 
transfers to other hospitals, permanent harm, life-
our second recommendation to require hospitals to 
sustaining intervention, or death.  Physician reviewers 
submit attestations for all their provider-based facilities.  
determined that almost half (46 percent) of these 
CMS concurred with our other two recommendations  
events could have been prevented.  Nearly one-quarter 
to ensure that regional offices and MACs apply provider-
of the patients who experienced these harm events 
based requirements appropriately when conducting 
were transferred to an acute-care hospital for treatment, 
attestation reviews and take appropriate action against 
with an estimated cost to Medicare of more than  
hospitals and their off-campus provider-based facilities 
$7.7 million in a single month.  
that we identified as not meeting requirements.
We recommended that the Agency for Healthcare 
OEI-04-12-00380    June 2016
Research and Quality (AHRQ) and CMS raise awareness 
of patient safety issues in rehab hospitals and seek to 
reduce patient harm.  This effort should include:   
(1) creating a list of potential adverse events that occur 
in rehab hospitals and (2) adding information about 
potential adverse events in quality guidance to rehab 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  6 hospitals.  CMS and AHRQ concurred with our  these results demonstrate that home health fraud in 
CENTERS FOR  
recommendations.   Medicare continues to warrant scrutiny and attention 
MEDICARE &  
from OIG, its law enforcement partners, and CMS.
MEDICAID   OEI-06-14-00110    July 2016
SERVICES OEI-05-16-00031    June 2016
Nationwide Analysis of Common Characteristics in OIG  
Home Health Fraud Cases West Carroll Care Center Did Not Always Follow Care Plans  
for Residents Who Were Later Hospitalized With Potentially 
Home health has long been recognized as a program 
area vulnerable to fraud, waste, and abuse.  During our  Avoidable Urinary Tract Infections
review, we analyzed Medicare claims data from CYs  An OIG study found that in Federal FY 2011, nursing 
2014 and 2015 to assess the national prevalence and  homes transferred about one-quarter of their Medicare 
distribution of selected characteristics commonly found  beneficiary residents to hospitals for inpatient admissions.  
in OIG-investigated home health fraud cases.  We  Medicare spent $14.3 billion on these hospitalizations.  
identified home health agencies (HHAs) and supervising  One of the most frequent reasons for those hospitalizations 
physicians that were statistical outliers with regard to  was a urinary tract infection (UTI), a condition that a 
those characteristics in comparison to their peers  CMS study found is generally preventable and manageable 
nationally.  We also identified geographic hotspots  in the nursing home setting.  We reviewed West Carroll 
that were either statistical outliers compared to other  Care Center (the Nursing Home) because about  
areas nationally or contained significant numbers of  75 percent of its resident hospitalizations from  
HHA or physician outliers. October 1, 2011, through May 14, 2013, occurred 
because of conditions a CMS-sponsored study found to 
We identified a substantial number of providersover 
be associated with potentially avoidable hospitalizations.  
500 HHAs and over 4,500 physiciansthat were outliers 
A UTI was the most frequent reason for the hospitalizations.  
in comparison to their peers nationally with respect to 
We found that the Nursing Home did not always provide 
multiple characteristics commonly found in OIG-
services to its residents in accordance with their care 
investigated cases of home health fraud.  While our 
plans, as required by Federal regulations, before they 
analysis does not demonstrate that these providers 
were hospitalized with UTIs.  Specifically, the Nursing 
were engaged in fraudulent activity, they may warrant 
Home staff did not monitor and document residents 
further scrutiny.  We also identified 27 geographic 
hydration status, monitor and document residents 
hotspots in 12 Statesi.e., areas where characteristics 
conditions, or document residents urine appearances 
commonly found in OIG investigated cases of home 
as their care plans required. 
health fraud are prevalent.  Many of these hotspots  
are areas already recognized as having high rates of  During our audit, the Nursing Home developed policies 
Medicare fraud.  Along with OIGs existing body of work,  and procedures requiring that the director of nursing or 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  7 a designee conduct reviews to ensure that the nursing  ineligible and fraudulent providers, the Patient 
CENTERS FOR  
staff follows residents care plans.  We recommend that  Protection and Affordable Care Act (ACA) requires States 
MEDICARE &  
the Nursing Home implement its newly developed  to screen Medicaid providers according to their risk for 
MEDICAID  
policies and procedures requiring that its nursing staff  fraud, waste, and abuse using enhanced screening 
SERVICES
follow residents care plans and the director of nursing  procedures.  To help States meet the demands of 
or a designee conduct reviews to ensure that the  applying enhanced screening to all new and existing 
nursing staff follows residents care plans.  The Nursing  providers, CMS allows States to substitute Medicare or 
Home agreed with our findings and stated that it has  other State Medicaid agency or Childrens Health 
implemented corrective actions. Insurance Program (CHIP) screening results for their 
own.  This review determined the extent to which States 
A-06-14-00073    June 2016 have screened high- and moderate-risk providers using 
risk-based screening.  We found that State implementation 
of risk-based screening for Medicaid providers is 
The Medicaid Program  incomplete.  Most States report not having fingerprint- 
based criminal background checks while waiting for the 
Payments, Policies, and Practices requirement to take effect.  We also found that 
screening substitution is challenging for many States.  
To fund their Medicaid programs, States receive Federal 
CMS concurred with all of our recommendations to:   
grant awards that pay for the Federal share of their 
(1) assist States in implementing fingerprint-based 
Medicaid medical and administrative expenditures.  OIG 
criminal background checks for all high-risk providers,  
conducts audits on States withdraws of Federal Medicaid 
(2) assist States in overcoming challenges in conducting 
funds to determine whether a State submitted an 
site visits, (3) enable States to substitute Medicare 
improper claim for Federal reimbursement and, therefore, 
screening data by ensuring the accessibility and quality 
may owe money back to the Federal Government.  If a 
of Medicare data, (4) develop a central system where 
State disagrees with our recommendation to refund 
States can submit and access screening results from 
questioned costs identified in an audit, CMS still has  
other States, (5) strengthen minimum standards for 
the authority to recoup those costs.   
fingerprint-based criminal background checks and site 
visits, and (6) work with States to develop a plan to 
Medicaid Enhanced Provider Enrollment Screenings Have  
timely complete their revalidation screenings.
Not Been Fully Implemented
OEI-05-13-00520    May 2016
To bill for items and services provided to beneficiaries, 
providers must enroll, and periodically revalidate this 
enrollment, in Medicaid.  To protect Medicaid against 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  8 Medicaid:  Vulnerabilities Related to Provider Enrollment   (3) require State Medicaid programs to verify the 
CENTERS FOR  
& Ownership Disclosure completeness and accuracy of provider ownership 
MEDICARE &  
information, (4) ensure that State Medicaid programs 
MEDICAID   States can prevent inappropriate payments, protect 
check exclusions databases as required, (5) work with 
SERVICES beneficiaries, and reduce time-consuming and 
State Medicaid programs to educate providers on the 
expensive pay and chase activities by ensuring that 
requirement to report changes of ownership, (6) work 
providers that intend to engage in fraudulent or abusive 
with State Medicaid programs to review providers  
activities are not allowed to enroll in Medicaid.  Our 
that submitted nonmatching owner names and take 
review determined the extent to which States requested 
appropriate action, and (7) increase coordination with 
and verified provider ownership information and 
State Medicaid programs on collecting and verifying 
checked exclusions databases.  We found that few State 
provider ownership information in Medicaid and 
Medicaid programs requested that providers disclose all 
Medicare.
Federally required ownership information.  In addition, 
14 State Medicaid programs reported that they did not 
OEI-04-11-00590    May 2016
verify the completeness or accuracy of provider 
ownership information.  We also found that 14 State 
Medicaid programs reported that they did not check all 
Colorado Received Millions in Unallowable Bonus Payments
required exclusions databases, which could allow 
Under the Childrens Health Insurance Program 
providers with excluded owners to enroll in Medicaid.  
Reauthorization Act of 2009, Congress appropriated 
Additionally, we found that most providers in our review 
$3.225 billion for qualifying States to receive 
had names on record with State Medicaid programs that 
performance bonus payments (bonus payments) for 
did not match the names that providers submitted to 
Federal FYs 2009 through 2013 to offset the costs of 
OIG.  Further, nearly all providers in our review had 
increased enrollment of children in Medicaid.  We found 
names on record with State Medicaid programs that did 
that some of the bonus payments that Colorado 
not match those on record with CMS.  Taken together, 
received for FYs 2010 through 2013 were not allowable 
these findings reveal vulnerabilities that could allow 
in accordance with Federal requirements.  Colorado 
potentially fraudulent providers to enroll in State 
overstated its FYs 2010 through 2013 current enrollment 
Medicaid programs and that limit States ability to 
in its bonus requests to CMS because it included 
provide adequate oversight.  
individuals who did not qualify.  As a result, CMS 
CMS concurred with our seven recommendations to:   overpaid Colorado $38.3 million in bonus payments.  
(1) work with State Medicaid programs to identify and  Colorado did not concur with our recommendation that 
correct gaps in their collection of all required provider  it refund $38.3 million to the Federal Government. 
ownership information, (2) provide guidance to State 
A-04-15-08039    August 2016
Medicaid programs on how to verify the completeness 
and accuracy of provider ownership information,  
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  9 Washington State Claimed Federal Medicaid Reimbursement  clinical review are fully implemented and effective in 
CENTERS FOR  
for Inpatient Hospital Services Related to Treating Provider- prohibiting unallowable payments for inpatient hospital 
MEDICARE &  
services related to PPCs.  Washington did not concur 
Preventable Conditions
MEDICAID  
with our recommendation that it review paid claims 
SERVICES Provider-preventable conditions (PPCs) are certain 
before our audit period for certain inpatient hospital 
reasonably preventable conditions caused by medical 
services to determine whether payments should be 
accidents or errors in a health care setting.  Federal 
adjusted for any claims that contained PPCs that had 
regulations effective July 1, 2011, prohibit Medicaid 
certain POA codes or were missing POA codes.
payments for services related to PPCs.  We conducted 
this review to determine whether Washington State  A-09-14-02012    September 2016
(Washington) was in compliance with the new regulations 
for inpatient hospital services.  We found that Washington 
claimed Federal Medicaid reimbursement for inpatient  The Medicaid Program Could Have Achieved Savings  
hospital services related to treating certain PPCs.  From 
If Oregon Had Applied Medical Loss Ratio Standards  
July 2012 through December 2013, we identified 463 
Similar to Those Established by the Affordable Care Act 
claims that contained PPCs and: (1) a present-on-
admission indicator code (POA code) indicating that the  The objective of this review was to determine potential 
condition was not present on admission, (2) a POA code  Medicaid program savings if Oregon required its Medicaid 
indicating that the documentation in the patients  coordinated-care organization (CCO) plans to meet 
medical record was insufficient to determine whether  medical loss ratio (MLR) standards for its non-expansion 
the condition was present on admission, or (3) no POA  population similar to those established by the ACA.  The 
code.  Washington did not determine the unallowable  ACA set a standard for the amount of premium revenue 
portion of $18.3 million ($10.8 million Federal share)  that certain commercial health insurers and Medicare 
that was for services related to treating PPCs and   Advantage plans can spend on costs other than health-
should not have been claimed for Federal Medicaid  care-related expenses, which is known as the MLR.  
reimbursement.  We set aside this amount for  Insurers that do not meet these standards must pay 
resolution by CMS and Washington. rebates.  Some States have applied similar standards to 
their contracts with Medicaid managed-care organizations.  
Washington concurred with our recommendations that  The Federal Government is entitled to the Federal share 
it work with CMS to determine what portion of the  of the net amount recovered by a State with respect to 
$10.8 million claimed was unallowable for Federal  its Medicaid program.
Medicaid reimbursement and refund to the Federal 
Government the unallowable amount; refund to the  We determined that Medicaid could have saved $10.1 
Federal Government its share of any unallowable  million ($6.4 million Federal share) during CY 2014 if 
amounts for those paid claims reviewed; and ensure  Oregon had required its Medicaid CCO plans to meet 
that its policy and procedure requiring a retrospective  MLR standards similar to those established by the ACA 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  10 for those individuals who did not enroll through the  suggest that CMS consider requiring that, to certify 
CENTERS FOR  
Medicaid expansion program.  Oregon concurred with  public expenditures as the States share of Medicaid 
MEDICARE &  
our recommendation that it incorporate MLR standards  expenditures, an entity be operated by a unit of government.
MEDICAID  
into its contracts with Medicaid CCO plans for its 
SERVICES non-expansion population.  A-06-16-08005    August 2016
A-09-15-02033    April 2016
Utah Claimed Unallowable Federal Reimbursement for Some 
Medicaid Physician-Administered Drugs
State Governments May Unduly Benefit Financially  
We conducted a review to determine whether States 
From Publicly Owned but Privately Operated Entities 
are complying with Federal Medicaid requirements for 
During our audit of Alabamas hospital certified public  billing manufacturers for rebates for physician-
expenditures (CPEs) program for FY 2010, we noticed  administered drugs.  For a covered outpatient drug to 
that Alabama had claimed, for FYs 2010 and 2011, more  be eligible for Federal reimbursement under Medicaids 
than $5 million in Federal funds related to CPEs for  drug rebate requirements, manufacturers must pay 
three hospitals that appeared to be private hospitals.   rebates to the States for the drugs.  States generally 
The three hospitals were owned but not operated by  offset the Federal share of these rebates against their 
State or local governments.  Alabamas definition of a  expenditures and bill the manufacturers for rebates to 
public hospital indicates that a facility only has to be  reduce the cost of drugs to the program.  However, 
owned by a public entity, regardless of whether the  previous OIG reviews found that States did not always 
facility is operated by a public entity or whether State or  bill and collect all rebates due for drugs administered  
local government funds are used in its operation.  As a  by physicians.  We found that Utah did not invoice 
result, Alabama received more than $5 million in Federal  manufacturers for rebates associated with $4.4 million 
funding by claiming CPEs from the three hospitals, even  in physician-administered drugs and $1.2 million that 
though no State or local government funding was used  did not have national drug codes in the utilization data 
to operate the hospitals. or may have been otherwise ineligible for Federal 
reimbursement. 
We are concerned that the Federal Government is 
matching funds from private entities with no true State  Utah concurred with our recommendations that it 
or local government funds involved and that State  strengthen its internal controls to ensure that all 
Governments can benefit financially from publicly  physician-administered drugs eligible for rebates are 
owned but privately operated entities because the  invoiced and that it work with CMS to determine and 
Federal Government has not provided a clear definition  refund the unallowable portion of Federal reimbursement 
of public funds or contributing public agency.  We  for physician-administered drugs.  Utah did not concur 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  11 with our recommendations that it refund to the Federal  institutions in response to our recommendation that it 
CENTERS FOR  
Government $4.4 million for claims for physician- refund to the Federal Government the $57.9 million in 
MEDICARE &  
administered drugs that were ineligible for Federal  improper supplemental payments made to the UT 
MEDICAID  
reimbursement and work with CMS to determine the  health institutions.
SERVICES
unallowable portion of the $1.2 million and refund  
that amount. A-06-11-00004    August 2016
A-07-14-06057    May 2016
New York Overpaid Certain Medicaid Mental Health  
Services Providers
Texas Did Not Always Calculate Physician Supplemental 
During a prior review of a Medicaid-funded mental 
Payments Made to the University of Texas Health Institutions 
health program in New York State, we observed that 
in Accordance With Federal and State Requirements  some providers were paid more than the Medicaid base 
Our objective was to determine whether the State  rate for certain services.  These providers participated in 
agency calculated supplemental payments made to the  the States Comprehensive Outpatient Program Services 
University of Texas (UT) health institutions in accordance  (COPS) and Community Support Program (CSP) programs 
with Federal and State requirements.  We determined  and, as program participants, received supplemental 
that the State agency did not always calculate  (add-on) payments subject to annual payment thresholds 
supplemental payments made to the UT health  in exchange for offering enhanced services to 
institutions in accordance with Federal and State  Medicaid beneficiaries.  During this review, we identified 
requirements.  Specifically, the supplemental payment  overpayments due to the Federal Government totaling 
calculations included overstated Medicare equivalent  $8.1 million (Federal share) from 2009 through 2012  
fees for claims that included payment modifiers and  for providers in New Yorks COPS and CSP programs.  
diagnostic test modifiers, Medicaid services that were  Although New York had credited to the Federal 
performed by ineligible providers, and Medicaid services  Government its share of reviewed overpayments that 
that did not have Medicare equivalent fees.  As a result,  New York identified, New York continues to work to 
the State agency claimed $57.9 million in unallowable  collect the $92 million in final report overpayments due 
supplemental payments made to the UT health institutions  the Federal Government and $27.4 million in preliminary 
from May 1, 2004, through September 30, 2007.  report overpayments for 2003 through 2008.  Further, 
New York said that $2.7 million due to the Federal 
Texas stated it would review the physician supplemental  Government in other overpayments made during this 
payment calculation, refund the Federal share of any  period were not collectable because of provider 
improper payments, and work with the UT health  bankruptcy or business closure. 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  12 New York agreed with our recommendations that it:    qualifications of vehicle safety and transport personnel 
CENTERS FOR  
(1) refund $8.1 million for COPS and CSP overpayments  could have jeopardized the health and safety of 
MEDICARE &  
for the period 2009 through 2012, (2) continue working  Medicaid beneficiaries. 
MEDICAID  
to collect the additional overpayments for the period 
SERVICES New Jersey generally agreed with our recommendation 
2003 through 2008 and return $27.4 million to CMS,  
that it improve its oversight and monitoring of its 
(3) identify any overpayments made between December 
Medicaid NEMT brokerage program by requiring the 
2012 and October 2013 and refund the applicable 
contractor to strengthen its procedures to ensure that:  
Federal share, and (4) exhaust all legal efforts to  
(1) vehicles used to transport Medicaid beneficiaries 
collect the $5.4 million ($2.7 million Federal share)  
meet New Jersey requirements, (2) transport personnel 
in overpayments that New York indicated were not 
are licensed and qualified, (3) prior authorization is 
collectable because of provider bankruptcy or  
obtained and medical necessity documented for 
business closure. 
beneficiaries who require certain transportation 
A-02-13-01021    June 2016 services, (4) transportation providers maintain required 
insurance coverages, (5) beneficiaries receive Medicaid-
eligible medical services on the date of transportation, 
New Jersey Did Not Adequately Oversee Its Medicaid  and (6) NEMT services are adequately documented.  
New Jersey did not directly agree or disagree with our 
Nonemergency Medical Transportation Brokerage Program
recommendation that it ensure that its contract with 
Medicaid pays for nonemergency medical transportation 
the transportation broker contains provisions that:  (1) 
(NEMT) services that a State determines to be necessary 
consider improper claims submitted by transportation 
for beneficiaries to obtain medical care.  Because OIG 
providers to the transportation broker when developing 
has consistently identified this area as vulnerable to 
future capitated rates paid by New Jersey and (2) 
fraud, waste, and abuse, OIG has conducted audits in 
provide a means for New Jersey to recoup funds from 
multiple States since 2006.  We selected New Jerseys 
the transportation broker when contract provisions and 
NEMT services program for review because, in 2009, 
State requirements are not meta measure that, if 
New Jersey transitioned from a fee-for-service program 
incorporated, could result in cost savings for Medicaid.
to one managed by a transportation broker.  We 
determined that New Jersey did not adequately oversee  A-02-14-01001    July 2016
its Medicaid NEMT brokerage program.  As a result, we 
estimated that 2,538,674 claims totaling $64.7 million 
did not comply with certain contract provisions and  Alabama Claimed Millions in Unallowable School-Based 
State requirements and 480,290 claims totaling  
Medicaid Administrative Costs
$11.3 million for services may not have complied.  In 
In prior reviews of school-based and community-based 
addition, providers noncompliance with certain 
administrative costs that States allocated to Medicaid 
contract and State requirements for the licensing and 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  13 using random moment sampling (RMS), we identified  administrative costs allocated to Medicaid, and (6) review 
CENTERS FOR  
significant overpayments.  As part of our Medicaid risk  school-based Medicaid administrative costs claimed 
MEDICARE &  
assessment, we noted that the Alabama Medicaid  after our audit period and refund unallowable amounts.
MEDICAID  
Agency (Alabama) did not have an approved public 
SERVICES assistance cost allocation plan (CAP).  However, for  A-04-13-00094    July 2016
Federal FYs 2010 through 2012, Alabama claimed 
school-based administrative costs, which are public 
assistance costs, totaling almost $150.5 million (almost  Alabama Did Not Comply With Federal and State 
$75.3 million Federal share).  We conducted this audit  Requirements for Claiming Medicaid Certified Public 
because of the significant amount that Alabama  Expenditures for Federal Fiscal Year 2010
claimed, its lack of an approved CAP, and our prior 
Public entities (e.g., public hospitals) may certify that 
findings related to costs that States allocated to 
they have spent funds on Medicaid items or services 
Medicaid using RMS. 
that are eligible for Federal matching funds.  These 
funds are referred to as certified public expenditures 
We found that the $150.5 million ($75.3 million Federal 
(CPEs) and may be claimed as the States share of 
share) that Alabama claimed in school-based Medicaid 
Medicaid expenditures.  The Alabama Medicaid Agency 
administrative costs for FYs 2010 through 2012 was 
(Alabama) made a $123.5 million adjustment to 
unallowable.  Alabama claimed these costs without 
Medicaid hospital CPEs in Federal FY 2011 that more 
submitting for Division of Cost Allocation review its 
than doubled the CPEs claimed for FY 2010.  We found 
public assistance CAP and certain amendments and, 
that Alabama did not comply with Federal and State 
consequently, without having an approved CAP.  Instead, 
requirements for claiming $209.5 million ($162.5 million 
Alabama claimed costs based on various versions of its 
Federal share) in CPEs for FY 2010.  Alabama incorrectly 
implementation guides and plans that were being 
claimed $27.5 million ($21.3 million Federal share) 
considered by and negotiated with CMS.  Alabama also 
because it made errors in its CPE calculation.  We are 
used statistically invalid RMS in allocating costs to 
setting aside the remaining $182 million ($141.2 million 
Medicaid, and it did not maintain adequate support to 
Federal share) Alabama claimed because it did not 
validate its sample results and related extrapolations. 
calculate the CPEs in accordance with the CMS-
Alabama generally disagreed with our recommendations  approved State plan.  Of that amount, $55.3 million 
that it:  (1) refund $75.3 million to the Federal Government,  ($42.8 million Federal share) resulted from Alabama 
(2) submit to CMS for review and approval its CAP and  inappropriately applying a market inflation factor  
amendments, (3) ensure that its CAP addresses the  to 2010 costs, which essentially increased those costs  
statistical validity issues we identified, (4) implement  to 2013 levels.
policies and procedures to ensure that its RMS complies 
Alabama partially concurred with our recommendation 
with Federal requirements for statistical validity, (5) 
that it work with CMS to determine whether any portion 
maintain adequate support for its school-based 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  14 of the $141.2 million in Federal share related to CPEs  developmentally disabled Medicaid beneficiaries living 
CENTERS FOR  
that were not calculated in accordance with the State  in group homes.  Connecticut did not adequately 
MEDICARE &  
plan should be refunded to the Federal Government,  safeguard 137 of 245 developmentally disabled 
MEDICAID  
particularly the $42.8 million Federal share associated  Medicaid beneficiaries living in group homes that we 
SERVICES
with the increase from the application of the market  reviewed, and Massachusetts did not adequately 
inflation factor.  Alabama did not concur with our  safeguard 146 out of 334.  Neither State ensured that: 
recommendation that it refund to the Federal  (1) group homes reported all critical incidents to the 
Government the $21.3 million that related to the errors  appropriate agencies; (2) data on all critical incidents 
Alabama made when calculating CPEs.  were obtained, analyzed, or reported; and (3) all 
reasonable suspicions of abuse or neglect were reported.  
A-06-15-00004    July 2016 Connecticut also did not ensure that group homes 
always reported incidents at the correct severity level.
Both States concurred with our recommendations that 
Quality of Care and Beneficiary Access
they work with the appropriate State agencies to:   
(1) train staff of those agencies and group homes on 
Connecticut Did Not Comply With Federal and State 
how to identify and report critical incidents and 
Requirements for Critical Incidents Involving Developmentally 
reasonable suspicions of abuse or neglect, (2) develop  
Disabled Medicaid Beneficiaries
a data-exchange agreement and related analytical 
procedures to ensure access to the Medicaid claims 
A-01-14-00002    May 2016
data to detect unreported and unrecorded critical 
incidents, (3) update Department of Developmental 
Also, Massachusetts Did Not Comply With Federal and State 
Services policies and procedures to clearly define and 
Requirements for Critical Incidents Involving Developmentally  provide examples of potential abuse or neglect that 
Disabled Medicaid Beneficiaries must be reported, and (4) ensure that any potential 
cases of abuse or neglect that are identified as a result  
A-01-14-00008    July 2016
of new analytical procedures are investigated as needed.  
Massachusetts concurred with our recommendation 
We are performing reviews in several States in response  that it develop and provide training for staff of the State 
to a congressional request concerning the number of  and group homes to ensure that action steps are 
deaths and cases of abuse of developmentally disabled  identified in the incident reports to prevent similar 
residents of group homes.  We found that Connecticut  critical incidents.
and Massachusetts did not comply with Federal waiver 
and State requirements for critical incidents involving 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  15 Health Information Technology West Virginia Made Incorrect Medicaid Electronic Health 
CENTERS FOR  
Record Incentive Payments to Hospitals 
MEDICARE &  
Arizona Made Incorrect Medicaid Electronic Health Record 
MEDICAID   A-03-14-00406    August 2016
Incentive Payments to Hospitals 
SERVICES
A-09-15-02036    August 2016
Medicare and Medicaid EHR incentive programs 
promote the adoption of EHRs.  As an incentive for using 
Also the following:
EHRs, the Federal Government makes payments to 
California Made Incorrect Medicaid Electronic Health Record  providers that attest to the meaningful use of EHRs.  
Because the incentive payment is calculated once and 
Incentive Payments to Hospitals 
then paid out in the future, incorrect incentive payments 
A-09-16-02004    September 2016  
mean that future payments will also be incorrect.  We 
audited eight States for varying time periods.
New Jersey Made Incorrect Medicaid Electronic Health Record 
Incentive Payments We found that Arizona made incorrect Medicaid EHR 
A-02-14-01009    August 2016   incentive payments that resulted in a net overpayment 
of $14.8 million, California made a net overpayment of 
Oklahoma Made Incorrect Medicaid Electronic Health Record  $22 million, New Jersey made a net overpayment of 
Incentive Payments to Hospitals  almost $2.3 million, Oklahoma made a net overpayment 
of $680,000, Ohio made a net overpayment of $524,000, 
A-06-15-00032     August 2016  
Washington State made incorrect EHR incentive 
Ohio Made Incorrect Medicaid Electronic Health Record  payments totaling $9.2 million, and West Virginia made 
incorrect EHR incentive payments totaling $296,000.  
Incentive Payments 
Pennsylvania made incentive payments in accordance 
A-05-13-00043    August 2016  
with Federal and State requirements. 
Pennsylvania Made Correct Medicaid Electronic Health 
New Jersey, Oklahoma, Ohio, Washington, and West 
Record Incentive Payments to Hospitals  Virginia concurred, acknowledged, or partially concurred 
A-03-15-00403    August 2016   with our recommendations that they refund to the 
Federal Government the Federal share received for the 
Washington State Made Incorrect Medicaid Electronic Health  net overpayments.  California, New Jersey, Ohio, 
Record Incentive Payments to Hospitals  Washington, and West Virginia concurred, acknowledged, 
or partially concurred with our recommendations that 
A-09-16-02015    September 2016 
they review and adjust, if needed, remaining incentive 
payments of the hospitals in our samples to account for 
the incorrect calculations and those of other hospitals 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  16 not included in our samples.  California and Washington  effective.  We found that, although CMS had security 
CENTERS FOR  
agreed or partially concurred with our recommendation  controls that were effective in preventing certain types 
MEDICARE &  
that they review supporting documentation to help  of wireless cyberattacks, we identified four vulnerabilities 
MEDICAID  
identify any errors in incentive payment calculations. at selected CMS Data Centers and facilities in security 
SERVICES
controls over its wireless networks.  The vulnerabilities 
Oklahoma did not concur or nonconcur with our 
were collectively and, in some cases, individually 
recommendations that it determine whether payment 
significant.  Although we did not identify evidence that 
adjustments are needed for hospitals not in our audit 
the vulnerabilities had been exploited, exploitation 
and refund the Federal share received for any 
could have resulted in unauthorized access to and 
overpayments identified and educate hospitals to 
disclosure of personally identifiable information, as well 
ensure that they follow Federal and State requirements 
as disruption of critical operations.  In addition, exploitation 
for calculating their incentive payments.  California 
could have compromised the confidentiality, integrity, 
disagreed with our recommendation that it refund the 
and availability of CMSs data and systems.  We promptly 
Federal share received for the overpayments.  Arizona 
shared detailed information with CMS about our 
did not agree with our findings, which led to our 
preliminary findings.  CMS concurred with our 
recommendations that it:  (1) refund $14.8 million  
recommendations that it improve its security controls to 
of the Federal share received for  net overpayments,  
address the wireless network vulnerabilities we identified.
(2) adjust remaining incentive payments of the hospitals 
in our audit to account for the incorrect calculations,   A-18-15-30400    August 2016
(3) review the calculations for the hospitals not included 
in our audit to determine whether payment adjustments 
are needed and refund to the Federal Government the  Public Summary Report:  Washington State Implemented 
Federal share received for any overpayments identified, 
Security Controls Over the Web Site and Database for Its 
(4) educate hospitals to ensure that they follow Federal 
Health Insurance Exchange but Could Improve Protection  
and State requirements for calculating their incentive 
of Personally Identifiable Information 
payments, and (5) review supporting documentation 
provided by all hospitals to help identify any errors in  Our objective was to determine whether the Washington 
their incentive payment calculations.  We did not have  Health Benefit Exchange (Washington marketplace) had 
any recommendations for Pennsylvania. implemented security controls to protect personally 
identifiable information on its website and database in 
accordance with Federal requirements.  We determined 
Public Summary Report:  Wireless Penetration Test  
that the Washington marketplace had implemented 
of Centers for Medicare & Medicaid Services Data Centers
many security controls, including policies and procedures, 
We performed a wireless penetration test of select   to protect personally identifiable information on its 
CMS Data Centers and facilities to determine whether  website and database.  However, it did not always 
CMSs security controls over its wireless networks were  comply with Federal requirements.  The Washington 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  17 marketplace had not adequately secured its website and  scans identified numerous weaknesses.  Although we 
CENTERS FOR  
database and had not performed a vulnerability scan in  did not identify evidence that the vulnerabilities had 
MEDICARE &  
accordance with Federal requirements.  In addition, the  been exploited, exploitation could have resulted in 
MEDICAID  
Washington marketplaces plan of action and milestones  unauthorized access to and disclosure of personally 
SERVICES
did not meet some of CMSs minimum requirements for  identifiable information, as well as disruption of critical 
protection of marketplace systems.  The Washington  marketplace operations.  The vulnerabilities were 
marketplace concurred with all our recommendations  collectively and, in some cases, individually significant 
that it implement our detailed recommendations that  and could have potentially compromised the integrity  
address the specific findings we identified.  of the marketplace.  
A-09-15-03005    June 2016 We recommended that MNsure implement necessary 
corrective actions to address the specific security 
vulnerabilities that we identified during this audit. 
Public Summary Report:  Information Technology Control 
A-06-15-00035    September 2016 
Weaknesses Found at the Minnesota Health Insurance 
Exchange 
Our objective was to determine whether MNsure,  The Department of Health and Human Services Security 
Minnesotas State-based marketplace, had implemented  Management Practices for Computer Systems With Access  
security controls to protect personally identifiable 
to Personally Identifiable Information
information on its website, database, and other 
HHS and its operating divisions (OPDIVs) have developed 
supporting information systems in accordance with 
logical access policies and practices based on the 
Federal and State requirements.  We determined 
National Institute of Standards and Technology 
MNsure had implemented security controls, policies, 
standards.  HHS and its OPDIVs use logical access 
and procedures intended to prevent vulnerabilities in its 
controls to access all covered systems.  HHS and its 
web applications (website), database, and other 
OPDIVs reported to us that multifactor authentication is 
supporting information systems.  However, it did not 
required by privileged users to access nearly all of its 
always comply with Federal and State IT requirements 
covered systems, which includes the use of a personal 
when it implemented those security controls, policies, 
identity verification card at the network/system level.  
and procedures, which increased MNsures risk that 
Seven of HHSs 588 (about 1 percent) covered systems 
personally identifiable information could have been 
do not require privileged users to provide additional 
exposed.  Specifically, MNsure had not formalized 
authentication to access those covered systems.  The 
procedures for analyzing and sharing information about 
majority of OPDIVs have developed policies and 
vulnerabilities and had vulnerabilities related to 
procedures to conduct inventories of software and 
penetration testing and website monitoring procedures.  
licenses associated with covered systems.  HHS and its 
Additionally, our website and database vulnerability 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  18 OPDIVs use a variety of tools to monitor and detect 
CENTERS FOR  
exfiltration and other threats.  All entities, including 
MEDICARE &  
contractors that provide services to HHS, are required to 
MEDICAID  
follow HHS information security management practices 
SERVICES
for all covered systems.
A-18-16-30150    August 2016
Hospitals Largely Reported Addressing Requirements  
for EHR Contingency Plans
Disruptions, such as natural disasters or technical 
malfunctions, can make EHRs unavailable to hospital 
staff.  Prior OIG work found that, for example, hospitals 
experienced substantial challenges responding to the 
effects of Superstorm Sandy, which included damage to 
health information systems and curtailed access to 
patient medical records.  More recently, cyberattacks on 
hospitals have similarly prevented or limited access to 
EHRs.  OCR enforces the HIPAA Security Rule, which 
requires all covered entities to have a contingency plan 
for responding to disruptions to electronic health 
information systems. 
This evaluation provides information about the status of 
hospitals contingency plans in light of evolving threats 
to their electronic health information systems.  We 
found that almost all hospitals reported having written 
EHR contingency plans and most reported that their 
plans addressed four HIPAA requirements as well as 
recommended practices.  This review provides baseline 
information on hospitals contingency plans and 
reinforces previous OIG recommendations to OCR 
concerning its audit program, among others.  
OEI-01-14-00570    July 2016
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  19   
sd
ei
a
i OIG INVESTIGATES ALLEGATIONS OF FRAUD,  funds awarded by CDC, National Institutes of Health 
tc
i waste, and abuse in all HHS programs.  Our largest body  (NIH), Substance Abuse and Mental Health Services 
vi
d of work involves investigating matters related to the  Administration, and other HHS agencies.  Under certain 
i
te Medicare and Medicaid programs, such as patient harm;  circumstances, OIG investigates noncustodial parents 
cM billing for services not rendered, medically unnecessary  who fail to pay court-ordered child support.  Additionally, 
A services, or upcoded services; illegal billing, sale,  OIG investigates allegations of employee misconduct, 
 d  diversion, and off-label marketing of prescription drugs;  whistleblower reprisals, and wrongdoing by HHS  
e and solicitation and receipt of kickbacks, including illegal  agency officials. 
n
v
payments to patients for involvement in fraud schemes 
ia One of the most common types of fraud perpetrated 
and illegal referral arrangements between physicians 
t
  against Medicare, Medicaid, and other Federal  
ae and medical companies.
health care programs involves filing false claims for 
gr
Specific case types include fraud schemes related to:  reimbursement.  False claims may be pursued under 
ia
t Federal and State criminal statutes and, when appropriate, 
c   controlled and noncontrolled prescription drugs, 
s
under the False Claims Act (FCA).  Depending on the 
ei   home health agencies and personal care services, 
d types of fraud or other violations involved, OIG 
ve   ambulance transportation,  investigations may culminate in criminal or civil court 
n
M   DME, and  judgments and decisions, administrative sanctions and 
I
  diagnostic radiology and laboratory testing.  decisions, and/or negotiated settlement agreements.  
 
d  Investigative outcomes take many forms, including 
o
n OIG also conducts investigations involving organized  incarceration, restitution, fines, penalties, forfeitures, 
t
a  criminal activity, including medical identity theft and  assessments, and exclusion of individuals or entities 
 d fraudulent medical schemes established for the sole  from participation in all Federal health care programs.  
le purpose of stealing Medicare dollars.  Investigators are  Frequently used exclusion and penalty authorities  
a
t seeing an increase in individuals, including both health  are described on our website at:  
ga
care providers and patients, engaging in these health  http://oig.hhs.gov/fraud/enforcement/cmp/. 
el
care fraud schemes.  Those who participate in these 
e
L
schemes may face heavy fines, jail time, and exclusion  From April 1, 2016, to September 30, 2016, we reported 
R
from participating in Federal health care programs.  381 criminal and 311 civil actions against individuals or 
entities that engaged in health-care-related offenses.  
In addition to investigating Medicare and Medicaid  We also reported over $1.62 billion in investigative 
fraud, OIG investigates fraud, waste, and abuse in other  receivables due to HHS and over $607.4 million in 
HHS programs, including ACF, Indian Health Service,  non-HHS investigative receivables, including civil and 
Health Resources and Services Administration (HRSA),  administrative settlements or civil judgments related  
and Administration for Community Living.  OIG also  to Medicare, Medicaid, and other Federal, State, and 
investigates potential misuse of grants and contracts  private health care programs. 
HHHHSS  OOIIGG  SSeemmiiaannnnuuaall  RReeppoorrtt  ttoo  CCoonnggrreessss            ||            AApprriill  11,,  22001166    SSeepptteemmbbeerr  3300,,  22001166   2200 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   The following are recently completed actions   and ordered to pay $5.9 million in restitution, joint  
and settlements organized by allegation or  and several.  Sanchez pleaded guilty and is awaiting 
RELATED TO  
subject type: sentencing.
MEDICARE AND  
MEDICAID Quality of Care Florida  Sandy De La Fe, Jose Teijeiro, and Michel 
Cabral co-owned Goldenway Pharmacy Discount, Inc. 
Kentucky  Dr. Jaime Guerrero was the owner and  (Goldenway), a retail pharmacy.  From October 2011 
operator of Advanced Pain Management.  According to  through May 2013, the defendants conspired to defraud 
court records, from November 2009 through May 2014,  Medicare by submitting false claims for prescription 
Dr. Guerrero distributed and dispensed narcotics to  drugs by using Medicare beneficiaries ID numbers and 
patients without a legitimate medical purpose and  forged doctors signatures for medication that was 
beyond the bounds of professional practice, leading to a  either unnecessary or not provided.  The conspirators 
patients death.  In addition, Dr. Guerrero falsely billed  also paid recruiters to entice Medicare beneficiaries to 
the health care benefit programs by submitting claims  fill their prescriptions at Goldenway.  De La Fe is a Cuban 
for office visits at a higher code than the services  national who had been an OIG Most-Wanted Fugitive 
provided.  Dr. Guerrero was sentenced to 8 years and   following his indictment in 2013 until his arrest in 
4 months in prison and ordered to pay $827,000 in  January 2016.  De La Fe was sentenced to 1 year and  
restitution for his guilty plea to conspiracy to unlawfully  10 months in prison and ordered to pay $2.8 million  
distribute and dispense Schedule II and III controlled  in restitution, joint and several, for his guilty plea to 
substances, health care fraud, and money laundering.   conspiracy to commit health care fraud.  Teijeiro and 
Cabral were previously sentenced to a combined  
16 years and 1 month in prison.
Pharmacy
Florida  From November 2012 through February 2015,  Home Health
Zuzette De La Rua and her husband, Angel Sanchez, 
owned and operated three pharmacies in Miami,  District of Columbia  Florence Bikundi and her 
Florida.  According to the investigation, Sanchez, De La  husband, Michael Bikundi, Sr., were the owners of the 
Rua, and others committed fraud by paying kickbacks   home health agency Global Healthcare, Inc.  According 
to patients and recruiters and for billing Medicare for  to evidence presented at trial, Florence fraudulently 
medications not delivered to Medicare beneficiaries.   gained approval as a provider in the Medicaid program.  
Maria Sabater received compensation for recruiting  From August 2009 through February 2014, the Bikundis 
patients to obtain pharmaceutical drugs at the  led a scheme to bill Medicaid for services that were not 
pharmacies.  De La Rua and Sabater pleaded guilty   provided, creating phony time sheets, patient files, and 
to conspiracy to commit health care fraud and were  employment files.  The Bikundis were sentenced for 
sentenced to a total of 6 years and 6 months in prison  health care fraud, money laundering, and other charges 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  21 LEGAL AND  
INVESTIGATIVE  
stemming from this scheme.  Florence was sentenced   in order for Medicare beneficiaries to qualify for and 
ACTIVITIES  
to 10 years in prison, while Michael was sentenced to   receive the wheelchairs, and for Orbit to receive payment.  
RELATED TO  
7 years in prison, and they were ordered to pay $80.6  All four defendants pleaded guilty to health care fraud 
MEDICARE AND  
million in restitution, joint and several.  Six defendants  conspiracy and were sentenced to a combined 5 years 
MEDICAID
involved in the scheme were previously sentenced to a  and 10 months in prison and ordered to pay restitution 
combined 6 months in prison and ordered to pay $1.21  of $6.2 million, joint and several.  
million in restitution, joint and several.  One additional 
defendant has pleaded guilty and is awaiting sentencing.
Laboratory
Transportation Tennessee  OPKO Health, Inc., Prost-Data, Inc., d/b/a 
OURLab, and Jonathan Oppenheimer, M.D., entered into 
New York  New York City Fire Department (FDNY)  a settlement agreement to resolve allegations that, from 
agreed to pay $4.3 million to resolve its liability under  June 2007 to January 2015, the defendants submitted 
the False Claims Act.  FDNY self-disclosed that, from  false claims to Medicare for drug testing that was referred 
October 2008 to October 2012, its billing contractor  to OURLab and, subsequently, to OPKO by physicians 
submitted claims to Medicare for emergency ambulance  and physician practice groups to whom OURLab and 
transport services FDNY knew were not medically  Oppenheimer donated money toward the purchase of 
necessary.  These claims were submitted to obtain a  EHR systems, in violation of the anti-kickback statute 
formal denial to facilitate reimbursement from secondary  and the Limitation on Certain Physician Referrals. The 
insurers and/or beneficiaries.  However, Medicare  defendants also allegedly submitted false claims to 
erroneously paid these claims, in part because FDNY  Medicare and TRICARE by billing for a non-covered form 
coded them in a manner that was not consistent with  of fluorescence in situ hybridization (FISH) testing, the 
the Medicare claims processing manual.  FDNY failed to  OURVision test, from June 2012 to January 2015.  The 
return the Medicare reimbursements it falsely received.  defendants agreed to pay $9.3 million, joint and several, 
to resolve their liability under the False Claims Act.  
Durable Medical Equipment 
Radiology
Utah  Orbit Medical is a DME supplier specializing  
in power wheelchairs.  According to the investigation,  New Jersey  Kirtish and Nita Patel were the owners  
the owner of Orbit, Jacob Kilgore, along with sales  of Biosound Medical Services (Biosound) and Heart 
representatives Morgan Workman, David Evans, and  Solutions (Heart), which provided mobile diagnostic 
Hunter Hartman, conspired to bill Medicare for power  testing services, such as ultrasounds, echocardiograms, 
wheelchairs for which beneficiaries did not qualify.   and neurological testing.  From 2006 to 2014, the Patels 
Specifically, they altered physician records and signatures  embarked on a fraud scheme whereby they forged 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  22 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   thousands of test results that should have been interpreted  Maryland  Dr. Paramjit Ajrawat and his wife Sukhveen 
by an appropriate medical doctor.  Instead of paying the  Ajrawat co-owned and operated Washington Pain 
RELATED TO  
interpreting physician a reading fee, the Patels created  Management Center.  According to evidence presented 
MEDICARE AND  
test interpretations and falsely affixed a medical doctors  at trial, from January 2011 through May 2014, the 
MEDICAID
signature to the report.  Those reports were then used  Ajrawats filed claims for procedures that were not 
by the referring providers to make medical decisions  performed.  Specifically, they performed less expensive 
based upon those falsely reported results. procedures but falsely billed for procedures that provided 
higher reimbursement amounts.  The Ajrawats also 
The Patels were sentenced to a combined 14 years and 
submitted claims for procedures that had not been 
10 months in prison and ordered to forfeit $4.8 million 
performed at all, and caused the alteration or destruction 
for their guilty plea to health care fraud.  
of patient files to conceal the scheme from auditors and 
law enforcement.  The charges against Mrs. Ajrawat 
were dismissed after her death.  Paramjit Ajrawat was 
Clinics
sentenced to 9 years and 3 months in prison and ordered 
to pay $3.1 million in restitution after a Federal jury 
New York  Jorge Juvier was the owner and operator of 
found him guilty of health care fraud, false statements 
multiple HIV/AIDS clinics in New York that purportedly 
relating to health care matters, obstruction of justice, 
provided injection and infusion treatments to Medicare-
and wire fraud.
eligible HIV/AIDS patients.  According to court documents, 
however, these clinics were health care fraud mills.  As 
part of the scheme, Juvier and his co-conspirators paid 
Kickbacks
patients cash kickbacks for coming to the clinics; coached 
patients on lying to clinic doctors to enable fraudulent 
Massachusetts  Hollister Incorporated (Hollister)  
billing; and billed Medicare for medications that were 
and Byram Healthcare, Inc. (Byram), entered into a 
never administered, administered at incorrect dosages, 
settlement agreement to resolve allegations that 
or were medically unnecessary.  Juvier was sentenced to 
Hollister and other manufacturers entered into 
5 years and 3 months in prison and ordered to pay $12.2 
arrangements with Byram, a DME supplier, to allegedly 
million in restitution, joint and several, for his guilty plea 
market ostomy products that violate the anti-kickback 
to conspiracy to commit health care fraud.  Two other 
statute.  Specifically, Hollister and Byram entered into 
defendants involved in the scheme were previously 
conversion campaigns whereby Hollister agreed to pay 
sentenced to a combined 8 years and 3 months in 
Byrams marketing costs, often by lowering the product 
prison and ordered to pay $9 million in restitution,  
price, in return for Byrams agreement to recommend or 
joint and several.
even require that customers switch to the manufacturers 
products.  Hollister also paid certain bonuses, called 
spiffs, directly to Byrams marketing employees (and  
in one case regional vice presidents) as a means of 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  23 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   incentivizing Byrams employees to convert customers  CMS the correct best price for its product Protonix.  
to Hollisters products.  Byram also solicited kickbacks  Protonix is a proton pump inhibitor used to treat symptoms 
RELATED TO  
from Hollister in the form of a $200,000 per year cost  of, among other things, acid reflux.  The Government 
MEDICARE AND  
defrayment of Byrams product catalogue.  The  alleged that Wyeth failed to report deep discounts that 
MEDICAID
defendants agreed to pay a total of $20.9 million to  it offered to hospitals for bundled sales of oral and 
resolve their liability under the False Claims Act.   intravenous versions of Protonix.  This conduct allegedly 
led Wyeth to report false pricing information to CMS 
and underpay rebates due to the States for Protonix.  
Hospital Wyeth Inc. and Pfizer agreed to pay $784.6 million to 
resolve their liability under the False Claims Act.
South Carolina  Lexington County Health Services 
District, Inc., d/b/a Lexington Medical Center (LMC) 
entered into a settlement agreement to resolve allegations  Psychiatric and Psychological Services
that LMC had compensation arrangements within the 
meaning of the Stark law in the form of asset purchase  Texas  Sharon Iglehart was a psychiatrist at Riverside 
arrangements and employment arrangements with  General Hospital (Riverside).  According to evidence 
certain physicians that did not satisfy all the requirements  presented at trial, from 2006 until 2012, Iglehart and 
of any applicable exception to Starks referral and billing  others engaged in a scheme to defraud Medicare by 
prohibition.  These alleged problematic arrangements led  submitting through Riverside approximately $158 
LMC, which operates the Lexington Medical Center  million in false claims for partial hospitalization program 
hospital and associated office-based clinics, to submit  (PHP) services, an intensive outpatient treatment for 
fraudulent claims to Medicare for designated health  severe mental illness.  Beneficiaries for whom Riverside 
services referred by these physicians in violation of the  billed Medicare did not receive PHP services; in fact, 
False Claims Act.  LMC agreed to pay $17 million and  beneficiaries rarely saw a psychiatrist and did not 
enter into a CIA with OIG to resolve its liability under   receive intensive psychiatric treatment at all.  A jury 
the False Claims Act.   convicted Iglehart of conspiracy to commit health care 
fraud, health care fraud, and making false statements 
relating to health care matters.  She was sentenced to 
Pharmaceutical Company 12 years in prison and ordered to pay $6.3 million in 
restitution.  Six defendants involved in the scheme were 
Massachusetts  Wyeth Inc. and Pfizer Inc. (the current 
previously sentenced to a combined 120 years in prison 
owner of Wyeth), entered into a settlement agreement 
and ordered to pay $46.7 million in restitution, joint and 
to resolve allegations that Wyeth reported false pricing 
several.  Six additional defendants either pleaded guilty 
information and underpaid rebates that were due under 
or were found guilty and are awaiting sentencing. 
the Medicaid drug rebate program.  Specifically, between 
2001 and 2006, Wyeth Inc., allegedly failed to report to 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  24 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   Health Care Fraud Prevention   and State and local law enforcement have a common 
goal:  successfully analyze health care fraud data and 
RELATED TO  
and Enforcement
investigative intelligence to quickly identify fraud and 
MEDICARE AND  
bring prosecutions.  Strike Force teams currently 
MEDICAID On May 20, 2009, former HHS Secretary Kathleen 
operate in nine areas:  Miami, Florida; Los Angeles, 
Sebelius and former Attorney General Eric Holder 
California; Detroit, Michigan; Houston, Texas; Brooklyn, 
announced the creation of the Health Care Fraud 
New York; southern Louisiana; Tampa, Florida; Chicago, 
Prevention and Enforcement Action Team (HEAT), an 
Illinois; and Dallas, Texas. 
interagency effort focused specifically on combating 
health care fraud.  HEAT includes senior officials from  From April 1, 2016, to September 30, 2016, Strike Force 
DOJ and HHS who are strengthening programs and  efforts resulted in the filing of charges against 168 
investing in new resources and technologies to   individuals or entities, 107 criminal actions, and more 
prevent and combat fraud, waste, and abuse. than $204.2 million in investigative receivables.
Below are examples of Strike Force cases:
HEAT Provider Compliance Training 
Florida  Khaled Elbeblawy was the owner and manager 
OIG provides free training on our website for health   of three Miami-area home health agencies.  According 
care providers, compliance professionals, and attorneys.   to evidence presented at trial, from approximately 2006 
OIGs Provider Compliance Training was an initiative  to 2013, Elbeblawy and his co-conspirators purported to 
developed as part of HEAT in 2011 that continues to  provide home health services to Medicare beneficiaries 
reach the health care community with OIGs message   that were not medically necessary and often were not 
of compliance and prevention via free, downloadable,  provided.  Elbeblawy and his co-conspirators paid 
comprehensive training materials and podcasts.  OIGs  kickbacks to doctors, patient recruiters, and staffing 
provider compliance training resources can be accessed  groups in exchange for referring beneficiaries to his 
at:  http://oig.hhs.gov/compliance/provider- home health agencies.  Elbeblawy was convicted of 
compliance-training/index.asp.   conspiracy to commit health care fraud and wire fraud 
and conspiracy to defraud the United States and pay 
health care kickbacks.  He was sentenced to 20 years in 
Health Care Fraud Strike Force Activities 
prison and ordered to pay $36.4 million in restitution, 
joint and several.  One other defendant involved in the 
Health Care Fraud Strike Force teams began in 2007 in 
scheme was previously sentenced to 8 months in prison 
an effort to combine the resources of Federal, State, and 
and ordered to pay $49,000 in restitution, joint and 
local law enforcement entities to prevent and combat 
several, and another defendant has pleaded guilty and  
health care fraud, waste, and abuse.  These partnerships 
is awaiting sentencing.
between OIG and HHS, DOJ, U.S. Attorneys Offices, FBI, 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  25 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   Florida  Dr. Henry Lora and Isabel Medina co-owned  litigated important criminal cases relating to the 
the medical clinic Merfi Corp.  Lora, who was also the  fraudulent billing of medical equipment and supplies, 
RELATED TO  
medical director, admitted that in exchange for kickbacks  infusion therapy, and physical therapy, as well as other 
MEDICARE AND  
and bribes, he and his co-conspirators ordered home  types of Medicare and Medicaid fraud.
MEDICAID
health care and other services for Medicare beneficiaries 
that were not medically necessary and also falsified 
Below is a related case example:
patient records to make it appear as if the beneficiaries 
qualified for these services.  Lora was sentenced to 9  Texas  Dr. Augustine Egbunike owned PrimeCare 
Medical Associates, while Loretta Mbadugha owned 
years in prison and ordered to pay $30.2 million in 
Bayou Rehab and Family Services, Inc.  Both companies 
restitution for his guilty plea to conspiracy to commit 
purportedly provided vestibular diagnostic testing, 
health care fraud and conspiracy to defraud the United 
which is used to evaluate a person for vertigo or 
States, namely, to receive health care kickbacks and 
dizziness.  From 2006 to 2010, the conspirators falsely 
make false statements regarding health care matters.  
billed Medicare and Medicaid for numerous, unnecessary 
Medina was previously sentenced to 9 years in prison 
vestibular diagnostic tests.  The evidence demonstrated 
and ordered to pay $8.4 million in restitution, joint  
that the testing was either not performed, not medically 
and several. 
necessary, or not performed by licensed individuals.  
Both defendants pleaded guilty to conspiracy to commit 
Other Criminal and Civil   health care fraud.  Egbunike was sentenced to 4 years 
and 9 months in prison and ordered to pay $2 million in 
Enforcement Activities 
restitution, joint and several.  Mbadugha was sentenced 
to 2 years and 6 months in prison and ordered to pay 
Special Assistant U.S. Attorney Program 
$404,157 in restitution, joint and several.  One other 
defendant involved in the scheme was previously 
During this reporting period, DOJ and OIG continued 
sentenced to 2 years and 9 months in prison and ordered 
their participation in a program in which OIG attorneys, 
to pay $896,100 in restitution, joint and several.
some of whom are Special Agents, serve as Special 
Assistant U.S. Attorneys.  These OIG attorneys are 
detailed full time to DOJs Criminal Division, Fraud 
Most Wanted Fugitives Listed on OIGs Website 
Section, for temporary assignments, including 
assignments to the Health Care Fraud Strike Force.   The OIG Most Wanted Fugitives website continues to 
Other attorneys prosecute matters on a case-by-case  garner national and international attention and has 
basis.  Both arrangements offer excellent litigation  greatly assisted in helping to capture fugitives charged 
training for OIG attorneys and enhance collaboration  with defrauding Federal health care programs and 
between the Departments in their efforts to fight fraud.   stealing millions of taxpayer dollars.  The Most Wanted 
Under this program, OIG attorneys have successfully  Fugitives website is continually updated and features a 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  26 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   profile for each fugitive as well as an online tip form and  not provided.  Lopez fled the country and was arrested 
a hotline number for individuals to report fugitive-related  in Nicaragua.  He is currently in custody and will face 
RELATED TO  
information to OIG, in English or Spanish, 24 hours a  charges stemming from his indictment.
MEDICARE AND  
day, 365 days a year.  The Most Wanted Fugitives list can 
MEDICAID Because of the success of OIGs Most Wanted Fugitives 
be accessed at https://oig.hhs.gov/fraud/fugitives/
website, OIG launched its Most Wanted Deadbeat 
index.asp.  During this reporting period, four fugitives 
Parents website at https://oig.hhs.gov/fraud/child-
were captured. 
support-enforcement/index.asp.  The site identifies 
One of OIGs Most Wanted Fugitives who was captured  parents who fail to pay court-ordered child support  
during this reporting period was Robert Allen Lopez.   for their children; as a result, an unnecessary strain is 
Lopez pleaded guilty to Medicare fraud in 1995 and  placed on the custodial parents and the children as well 
then went on the run for 20 years, fleeing the country  as on agencies that enforce these matters.  Examples 
before sentencing.  According to the indictment, from  are provided in the Human Services Reviews section  
July 1991 through June 1994, Lopez and others conspired  of this Semiannual Report.
to defraud Medicare by filing false claims and structuring 
cash transactions to evade Federal currency-reporting 
requirements.  The fraudulent claims totaled more than  HHS OIG Hotline
$4 million.  OIG investigators found that Lopez established 
The mission of the HHS OIG Hotline is to support OIG in 
numerous companies in Miami, using sham owners to 
oversight responsibilities to safeguard the integrity of all 
conceal that he was the true owner.  These companies 
programs and personnel under purview of HHS and 
filed false Medicare claims on behalf of beneficiaries for 
protect them from fraud, waste and abuse.  We achieve 
services that were either medically unnecessary or were 
this through our dedication to timely intake and evaluation 
not provided.  Lopez also recruited friends and relatives 
of information received from various sources, such as 
to assist him as sham owners.  He directed them to 
the Report Fraud website portal on the HHS OIG 
open bank accounts where the fraudulently obtained 
Internet page and telephone calls to 1800HHSTIPS.  
Medicare reimbursements were deposited.  To avoid 
Strategically located within the Office of Investigations, 
reporting requirements for cash transactions exceeding 
the OIG Hotline is the public facing division for the 
$10,000, it is believed that Lopez directed the sham 
intake of fraud tips.  The OIG Hotline is motivated by the 
owners to make structured cash withdrawals from the 
constant awareness that our work impacts all Americans, 
accounts.  OIG investigators found that Lopez established 
including some of our most vulnerable citizens, such as 
numerous companies in Miami, using sham owners to 
the elderly and others who are often unable to help 
conceal that he was the true owner.  These companies 
themselves.  
filed false Medicare claims on behalf of beneficiaries for 
services that were either medically unnecessary or were 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  27 LEGAL AND  
INVESTIGATIVE  
OIG Hotline Activity (4/1/16  9/30/16): pharmaceutical manufacturers making up over a third  
ACTIVITIES  
of its settlements.  Additionally, MFCUs reported $744 
RELATED TO  
  Total HHS TIPS Received via Phone-Evaluated for  million in criminal and civil recoveries.  OIG also found 
MEDICARE AND  
Action:  11,196 that, in FY 2015, MFCUs reported the highest number  
MEDICAID
  Total HHS TIPS Received via Phone    of convictions in the last 5 years, and OIG exclusions 
Referred:  8,957 resulting from its conviction referrals have grown since 
2011.  Civil settlements and judgments have decreased 
  Total HHS TIPS Received via Internet:  5,201
modestly over the last 5 years, and civil recovery amounts 
  Total HHS TIPS Received via Letters/Faxes:  1,697 have decreased significantly.  Finally, many MFCUs made 
  Total Viable HHS TIPS Evaluated:  11,196 operational improvements in response to OIG 
recommendations.
  Total Contacts to the HHS OIG Hotline Calls:  
15,855 OEI-07-16-00050    September 2016
State Medicaid Fraud Control Units 
OIG Onsite Reviews of MFCUs  
OIG Oversight of State Medicaid Fraud Control Units In addition to an annual recertification review of each 
MFCUs are key partners with OIG in the fight against  MFCU, OIG conducts periodic in-depth reviews of a 
fraud, waste, and abuse in State Medicaid programs.   sample of MFCUs.  OIG evaluates MFCU operations  
OIG has oversight responsibility for MFCUs and administers  in accordance with 12 performance standards and 
grants that provide Federal funding for Unit operations.   assesses compliance with laws, regulations, and OIG 
The Federal Government reimburses 75 percent of the  policy guidance.  OIG issued reports of onsite reviews  
costs of operating a Unit; the States contribute the  of the following MFCUs during the reporting period: 
remaining 25 percent.  MFCUs investigate and prosecute 
  Maryland State Medicaid Fraud Control Unit:  2016 
Medicaid provider fraud and patient abuse and neglect 
Onsite Review, OEI-07-16-00140, September 2016.
in health care facilities or board and care facilities.  
  North Carolina State Medicaid Fraud Control Unit:  
2016 Onsite Review, OEI-07-16-00070, September 
Medicaid Fraud Control Units Fiscal Year 2015 Annual Report
2016.
OIGs MFCU FY 2015 Annual Report highlights statistical 
  South Dakota State Medicaid Fraud Control Unit:  
achievements from the investigations and prosecutions 
2016 Onsite Review, OEI-07-16-00170, September 
the 50 MFCUs conducted in FY 2015. OIG found that 
2016.
nearly one-third of the 1,533 MFCU convictions involved 
personal care services attendants.  Fraud cases accounted    Washington State Medicaid Fraud Control Unit:  
for 71 percent of the MFCU convictions.  MFCUs  2016 Onsite Review, OEI-09-16-00010, August 
reported 731 civil settlements and judgements, with  2016.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  28 LEGAL AND  
INVESTIGATIVE  
  Virginia State Medicaid Fraud Control Unit:  2015  Advisory Opinions and Other Industry Guidance 
ACTIVITIES  
Onsite Review, OEI-07-15-00290, August 2016.
RELATED TO  
As part of OIGs continuing efforts to promote the 
MEDICARE AND     Massachusetts State Medicaid Fraud Control Unit:  
highest level of ethical and lawful conduct by the health 
MEDICAID 2015 Onsite Review, OEI-7-15-00390, June 2016.
care industry, we issue advisory opinions and other 
  Pennsylvania State Medicaid Fraud Control Unit:   guidance to educate industry and other stakeholders on 
2015 Onsite Review, OEI-07-15-00360, June 2016. how to avoid fraud, waste, and abuse.  Advisory opinions, 
  Florida State Medicaid Fraud Control Unit:  2015  which are developed in consultation with DOJ, are 
Onsite Review, OEI-07-15-00340, June 2016. issued to requesting parties regarding the interpretation 
and applicability of certain statutes relating to Federal 
  Oklahoma State Medicaid Fraud Control Unit:  
health care programs.  HIPAA,  205, allows OIG to 
2014 Onsite Review, OEI-06-14-00630, April 2016.
provide case-specific formal guidance on the application 
of the anti-kickback statute and safe harbor provisions 
The following is a case example of joint efforts 
and other OIG health care fraud and abuse sanctions.  
with MFCUs:
From April 1, 2016, to September 30, 2016, OIG received 
Virginia  Beth Palin and Joseph D. Webb, Jr., were the  20 requests for advisory opinions and issued 6 advisory 
owners of Bristol Laboratories LLC.  According to the  opinions. 
investigation, from May 2009 to April 2012, Palin and 
Webb conspired with Dr. Charles Wagner to bill medically 
unnecessary and excessive urine drug screen (UDS) tests  Sanction Authorities and Other  
to Federal and private health insurances.  Wagner was  Administrative Actions 
an opioid addiction therapy doctor who directed all of 
his patients to be tested at Bristol.  Investigators found  Various Federal laws provide authorities the ability to 
that Palin and Webb determined the types of drug  impose administrative sanctions for fraud and abuse as 
screens that were ordered and their frequency.  Patients  well as other activities that pose a risk to Federal health 
who were uninsured would have a basic UDS; however,  care programs and their beneficiaries.  Sanctions include 
insured patients would have much more expensive  the exclusion of individuals and entities from Federal 
testing performed.  Dr. Wagner died during the course  health care programs and the imposition of CMPs for 
of this investigation and was not charged.  Palin and  submitting false and fraudulent claims to a Federal 
Webb, Jr., were each sentenced to 3 years in prison and  health care program or for violating the anti-kickback 
ordered to pay $1.4 million in restitution, joint and several,  statute, the Stark law, or the Emergency Medical 
for their guilty plea to conspiracy to commit health care  Treatment and Labor Act (EMTALA), also known as  
fraud and health care fraud.  This was a joint investigation  the patient dumping statute. 
with the Virginia Medicaid Fraud Control Unit.
During this semiannual reporting period, OIG imposed 
2,092 administrative sanctions in the form of program 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  29 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   exclusions or administrative actions for alleged fraud or  Florida  Enemisis Torres was the owner and registered 
abuse or other activities that posed a risk to Federal  representative of Comprehensive Care Clinic (CCC).  
RELATED TO  
health care programs and their beneficiaries.  Exclusion  Torres conspired with CCC employees to pay kickbacks 
MEDICARE AND  
and penalty authorities are described in Appendix D   to Medicare beneficiaries for allowing them to use their 
MEDICAID
and on our website at http://oig.hhs.gov/fraud/ Medicare information for fraudulent purposes.  Torres 
enforcement/cmp/index.asp. was sentenced to 4 years and 3 months in prison and 
ordered to pay $20 million in restitution based on his 
conviction of conspiracy to commit health care fraud 
Program Exclusions  and wire fraud.  OIG excluded Torres for a minimum 
period of 55 years.  
During this semiannual reporting period, OIG excluded 
1,973 individuals and entities from Medicare, Medicaid, 
and other Federal health care programs.  Most of the  Suspensions and Debarments 
exclusions resulted from convictions for crimes relating 
to Medicare or Medicaid, for patient abuse or neglect,  Suspensions and debarments are administrative tools 
or as a result of license revocation.  OIG is also  used by HHS and other Federal agencies to protect the 
responsible for reinstating providers who apply   Government from individuals and entities that have 
and have met the requirements of their exclusions.    engaged in contract fraud, misused grant funds, or are 
For a list of excluded individuals and entities, see   otherwise not presently responsible.  Because these are 
https://exclusions.oig.hhs.gov/.   Governmentwide sanctions, an individual or entity that 
has been suspended or debarred by HHS or any other 
agency is ineligible from participating in any future 
The following are examples of program 
funding opportunities across the Federal Government 
exclusions:
for a specified period of time. 
California  Hsiu Ying Lisa Tseng was a doctor of 
osteopathy.  According to court documents, Tseng  OIG refers individuals and entities that have potentially 
prescribed massive quantities of controlled substances  engaged in grant or contract fraud or misconduct to the 
to patients with no legitimate need.  Tseng was  HHS Suspension and Debarment Official, who is 
sentenced to 30 years in prison based on her conviction  responsible for determining whether to impose a 
of second degree murder, unlawful controlled substance  suspension or debarment.  OIG continues to develop a 
prescription, and obtaining a controlled substance by  robust Suspension and Debarment program and uses 
fraud.  In addition, her license to practice as a doctor  this tool to protect Government programs against fraud, 
was suspended by the Osteopathic Medical Board of  waste, poor performance, and noncompliance with 
California.  OIG excluded Tseng for a minimum period   contract provisions or applicable law.
of 50 years.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  30 LEGAL AND  
INVESTIGATIVE  
The following are debarment examples:  Corporate Integrity Agreements 
ACTIVITIES  
RELATED TO   South Dakota  Samone Milk, Heather Garcia, Joe 
Many health care providers elect to settle their cases 
MEDICARE AND   Garcia, and Wayne Cortier were each involved in the 
before litigation.  As part of the settlements, providers 
MEDICAID Oglala Sioux Tribe.  According to the investigation, the 
often agree to enter into CIAs with OIG to avoid exclusions 
defendants organized a scheme to divert Oglala Sioux 
from Medicare, Medicaid, and other Federal health care 
Tribe/Low Income Home Energy Assistance Program 
programs.  Under a CIA, a provider commits to establishing 
funds from legitimate projects.  On at least 30 occasions, 
a program and taking other specified steps to ensure 
they fraudulently generated documents such as 
future compliance with Medicare and Medicaid rules.  
requests for assistance, invoices, and vouchers on behalf 
The compliance programs are designed, in part, to 
of real or fictional tribal members, and they unlawfully 
prevent future fraud.  OIG monitors providers compliance 
converted the Federal funds for their own personal use.  
with these agreements and may impose penalties on 
The defendants were each convicted of conspiracy to 
entities that fail to comply with the requirements of 
commit theft concerning programs receiving Federal 
their CIAs.  Many civil settlements include CIAs with OIG. 
funds and were debarred for a 3-year period based on 
OIG referrals to the Department. 
The following is a CIA example:
Mississippi  Linda Harvey-Irvin was the deputy director 
Louisiana  Amedisys, Inc., entered into a settlement 
of the Mississippi Gulf Coast Community Action Agency 
agreement to resolve allegations that it submitted 
(GCCAA), a nonprofit organization partially funded by 
claims for home health services provided at six different 
Federal grants, which are used to fund the Head Start 
locations that were medically unnecessary and/or in 
preschool program.  Harvey-Irvin accepted bribes from 
violation of other Medicare requirements.  Amedisys 
Donald Walton, owner and operator of Walton 
reported this conduct to OIG under the terms of its CIA 
Construction, in exchange for construction contracts 
and agreed to pay $4.6 million to resolve their liability. 
worth more than $400,000.  Harvey-Irvin was also 
charged in a second indictment with accepting bribes 
from Markuntala Croom, owner and operator of Croom 
Civil Monetary Penalties Law 
Consulting, in exchange for awarding more than 
$520,502 in consulting work to Croom.  Walton paid 
The Civil Monetary Penalties Law (CMPL) authorizes OIG 
Harvey-Irvin $31,000 in kickbacks as a reward for his 
to impose administrative penalties on and assessments 
contracts, and Croom paid Harvey-Irvin $69,911 in 
against a person who, among other things, submits, or 
kickbacks as a reward for her contracts.  All three 
causes to be submitted, claims to a Federal health care 
defendants were convicted of theft or bribery concerning 
program that the person knows, or should know, are 
programs receiving Federal funds and were debarred  
false or fraudulent.  During this semiannual reporting 
for a 3-year period based on an OIG referral to the 
period, OIG concluded cases involving more than  
Department.
$38.4 million in CMPs and assessments. 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  31 LEGAL AND  
INVESTIGATIVE  
ACTIVITIES   The following is a CMP example: Grady agreed to pay a penalty of $40,000 to resolve its 
potential liability under EMTALA.  
RELATED TO   California  Enloe Medical Center (Enloe) entered into  
MEDICARE AND   a settlement agreement to resolve allegations that it 
Tennessee  Regional One Health (ROH) entered into an 
MEDICAID submitted claims for emergency ambulance transportation  agreement to resolve allegations that it failed to provide 
to destinations such as skilled nursing facilities and 
an adequate medical screening examination and 
patient residences that should have been billed at  
stabilizing treatment to a patient.  Specifically, OIG 
the lower non-emergency rate.  Enloe agreed to  
alleged that a patient with complaints of sudden pain in 
pay $570,912 to resolve its liability.
the lower right quadrant of his abdomen presented to 
ROH, and ROH failed to fully evaluate the severity and 
cause of the patients emergency medical condition and 
Patient Dumping 
did not provide stabilizing treatment for sepsis before 
ROH transferred the patient to another hospital.  The 
Some of the CMPL cases that OIG resolved between 
patient died of septic shock and respiratory failure 
April 1, 2016, and September 30, 2016, were pursued 
within a week of his transfer by ROH.  ROH agreed to 
under the Emergency Medical Treatment and Labor  
pay a penalty of $45,000 to resolve its potential liability 
Act (EMTALA), a statute designed to prevent hospitals 
under EMTALA. 
from denying emergency care to patients and to ensure 
patient access to appropriate emergency medical services.  
Self-Disclosure Programs 
The following are EMTALA case examples:
Health care providers, suppliers, or other individuals or 
Georgia  Grady Memorial Hospital Corporation d/b/a/ 
entities subject to CMPs can apply for acceptance into 
Grady Health System (Grady) entered into an agreement 
the Provider Self-Disclosure Protocol, a program created 
to resolve allegations that it failed to provide an adequate 
in 1998, to voluntarily disclose self-discovered evidence 
medical screening examination and stabilizing treatment 
of potential fraud.  The self-disclosure program may give 
to a patient.  Specifically, a patient was extracted from 
providers the opportunity to potentially avoid costs or 
his apartment by a SWAT team and brought to Gradys 
possible disruptions associated with Government-
emergency department (ED) by a police officer because 
directed investigations and civil or administrative 
of complaints of suicidal and homicidal ideations.  While 
litigation.  Application processes for two additional 
at Grady, two Licensed Professional Counselors (LPCs) 
self-disclosure programs were recently added to the OIG 
evaluated the patient and determined that the patient 
website for HHS contractors and grantees.  The OIG 
should be held involuntarily for further evaluation and 
contractor self-disclosure program enables contractors 
treatment.  Approximately 5 hours after the patients 
the opportunity to self-disclose when they have 
arrival in the ED, the ED physician discharged the patient 
potentially violated the False Claims Act or other Federal 
without consulting the LPCs or the on-call psychiatrist.  
criminal laws prohibiting fraud, conflict of interest, 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  32 LEGAL AND  
INVESTIGATIVE  
bribery, or gratuity.  This self-disclosure process is  West Virginia for services using a provider number 
ACTIVITIES  
available only to those with a Federal Acquisition  different than the medical professional who provided 
RELATED TO  
Regulation-based contract with HHS.  The OIG Grant  the services and billed for the services of non-physician 
MEDICARE AND  
Self-Disclosure program is available for application by  practitioners who were not properly enrolled in their 
MEDICAID
HHS grantees or HHS grant sub-recipients and provides  State Medicaid program.  Planned Parenthood agreed to 
the opportunity for voluntarily disclosure to OIG of  pay $1.5 million to resolve its liability under the CMPL 
potential fraud.  OIG evaluates the reported results of  for conduct it disclosed to OIG.
each internal investigation under the provider self-
disclosure protocol to determine the appropriate course 
of action.  The self-disclosure guidelines are available on 
the OIG website at https://oig.hhs.gov/compliance/
self-disclosure-info/index.asp.  During this semiannual 
reporting period, self-disclosure cases resulted in more 
than $39.1 million in HHS receivables.  
The following are examples of provider  
self-disclosure settlements:
California  Five Star Quality Care-CA, LLC d/b/a 
Lancaster Healthcare Center entered into an agreement 
with OIG to resolve allegations that, during the period of 
January 2010 through July 2014, it submitted claims for 
skilled nursing services without proper certifications and 
recertifications for services, establishment and content 
of therapy plans, and/or maintenance of clinical records.  
In addition, during the period of September 2014 
through December 2014, it paid remuneration to a 
medical director for referrals.  The company agreed to 
pay $8.6 million to resolve its liability under the CMPL 
for conduct it disclosed to OIG. 
Virginia  Planned Parenthood Health Systems, Inc. 
(Planned Parenthood), entered into an agreement with 
OIG to resolve allegations that, between November 
2004 and February 2015, it submitted claims to 
Medicaid in North Carolina, South Carolina, Virginia, and 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  33     
ss
we
eti Centers for Disease Control   project period and may have considered applications 
ii that it should not have or treated applicants inconsistently.  
vv and Prevention CDC concurred with our recommendations that it:   
ei (1) conduct quality assurance reviews of FOAs and 
t
Rc Presidents Emergency Plan for AIDS Relief funded grant applicant information to monitor 
 A compliance with HHS and internal policies when 
s The Presidents Emergency Plan for AIDS Relief (PEPFAR) 
awarding PEPFAR funds, and (2) address specific 
 
et program was authorized to receive $48 billion in funding  deficiencies that we identified in our review. 
in for the 5-year period beginning October 1, 2008, to 
c
e assist foreign countries in combating HIV/AIDS,  CDC awarded PEPFAR funds of $105 million for 
n
m tuberculosis, and malaria.  Additional funds were  September 30, 2011, through September 29, 2014,  
e
authorized to be appropriated through 2018.  OIG is  to Medical Access Uganda Limited (Medical Access).  
ge
required to provide oversight of PEPFAR.  To meet this  Medical Access expended $103.8 million during that 
Ac
requirement, OIG has conducted a series of audits of  period.  Medical Access managed PEPFAR funds in 
r
  CDCs PEPFAR grant administration and of organizations  accordance with award requirements except that it used 
o
h
receiving PEPFAR funds from CDC. these funds to pay $751,000 in value-added tax (VAT) 
f
t
n that the Ugandan Government has not reimbursed.  
l
aE The Centers for Disease Control and Prevention Did Not  This payment of VAT and lack of reimbursement 
e occurred because of a disagreement over the interpretation 
  Award Presidents Emergency Plan for AIDS Relief Funds  
Hd of a provision of a bilateral agreement in effect between 
for 2013 in Compliance With Applicable HHS Policies 
n the United States and the Government of Uganda.  CDC 
 
ca A-04-14-04021    May 2016 believed that grantees were exempt from the payment 
i of VAT and that the exemption would occur through 
l
b reimbursement.  However, the Government of Uganda 
Also, Medical Access Uganda Limited Generally Managed  
recognized only State Department purchases as exempt 
u
the Presidents Emergency Plan for AIDS Relief Funds in  or reimbursable of VAT under the bilateral agreement.  
P
Accordance With Award Requirements  Medical Access concurred with our recommendation 
that it work with CDC to obtain $751,000 in VAT 
A-04-15-04040    June 2016
reimbursement from the Ugandan Government.
We found that CDC did not award PEPFAR funds for FY 
Centers for Disease Control and Preventions Property System 
2013 in compliance with HHS and internal policies.  For 
Data Were Neither Accurate Nor Complete 
all 30 Funding Opportunity Announcements (FOAs) in 
our judgmental sample, CDC did not comply with one   CDC has various types of accountable property stored in 
or more HHS or internal policies in some awards.  As a  the United States and overseas.  As of September 30, 
result, CDC did not always adequately document its  2013, CDCs property system showed that CDC had 
funding decisions to award $1.9 billion over the 5-year  60,241 property items with a total cost of $451 million.  
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  34 PUBLIC HEALTH 
Our audit of data in the property system determined  World Trade Center Health Program:  Review  
AGENCIES  
that the data were neither accurate nor complete in FY  of Medical Claims 
REVIEWS AND  
2013.  Of the 250 items we sampled from the system, 
ENFORCEMENT   The World Trade Center Health Program (WTCHP) was 
we located 245.  CDC had classified the remaining five 
ACTIVITIES established in January 2011 and is administered by CDC 
items as missing.  We also found 14 items that were not 
through its National Institute for Occupational Safety 
barcoded or accurately recorded in the system.  We 
and Health (NIOSH).  Under the WTCHP, pharmacy 
estimated that $29.2 million of CDC property was at risk 
benefits and medical services are provided to eligible 
of being lost or misplaced.  CDC did not record in the 
responders and survivors with certified health conditions 
system all newly acquired property.  Of 128 sampled 
related to the September 11, 2001, terrorist attacks.  
payments that CDC made for property, CDC incorrectly 
OIG is required to review WTCHP expenditures to detect 
barcoded and added to its system property items 
inappropriate billing and payment for services.  For this 
associated with 114 payments.  We estimated that the 
review, we found that not all of CDCs internal controls 
cost of property purchased ($96.7 million) was understated 
were effective in ensuring that claims for WTCHP 
by approximately $5.9 million.  Also, although CDC 
pharmacy benefits and medical services were paid in 
performed a monthly reconciliation of its system, the 
accordance with Federal requirements.  
reconciliation was not complete because it included 
only property items with costs of $25,000 or more, so  CDC generally concurred with our recommendations 
CDC excluded 95 percent of its property items (41  that it:  (1) establish a procedure for collecting and 
percent of inventory costs in the system).  Furthermore,  transmitting New York Metro area members prescription 
CDC did not always remove from its system property  drug insurance coverage information to pharmacy 
that it had identified as missing, so the cost of property  benefit managers (PBMs) for benefits coordination,  
included in the system could be overstated by as much  (2) establish a procedure to ensure that Nationwide 
as $23.1 million.  Network members prescriptions are written by 
authorized WTCHP prescribers, (3) require PBMs to 
CDC concurred or partially concurred with our 
establish procedures to prevent the authorized number 
recommendations that it:  (1) complete Reports of 
of refills from being exceeded, (4) establish a procedure 
Survey within HHSs 90-day time limit and remove 
for ensuring that pharmacy benefit claims are reimbursed 
property from the system that the Reports of Survey 
at or below appropriate payment rates, and (5) 
identify as missing; and (2) ensure that all property  
determine whether medical service claims processed 
is added correctly to the system, that the system is 
before October 22, 2012, were reimbursed at or below 
reconciled, and that the system is adjusted to resolve 
the appropriate payment rate and recoup any 
any discrepancies.  CDC did not concur with our 
overpayments. 
recommendation that it ensure that existing property  
is barcoded and correctly identified in the system.  A-02-14-02008    September 2016
A-04-14-03546    June 2016
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  35 PUBLIC HEALTH 
Food and Drug Administration National Institutes of Health
AGENCIES  
REVIEWS AND  
Early Alert: The Food and Drug Administration Does Not Have  The National Institute of Environmental Health Sciences 
ENFORCEMENT  
an Efficient and Effective Food Recall Initiation Process  Generally Administered Its Superfund Appropriations During 
ACTIVITIES
FDA generally relies on firms to voluntarily recall harmful  Fiscal Year 2014 in Accordance With Federal Requirements 
articles of food.  Before 2011, FDA did not have the  The Comprehensive Environmental Response, Compensa-
authority to require a firm to recall certain articles of  tion, and Liability Act of 1980 established the Hazardous 
food.  However, in 2011 FDA gained the authority to  Substance Response Trust Fund, commonly known as the 
order a firm to recall certain articles of food after FDA  Superfund.  NIHs National Institute of Environmental 
determines that there is a reasonable probability that  Health Sciences (NIEHS) receives an annual Superfund 
the food is adulterated or misbranded and that it will  appropriation to carry out functions mandated by the Act.  
cause serious adverse health consequences or death   The Act also requires OIG to audit all uses of the fund in the 
to humans or animals. prior fiscal year.  The objective of this audit was to deter-
mine whether NIEHS adminis tered its Superfund appropri-
Our ongoing audit of FDAs food recall program found 
ations during FY 2014 in accordance with applicable 
that FDA did not have an efficient and effective food 
Federal requirements. 
recall initiation process that helps ensure the safety  
of the Nations food supply.  Specifically, FDA did not  We found that NIEHS generally administered its Superfund 
have policies and procedures to ensure that firms or  appropriations during FY 2014 in accordance with applica-
responsible parties initiated voluntary food recalls  ble Federal requirements.  However, it did not always 
promptly.  As a result, consumers remained at risk of  obligate Superfund appropriations in accordance with 
illness or death for several weeks after FDA was aware  applicable Federal laws.  Specifically, NIEHS improperly 
of a potentially hazardous food in the supply chain.  We  used $7,500 from expired Superfund appropriations.  
suggest that FDA update its policies and procedures to  NIEHS improperly used expired Superfund appropriations 
instruct its recall staff to establish set timeframes for  because it did not follow its standard operating procedure 
FDA to request that firms voluntarily recall their products  on the use of prior-year funds.  By not ensuring that 
and for firms to initiate voluntary food recalls. obligations were made within the 1-year period of availabil-
ity, NIEHS violated Federal appropriations law.  If appropri-
A-01-15-01500    June 2016 ate FY funding is not available to correct the improper 
obligations, an Antideficiency Act violation will have 
occurred.  NIEHS partially concurred with our recommen-
dation that it, as applicable, deobligate the $7,500 of 
improper obligations and obligate $7,500 using available 
appropriations from the correct fiscal year or determine 
whether any Antideficiency Act violations occurred and 
take appropriate action.
A-04-15-04035    April 2016
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  36 PUBLIC HEALTH 
Public-Health-Related Legal   HEAL Exclusions  
AGENCIES  
REVIEWS AND   Actions and Investigations During this semiannual reporting period, 48 individuals 
ENFORCEMENT  
and related entities were excluded as a result of PSC 
ACTIVITIES Health Education Assistance Loan Program referral of their cases to OIG.  Individuals who have been 
excluded as a result of default may enter into settlement 
OIG excludes individuals who have defaulted on Health  agreements, whereby the exclusions are stayed while 
Education Assistance Loan (HEAL) loans from participation  they pay specified amounts each month to satisfy their 
in Federal health care programs.  Under the HEAL  debts.  If they default on these settlement agreements, 
program, which stopped making loans in 1998, HRSA  they may be excluded until the entire debt is repaid and 
guaranteed commercial loans to students seeking  they may not appeal the exclusions. 
education in health-related fields.3  The students are 
allowed to defer repayment of the loans until after they  After being excluded for nonpayment of their HEAL 
graduate and begin to earn income.  Although HHSs  debts, 2,637 individuals chose to enter into settlement 
Program Support Center (PSC) takes steps to ensure  agreements or completely repay their debts.  That figure 
repayment, some loan recipients do not resolve their  includes 20 individuals who entered into such settlement 
indebtedness.  After PSC has exhausted efforts to secure  agreements or completely repaid their debts during this 
repayment of a debt, it declares an individual   semiannual reporting period.  More than $209 million is 
in default.  The Social Security Act permits exclusion  being repaid through settlement agreements or through 
thereafter of such individuals from Medicare, Medicaid,  complete repayment.  Of that amount, more than  
and all other Federal health care programs for  $2.2 million is attributable to this semiannual  
nonpayment of the loans.  reporting period.
Exclusion means that the individual may not receive  The following are settlement agreement examples.  
reimbursement under these programs for professional  These practitioners entered into settlement agreements 
services rendered, nor may any other provider receive  to repay the amounts indicated:       
reimbursement for services ordered or prescribed by 
  Ohio:  Dentist  $281,872
the excluded individual.  OIG is responsible for excluding 
individuals who have defaulted on HEAL loans from    California:  Medical Doctor  $124,177
participation in Federal health care programs. 
  Florida:  Medical Doctor  $116,633
  California:  Medical Doctor  $52,343
3   The HEAL Program, noted in previous Semiannual Reports,  
was permanently transferred from HHS to the U.S. Department 
of Education as required by the Consolidated Appropriations  
Act, 2014 (Pub.  L. 113-76).  The transfer was completed  
on July 1, 2014. 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  37     
ss
we
eti Administration for Children   these funds.  We found that although Sandy SSBG funds 
ii assisted States recovery, ACFs guidance limited the 
vv and Families  effectiveness of State planning and use of the funds.  
ei The initial deadline that ACF established did not allow 
t
Rc Hurricane Sandy  Response Preparedness   States the time they needed to use the Sandy SSBG 
 A and Oversight of Funds funds.  States also reported wanting more direction 
s
from ACF on allowable Sandy SSBG activities and more 
 
et Hurricane Sandy made landfall on October 29, 2012,  clarity about the type of documentation that ACF would 
in
devastating portions of the mid-Atlantic and  expect during program integrity reviews.  To take full 
c
e
northeastern United States and leaving victims of the  advantage of available funding for future disasters, 
n
m
storm and their communities in need of disaster relief  States and grantees must receive appropriate guidance 
e
aid.  On January 29, 2013, the President signed into law  about when funds expire, how they may use the funds, 
ge
the Disaster Relief Appropriations Act of 2013, P.L. No.  and what documents or other evidence they must 
Ac
113-2 (Disaster Relief Act), which, in part, provided HHS  maintain for program integrity purposes.  Nonetheless, 
r
 o with approximately $800 million in funding ($759.5  ACF worked closely with States as they planned and 
s
ef million after sequestration, of which $577.2 million was  implemented their activities and conducted required 
n allocated to ACF) for disaster response and recovery and  reviews of States use of the Sandy SSBG funds.  
c
E other expenses directly related to Hurricane Sandy.  The 
i
v  Disaster Relief Act mandated OIG to perform oversight,  ACF concurred with all of our recommendations to:   
rd accountability, and evaluation of programs, projects, or  (1) take additional steps to ensure, within the scope  
en activities supported with Disaster Relief Act funds. of the legislation, that States are given an appropriate 
Sa amount of time to expend any future supplemental 
  SSBG awards; (2) conduct a post-grant review to identify 
n Superstorm Sandy Block Grants:  Funds Benefited States  lessons learned and best practices; and (3) prepare 
a Reconstruction and Social Service Efforts, Though ACFs  guidance about supplemental SSBG documentation 
m Guidance Could Be Improved  requirements. 
u Five States received almost $475 million in Social  OEI-09-15-00200    September 2016
Services Block Grant (SSBG) funding to help cover social 
H
service and reconstruction expenses resulting directly 
from Superstorm Sandy.  When Congress made funds 
New York Implemented Effective Internal Controls Over 
available to States to help pay for expenses related to 
Hurricane Sandy Social Services Block Grant Funds and 
Superstorm Sandy, Congress noted that such funds  
were susceptible to significant improper payments.   Appropriately Budgeted and Claimed Allowable Costs 
This evaluation examined States experiences using  ACF awarded $235.4 million in Disaster Relief Act 
Superstorm Sandy SSBG funds and ACF oversight of  funding to New York for Social Services Block Grant 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  38 HUMAN  
SERVICES  
(SSBG) activities, including social, health, and mental  claimed allowable Hurricane Sandy Disaster Relief Act 
AGENCIES  
health services for individuals and for the repair,  costs for the period January 31, 2014, through February 
REVIEWS AND  
renovation, and rebuilding of health care, mental  28, 2015.  Accordingly, this report does not contain 
ENFORCEMENT 
health, and childcare facilities.  We found that New  recommendations.
ACTIVITIES
York implemented effective internal controls over the 
awarding, monitoring, and reporting of Hurricane Sandy  A-02-15-02007    May 2016
SSBG funds and appropriately budgeted and claimed 
allowable costs as of March 31, 2014.  Accordingly,  
this report does not contain recommendations.   Childcare and Head Start Programs
A-02-14-02009    May 2016 ACF provides Federal grants through several programs, 
including Head Start and the Child Care and Development 
Fund (CCDF).  CCDF (authorized by the Child Care and 
Bayview Nursing and Rehabilitation Center Claimed 
Development Block Grant Act and the Social Security Act 
Allowable Hurricane Sandy Disaster Relief Act Funds  418) assists low-income families, families receiving 
We reviewed New Yorks awarding of approximately  temporary public assistance, and families transitioning 
$2.8 million of Disaster Relief Act funds to Bayview  from public assistance to obtain childcare so that they 
Nursing and Rehabilitation Center (Bayview) for  may work or obtain training or education.  
construction and equipment expenses resulting from 
Hurricane Sandy.  We found that Bayview claimed 
Child Care and Development Fund
allowable Hurricane Sandy Disaster Relief Act costs.  
Specifically, Bayview used Disaster Relief Act funds to 
More Effort Is Needed to Protect the Integrity of the  
offset costs it had incurred repairing its facility and 
CCDF Block Grant Program
replacing damaged equipment before receiving its 
Disaster Relief Act grant award.  Accordingly, this   The CCDF block grant program is a FederalState 
report does not contain recommendations. partnership to provide eligible, low income families with 
help paying for childcare at a provider of their choice.  
A-02-15-02010    April 2016 Within the CCDF program, OIG has previously identified 
fraud, found improper payments, and exposed health 
and safety concerns at childcare facilities.  This report 
Columbia University Claimed Allowable Hurricane Sandy  focuses on how States and ACF ensure the integrity of 
Disaster Relief Act Funds the CCDF block grant program and the results of States 
program integrity activities.  We found that States 
NIH awarded $299,000 to Columbia University 
differed in the scope of CCDF program integrity activities 
(Columbia) to replace research resources lost or 
and varied substantially in the degree to which they 
damaged by Hurricane Sandy.  We found that Columbia 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  39 HUMAN  
SERVICES  
conducted specific program integrity activities.  Not all  Head Start
AGENCIES  
States performed important antifraud activities, and few 
REVIEWS AND  
States notified ACF and other States about suspected  Head Start Grant Recompetition:  Early Implementation 
ENFORCEMENT 
fraud.  Many States reported no results or did not know  Results Suggest Opportunities for Improvement 
ACTIVITIES
the results of their CCDF program integrity efforts in 
The Head Start program is the largest Federal investment 
2015, including their numbers of program violations and 
in early childhood education.  The Improving Head Start 
errors, referrals to law enforcement, and client and 
for School Readiness Act of 2007 required ACF to begin 
provider disqualifications.  States identified payment 
awarding 5-year grants for Head Start and to require 
error rates ranging from less than 1 percent to 36 
grantees that ACF determines are not providing a 
percent, but almost half of the States did not expect to 
high-quality and comprehensive Head Start program to 
recover any improper payments identified as a result of 
recompete or participate in open competition for 
their error rate reviews.  States identified limitations in 
funding renewal.  In response, ACF began to implement 
technology, resources, and coordination as top challenges 
the Designation Renewal System (DRS), which uses 
to ensuring CCDF program integrity.  In its oversight of 
seven trigger conditions to assess a subset of grantees 
State activities, ACF focuses more on technical assistance 
(known as a cohort) each year and determine which 
than compliance.  ACF does not have a process to 
grantees will be required to recompete. 
ensure that States carry out planned program integrity 
activities nor does it collect information about the  We reviewed ACFs DRS for Head Start grantees and 
results of these activities.   assessed the early results of Head Start grant 
recompetition.  In late 2011, ACF began assessing 
ACF concurred with all of our recommendations to:   
grantees through the DRS to determine which grantees 
(1) request that States examine the effectiveness of 
would have their grants automatically renewed and 
their program integrity and fraud fighting activities,  
which would be required to participate in open 
(2) examine with States the benefits of expanding 
competition for renewala process known as 
program integrity and fraud fighting activities,  
recompetition.  We found that one-third of grantees 
(3) establish routine communication to share program 
were required under the DRS to recompete for funding 
integrity and fraud-fighting best practices, and  
renewal.  Grantees DRS determinations were not linked 
(4) determine the feasibility of requiring all States to 
to the number of Head Start enrollees they served, the 
report information about the results of their program 
types of areas (i.e., rural or urban) where their centers 
integrity and fraud-fighting activities.
were located, the proportion of their enrollees who 
were from non-English-speaking families, or the 
OEI-03-16-00150    July 2016
proportion of their enrollees who were from very poor 
households.  Of grantees required to recompete, 
approximately three-quarters had their grants renewed 
for an additional 5-year term.  More than half of these 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  40 HUMAN  
SERVICES  
grantees were the sole applicants for their respective  The following are examples of child support 
AGENCIES  
grants.  We also found that DRS determinations were  enforcement cases:
REVIEWS AND  
largely inconsistent with other ACF performance data.  
ENFORCEMENT  Pennsylvania  In July 2002, Mark Matsinger was 
Additionally, few grantees with lower performance on a 
ordered to pay $1,300 per month for the support of his 
ACTIVITIES
hybrid of 10 DRS and non-DRS performance measures 
two children.  Matsinger made inconsistent payments  
left the Head Start program through the DRS and 
to the custodial parent of his children; his last payment 
recompetition processes.  Overall, 92 percent of Head 
was made in 2006.  Matsinger was sentenced to 812 
Start grantees had their grants renewed.
months in prison (time served), 6 months of location 
monitoring, and ordered to pay $170,000 in restitution 
We recommend that ACF proactively monitor grantees 
after pleading guilty to willful failure to pay child 
performance results to verify that grantees designated 
support.  In addition, Matsinger pleaded guilty to mail 
under the DRS for automatic, noncompetitive renewal 
fraud and was ordered to pay $40,002 to the Social 
perform better than their peers.  Additionally, ACF 
Security Administration.  
should take steps to increase the number of applicants 
for recompeted grants.  ACF concurred with both 
Virginia  Between 1999 and 2016, Raymond Dyrek 
recommendations.
Payne unlawfully failed to pay child support for his 
minor children, and he was placed on the OIG Child 
OEI-12-14-00650    August 2016
Support Enforcement Most Wanted list in January 2015.  
Payne moved from State to State knowingly eluding 
payments by working under aliases and fraudulent 
Child Support Enforcement  
Social Security numbers while convincing businesses in 
Activities several States that he had professional training in 
various fields including a country music singer/songwriter, 
pastry chef, real estate agent, graphic artist, and 
OIG Investigations  
brewmaster.  Payne has no professional training or 
OIG investigates noncustodial parents who fail to pay  certifications.  He was sentenced to 5 years of supervised 
court-ordered child support.  OIG works with ACFs  probation and ordered to pay restitution in the amount 
Office of Child Support Enforcement; DOJ; U.S. Attorneys  of $67,087 following a guilty plea for failure to pay child 
Offices; the U.S. Marshals Service; and Federal, State,  support.  
and local partners to address egregious child support 
enforcement cases with appropriate law enforcement 
and prosecutorial action.  During this reporting period, 
OIG investigations of child support enforcement cases 
nationwide resulted in 16 criminal actions and court-
ordered restitution and settlements of $956,546.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  41 HUMAN  
SERVICES  
AGENCIES   Engaging the Public in Capturing  
REVIEWS AND   Deadbeat Parents
ENFORCEMENT 
Because of the success of OIGs Most Wanted Fugitives 
ACTIVITIES
website, OIG launched its Most Wanted Deadbeat 
Parents website.  The site identifies parents who fail to 
pay court-ordered child support for their children and 
thereby put an unnecessary strain on the custodial 
parents and the children as well as on agencies that 
enforce these matters.  The site, which is updated 
frequently, includes information on OIGs role in pursuing 
parents who fail to pay court-ordered child support.  
OIGs Most Wanted Deadbeat Parents website is at 
https://oig.hhs.gov/fraud/child-support-enforcement/
index.asp.  
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  42    
dns
eon
tio Grants and Contracts Federal grant funds to LifeTechniques and Care Team  
at
i to which neither company was entitled.  Brue, Care 
a
elzat HHS is the largest grant-making organization and one   Team, and LifeTechniques agreed to pay $4.5 million, 
Rig of the largest contracting agencies in the Federal  joint and several, to resolve their liability under the  
n Government.  In FY 2016, HHS awarded more than  False Claims Act.  
i
-
at $463.5 billion in grants and over $21.1 billion in 
Sgs contracts across all program areas.  OIGs direct annual  Illinois  Bishop Herman Jackson was the owner and 
He
r discretionary appropriation funding is used to conduct  pastor of the Ark of Safety Apostolic Faith Temple.   
v
HO program integrity and enforcement activities with  He and his wife Jannette Faria operated three daycare 
n
regard to the more than 100 public health and human  centers from 2002 to 2011 and received childcare 
  
rGI services programs carried out by more than 70,000  subsidies from ACF Block Grants.  The investigation 
 
ed employees around the world.  The size and scope of  found that Jackson enrolled children who did not 
I
hOn departmental awards make their operating effectiveness  financially qualify to receive subsidized daycare services.  
ta crucial to the success of programs designed to improve  Also, many of the children attended daycare for a short 
O
  the health and well-being of the public.  Recent  period of time but were continuously billed long after 
s appropriations increased OIGs discretionary funding   they stopped attending.  In addition, some children 
w for public health and human services oversight.  never attended.  Jackson and Faria were found guilty of 
mail fraud, wire fraud, and false statements.  Jackson 
e
was sentenced to 5 years in prison, and Faria was 
i
v Grant Fraud Investigations sentenced to 1 year and 1 month in prison.  Both were 
e ordered to pay $896,590 in restitution, joint and several.  
R
The following are case examples related to misuse 
of grant funds:  Small Business Innovative Research Program 
Kentucky  Vesta Brue is the owner, president, and  
The National Defense Authorization Act for Fiscal Year 
chief executive officer of Care Team Solutions LLC  
2012,  5143, requires OIG to annually report on the 
(Care Team), and LifeTechniques, Inc. (LifeTechniques).  
number of cases that were referred with relation to 
LifeTechniques and Care Team allegedly submitted 
fraud, waste, or abuse in the Small Business Innovative 
applications to NIH to obtain Small Business Innovation 
Research/Small Business Technology Transfer (SBIR/ 
Research grants to fund the development of various 
STTR) program.  OIG must also report on the actions 
medical devices, and were awarded five grants.  The 
taken in each case; justification for not taking action  
Government alleges that Brue, on behalf of LifeTechniques 
on a case; and an accounting of funds used to address 
and Care Team, created phony invoices that grossly 
waste, fraud, and abuse in this program.  In our 
overstated expenses and manufactured products in 
December 2015 report delivered to the three 
China when all products were supposed to be produced 
congressional oversight committees, we reported that 
domestically.  As a result of these false claims, NIH paid 
HHHHSS  OOIIGG  SSHeeHmmSii aaOnnInnGuu Saaell  mRReeiappnoonrrttu  ttaool   RCCeoopnnoggrrrtee tssoss   C      o    ||n    g      r  eAAsppsrr  ii ll    11 |,,    22   00 A11p66  ril   SS1ee, pp20ttee1mm6 bb eeSrre  33p00t,,e  22m00b11e66r   30, 2016  434433 OIG spent approximately $236,239 in salaries on  OIG Reviews of Non-Federal Audits 
OTHER  
oversight related to the SBIR/STTR program.  HHS 
HHS-RELATED 
referred two new SBIR/STTR cases to OIG in FY 2016.  OIG reviews audits conducted by non-Federal auditors 
REVIEWS AND   of entities receiving Federal awards.  In this semiannual 
INVESTIGATIONS  period, OIGs National External Audit Review Center 
Recovery Act Retaliation Complaint Investigations reviewed 595 reports covering $2.1 trillion in audited 
costs.  Federal dollars covered by these audits totaled 
The American Recovery and Reinvestment Act (Recovery  $689 billion, of which about $366 billion were HHS funds. 
Act),  1553, prohibits non-Federal employers that have 
received Recovery Act funding from retaliating against  Office of Management and Budget (OMB) Circular A-133 
employees who disclose evidence of mismanagement of  and the more recent uniform guidance at 2CFR200, 
Recovery Act funds or any violation of law related to  Subpart F establishes audit requirements for State and 
Recovery Act funds.  OIGs are required to include in  local governments, colleges and universities, and nonprofit 
their Semiannual Reports to Congress the retaliation  organizations receiving Federal awards.  Under this 
complaint investigations that they decided not to  circular and uniform guidance, covered entities must 
conduct or continue during the reporting period.   conduct annual organizationwide single audits of all 
During this reporting period, OIG did not close any  Federal money they receive.  These audits are conducted 
investigations. by non-Federal auditors, such as public accounting firms 
and State auditors.  OIG reviews the quality of these 
audits and assesses the adequacy of the entities 
Contract Audits management of Federal funds. 
Pursuant to the National Defense Authorization Act for  OIGs oversight of non-Federal audit activity informs 
FY 2008,  845, OIGs appointed under the Inspector  Federal managers about the soundness of management 
General Act of 1978 are required to submit, as part of  of Federal programs and identifies any significant areas 
their Semiannual Reports to Congress pursuant to  of internal control weakness, noncompliance, and 
section 5 of such Act, information on final completed  questioned costs for resolution or followup.  We identify 
contract audit reports issued during the period to the  entities for high-risk monitoring, alert program officials 
contracting activity containing significant audit findings.   to any trends that could indicate problems in HHS 
OIG issued no final reports meeting  845 criteria during  programs, and profile non-Federal audit findings of a 
this semiannual period.  particular program or activity over time to identify 
systemic problems.  We also provide training and 
technical assistance to grantees and members of the 
auditing profession.  OIG maintains a process to assess 
the quality of the non-Federal reports received and the 
audit work that supports the selected reports. 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  44 OIGs reports on non-Federal audits reviewed during this  Abuse Prevention Act of 2012 (P.L. No. 112194) 
OTHER  
reporting period are categorized in the following table. (Charge Card Act) to report to the OMB Director  
HHS-RELATED 
on agency progress in the implementation of 
REVIEWS AND  
recommendations on charge-card-related findings.   
Non-Federal Audits, April 1, 2016,  
INVESTIGATIONS 
In addition, while not required for this report, we also 
through September 30, 2016
explain how we intend to conduct required annual risk 
assessments of agency purchase cards.
      Number of Non-Federal Audits 
Not requiring changes or having minor changes  579 A-04-14-06175    January 2015
  Requiring major changes  16
  Having significant technical inadequacies  0
  Total  595 Legislative and Regulatory Reviews 
The 595 reports included 2,137 recommendations for  Pursuant to the Inspector General Act,  4(a)(2), OIG is 
improving management operations.  In addition, these  required to review existing and proposed legislation and 
audit reports provided information for 20 OIG special  regulations relating to HHSs programs and operations 
memorandums that identified concerns for increased  and make recommendations concerning their impact on 
monitoring by management. economy and efficiency or the prevention and detection 
of fraud and abuse.  Most audits and other reviews that 
we conduct are designed to test compliance with and/or 
Other Reporting  
assess the administration and oversight of existing laws 
and regulations.  Our reports of such reviews describe 
Requirements and Reviews
findings, which include questioned costs, inefficiencies, 
vulnerabilities to fraud, inconsistencies, errors in 
Government Charge Card Abuse Prevention Act 
application, or weaknesses in oversight or supporting 
systems.  Our corresponding recommendations tell HHS 
Letter to Office of Management and Budget Director to Meet 
and its operating or staff divisions what administrative, 
Requirements of Government Charge Card Abuse Prevention 
regulatory, or legislative actions we believe are needed 
Act of 2012 Regarding Agency Progress Implementing 
to effectively respond to the findings.  Our regularly 
Recommendations on Charge-Card-Related Findings published core publications reflect the relationship 
This letter report describes the progress that HHS has  between our work and laws and regulations.
made in implementing previous purchase and travel 
  Our Semiannual Report to Congress describes 
card audit recommendations and the status of OIGs 
findings and recommendations from recently 
annual risk assessment.  The letter was issued to meet 
completed reviews, many of which focus on 
the requirements of the Government Charge Card 
existing laws and regulations.  
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  45   Our Compendium of Unimplemented  State-Based Marketplaces
OTHER  
Recommendations describes priority findings and 
HHS-RELATED 
recommendations from past periods that remain  The ACA requires the establishment of a health 
REVIEWS AND   to be implemented.   insurance exchange (marketplace) in each State and the 
INVESTIGATIONS  District of Columbia.  A marketplace is designed to serve 
  Our annual Work Plan and Mid-Year Update 
as a one-stop shop at which individuals get information 
provides citations to laws and regulations that  
about their health insurance options; are evaluated for 
are the subject of ongoing or future reviews.
eligibility for a qualified health plan and, when applicable, 
We also review proposed legislation and regulations  eligibility for insurance affordability programs; and enroll 
related to HHS programs and operations.  HHS routinely  in the qualified health plan of their choice.  A previous 
involves us and its operating and other staff divisions in  OIG review found that not all internal controls 
the review and development of HHS regulations through  implemented by the Federally Facilitated Marketplace 
a well-established HHS process.  Our audits, evaluations,  and the State marketplaces in California and Connecticut 
and investigations are sometimes cited in regulatory  were effective in ensuring that individuals were enrolled 
preambles as influencing HHS regulations.  In addition,  in qualified health plans according to Federal 
we provide independent, objective technical assistance  requirements.  The review below is part of an ongoing 
on a bipartisan, bicameral basis to congressional  series that looks at seven State marketplaces across the 
committees and members who request it.  Nation and determines whether their marketplaces 
internal controls were effective in ensuring that 
individuals were enrolled in qualified health plans 
Implementation of Health  
according to Federal requirements.
Insurance Marketplaces
Vermont Did Not Properly Allocate Millions to Establishment 
OIG continues to review programs implemented 
Grants for a Health Insurance Marketplace
pursuant to the ACA.  OIGs ACA oversight strategy 
We found that Vermont did not always follow Federal 
focuses on the health insurance marketplaces, reforms 
requirements on allocating costs to its establishment 
in the Medicare and Medicaid programs, and public 
grants for implementing a health insurance marketplace 
health programs.  Key focus areas for our marketplace 
and drawing down establishment grant funds.  Vermont 
oversight include payment accuracy, eligibility, 
allocated $10.5 million using a cost allocation methodology 
management and administration, and security.  In 
that included a material defect, may not have allocated 
developing our work plan, we coordinate with GAO  
$13.9 million in costs in accordance with the relative 
and other Federal and State oversight agencies. 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  46 benefits that each grant program received, and drew  capital and surplus, 4 of the 12 CO-OPs approved for 
OTHER  
down establishment grant funds that exceeded actual  conversions ceased operations within 6 months after 
HHS-RELATED 
program costs by $736,000. the conversion.  Despite the conversions allowing 
REVIEWS AND  
CO-OPs to record the startup loans as capital and 
INVESTIGATIONS  Vermont did not fully address our first recommendation 
surplus instead of debt, risk-based capital percentages 
but stated it would work with CMS to determine the 
were at levels below the CMS requirement of 500 
appropriate action to amend its Cost Allocation Plan  
percent for four of the eight operational CO-OPs as  
and either refund $10.5 million or work with CMS to 
of December 31, 2015. 
determine the appropriate allocation to the 
establishment grants. CMS concurred with our recommendations that it 
perform the following steps prior to approving 
A-01-15-02500    September 2016 additional conversions of startup loans to surplus  
notes:  (1) document any potential negative impact from 
changes in distribution priority and (2) quantify the likely 
Payments and Policies impact on the Federal Governments ability to recover 
loan payments.
Conversions of Startup Loans Into Surplus Notes  
A-05-16-00019    August 2016
by Consumer Operated and Oriented Plans Were  
Allowable but Not Always Effective
CMS established loan agreements with Consumer 
Operated and Oriented Plans (CO-OPs) to provide 
startup and solvency loan funding.  CMS issued a memo 
to the CO-OPs in July 2015 allowing the CO-OPs to 
convert startup loans into surplus notes.  A surplus  
note is a bondlike instrument issued to provide needed 
capital.  Under the terms of a surplus note, CO-OPs are 
not required to make any repayment on the surplus 
note that could lead to financial distress or default.   
We determined that the CO-OPs complied with CMS 
guidance and applicable accounting principles when 
converting startup loans into surplus notes.  However, 
CMS did not adequately document the potential impact 
of the conversions on the Federal Governments ability 
to recover the loan payments if the CO-OPs were to fail.  
Although the conversions provided increased levels of 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  47  
s
e
x
Appendix A
i
d
Savings Decisions Supported by OIG Recommendations 
n
e
The table on the following page lists policy decisions reflected in legislation, regulations, or other directives from prior 
p
years that are supported by OIG recommendations and for which cost savings were estimated, usually by third parties, 
p
such as the Congressional Budget Office (CBO) or HHS actuaries.  Of the savings estimated for the decisions below, nearly  
A
$22.1 billion was attributed to FY 2016.  This figure reflects the most recent available savings estimates issued by the  
third-party appraiser; actual savings may be higher or lower.  
After laws involving HHS programs are enacted, OIG analyzes the laws to identify the provisions that comport with our 
prior recommendations, that is, whether our recommendations support the decisions that were made.  A similar process 
occurs with respect to administrative decisions in regulations or other directives or agreements, e.g., modifications to 
Medicaid State Plans.  Most of the decisions reported in this appendix reflect ways in which funds could be put to better 
use, such as reductions in Federal spending or the avoidance of unnecessary or inappropriate expenditures, or both.  
To quantify the value of administrative decisions, we use estimates developed by, or in consultation with, HHS operating 
or staff divisions.  To quantify the value of legislative decisions, we generally use estimates developed by CBO.  CBO 
projects the annual increases or reductions in Federal spending that it expects would result from enacting the legislation.  
The policy decisions shown below mirror not only OIGs recommendations but also the contributions of others, such as 
HHS staff and operating divisions, congressional committees, and the GAO.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  48 Centers for Medicare & Medicaid Services (CMS) Programs
Estimated 
Savings 
APPENDIXES OIG Recommendations Policy Decisions (millions)
Medicare Part C Prepayments.  Section 3201 of the ACA changed the Medicare Advantage  $19,200
Modify monthly capitated payments to a level fully  benchmark percentages that are applied to Medicare fee-for-service 
supported by empirical data. The recommendation  and imposed a cap on the benchmarks, resulting in cost savings for 
reflected findings in OIG report number   Medicare Part C as compared to prior law.  CBO estimated Part C 
A-14-00-00212. savings through FY 2019, including $19.2 billion for FY 2016.   
CBO produced its estimate in 2010, prior to two significant 
implementation decisions by HHS that affect the actual savings; 
however, neither CBO nor HHS has calculated a revised estimate.
Excessive Medicaid Payments to   New Yorks Medicaid State Plan Amendment 12-03, effective   $799
New York Developmental Centers.   April 1, 2013, limits payment to costs with projected annual  
Ensure that New Yorks Medicaid daily rate for  savings of nearly $799 million.
State-operated developmental centers meets the 
Federal requirement that payment for services be 
consistent with efficiency and economy.  The 
recommendation reflected findings in OIG  
report number A-02-11-01029.
Part B Drugs Average Sales Price.   Section 112 of the Medicare, Medicaid, and State Childrens Health  $400
Adopt an alternate calculation of volume-weighted  Insurance Program (SCHIP) Extension Act of 2007 establishes a 
average sales price (ASP) that is consistent with the  revised method for calculating volume-weighted ASPs for Medicare 
results set forth in section 1847A(b)(3) of the Social  Part B drugs that comports with OIGs recommendation.  CBO 
Security Act.  The recommendation reflected  estimated savings of $400 million for FY 2016.
findings in OIG report number OEI-03-05-00310.
Reductions in Medicare Bad Debt  Section 3201 of the Middle Class Tax Extension and Job Creation   $1,060
Reimbursement.   Act of 2012 applied percentage reductions in bad debt 
Seek legislative authority to eliminate (or reduce)  reimbursement to all providers eligible to receive bad debt 
Medicare payments to hospitals for bad debt  reimbursement.  CMS estimated savings to Medicare of  
associated with beneficiaries failure to   $10.92 billion over 10 years with $1.06 billion attributed  
pay their deductibles and coinsurance.  The  to FY 2016.  (77 Fed. Reg. 67,450, 67,523 (November 9, 2012))
recommendations reflected findings in OIG report 
number A-14-90-00339 and subsequent reviews.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  49 Centers for Medicare & Medicaid Services (CMS) Programs
Estimated 
Savings 
APPENDIXES OIG Recommendations Policy Decisions (millions)
Additional Rebates for Brand-Name Drugs With  Section 2501(d) of the ACA, as amended by section 1206(a) of the  $200
Multiple Versions.   Health Care and Education Reconciliation Act of 2010, addresses  
OIG recommended that CMS continue to seek  this issue.  CBO estimated savings of $200 million for FY 2016.
legislative authority to modify the rebate formula 
calculation to ensure that manufacturers cannot 
circumvent additional rebates by bringing new 
versions of existing brand-name drugs to market.  
The recommendation reflected findings in  
OIG report number A-06-09-00033.
Medicare Secondary Payer.  Section 111 of the Medicare, Medicaid, and SCHIP Extension Act   $200
Implement stronger followup procedures for  of 2007 amended the Medicare secondary payer provisions of the 
employers who fail to respond to data requests,  Social Security Act,  1862(b), to provide for mandatory reporting  
exercise civil monetary penalty authority, and seek  for various categories.  CBO estimated savings of $200 million  
necessary legislative authority for mandatory data  for FY 2016.
reporting.  The recommendations reflected findings 
in the following OIG reports: 
A-02-98-01036
A-02-02-01037
A-02-02-01038 
A-04-01-07002 
A-09-89-00100
Medicare Payments for Vacuum Erection Systems.   Section 203 of the Achieving a Better Life Experience Act of 2014  $44.4
Seek legislative authority to include vacuum  implements changes to treat VES prosthetic devices and related 
erection systems (VES) in the Competitive   accessories as statutorily noncovered in the same manner that 
Bidding program and then implement a National  erectile dysfunction drugs are treated in Medicare Part D.  CBO 
Mail-Order Competitive Bidding program for VES.   estimated savings of $444 million over 10 years.
The recommendation reflected findings in OIG 
report number A-07-12-05024.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  50 Centers for Medicare & Medicaid Services (CMS) Programs
Estimated 
Savings 
APPENDIXES OIG Recommendations Policy Decisions (millions)
Payments for Prescription Drugs Provided   CMS issued a final rule about the Contract Year 2015 Policy and  $90
to Incarcerated Beneficiaries.   Technical Changes to the Medicare Advantage and the Medicare 
Work with prescription drug plan sponsors to  Prescription Drug programs.  The eligibility requirements to enroll in 
identify and resolve improper Medicare Part D  Medicare Advantage and Part D are outlined in Sections 1851(a)(3)(B) 
payments made for prescription drugs provided to  and 1860D-1(a)(3)(A) of the Act.  To enroll in Medicare Advantage, a 
incarcerated beneficiaries.  The recommendation  beneficiary must be entitled to Part A and enrolled in Part B.  To enroll 
reflected findings in OIG report number   in Part D, a beneficiary must be entitled to Part A and/or enrolled in 
A-07-12-06035. Part B.  An incarcerated beneficiary is not precluded from meeting the 
eligibility requirements for Part A and Part B, but in general, no 
Medicare Payment is made for these individuals. CMS promulgated 
regulations to require Part D plans to disenroll incarcerated 
beneficiaries.  CMS estimated savings of $1.6 billion over 10 years 
with $90 million attributed to FY 2016.  (79 Fed.  Reg.29,844, 29,953 
(May 23, 2014))
Excessive Medicaid Payments to New York State.   Agreement between CMS and the State of New York, dated   $100
Ensure that expenditures related to developmental  March 20, 2015, to repay $1.95 billion over 12 years with  
centers and other intermediate care facilities and  $100 million attributed to FY 2016.
any revised payment methodology be consistent 
with efficiency and economy.  The recommendation 
reflected findings in OIG reports A-02-11-01029, 
A-02-13-01008, and other reviews.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  51 Appendix B  
Monetary Recommendations
APPENDIXES
The tables below summarize OIGs monetary recommendations and HHS responses.  This information is provided in 
accordance with the Inspector General Act,  5(a)(8) and (a)(9), (5 U.S.C. App.  5(a)(8) and (a)(9)), and with the 
Supplemental Appropriations and Rescissions Act of 1980.
Table 1  Audit Reports with Questioned Costs
Reports Dollar Value Questioned Dollar Value Unsupported
Section 1
Reports for which no management decisions had been  146 $644,920,000 $19,315,000
made by the beginning of the reporting period1
Reports issued during the reporting period 67 $320,514,000 $55,000
Total Section 1 213 $965,434,000 $19,370,000
Section 2
Reports for which management decisions were made during the reporting period2, 3
Disallowed costs 120 *$575,846,000 $1,169,000
Costs not disallowed 6 $26,868,000  $0
Total Section 2 126 $602,714,000 $1,169,000
*Audit receivables (expected recoveries).
Section 3
Reports for which no management decisions had   87 $362,720,000 $18,201,000
been made by the end of the reporting period  
(Sec. 1 minus Sec. 2)
Section 4
Reports for which no management decisions were   46 $151,589,000 $18,145,000
made within 6 months of issuance4
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  52 Audit Reports With Funds Recommended To Be Put to Better Use 
The phrase recommendations that funds be put to better use means that funds could be used more efficiently  
if management took action to implement an OIG recommendation through reductions in outlays, deobligation of  
funds, and/or avoidance of unnecessary expenditures.  Table 2 reports HHS program officials decisions to take  
APPENDIXES
action on these audit recommendations.
Table 2  Audit Reports with Funds To Be Put to Better Use
Reports Dollar Values
Section 1
Reports for which no management decisions had been   5 $15,020,135,000
made by the beginning of the reporting period1
Reports issued during the reporting period 7 $37,149,000
Total Section 1 12 $15,057,284,000
Section 2
Reports for which management decisions were made during the reporting period
Value of recommendations agreed to by management
Based on proposed management action 1 $6,388,000
Based on proposed legislative action $0
Value of recommendations not agreed to by management 1 $28,000
Total Section 2 2 $6,416,000
Section 3
Reports for which no management decisions had been made  10
$15,050,868,000
by the end of the reporting period2 (Sec. 1 minus Sec. 2)
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  53 End Notes 
Table 1 End Notes
APPENDIXES 1 T  he opening balance was adjusted upward by $211.3 million because of a reevaluation of previously issued 
recommendations.
2 R evisions to previously reported management decisions:
  A-01-13-00506 Nationwide Review of Place of Service Coding for Physician Services Processed by Part B Contractors 
for Calendar Years 2010 through 2012.  Subsequent review by CMS determined that the $1,408,649 of the  
$7.3 million were allowable cost.
  A-04-12-07032 Medicare Compliance Review at JFK Medical Center.  Subsequent review by CMS of the OIGs 
extrapolation led to a downward adjustment in unallowable claims totaling $4,183,075.
  A-05-14-00023 Review of Illinois Medicaid Payments for Drug Herceptin.  Subsequent review by CMS determined 
additional offsets, increasing disallowed cost by $496,038.
  A-06-14-00022 Outpatient Dental Claims  National Government Services.  Subsequent review by CMS determined 
most of the claims identified were canceled by providers, reducing disallowed cost by $1,973,933.
  Not detailed are net reductions to previously disallowed management decisions totaling $5.6 million.
3 I ncluded are management decisions to disallow $39.9 million in questioned costs that were identified by non-Federal 
auditors in audits of State and local governments, colleges and universities, and nonprofit organizations receiving 
Federal awards conducted in accordance with OMB Circular A-133.  OIG is currently ensuring that work performed  
by these non-Federal auditors complies with Federal audit standards; accordingly, OIG tracks, resolves, and reports  
on recommendations in these audits.
4 B  ecause of administrative delays, some of which were beyond management control, resolution of the following  
46 audits was not completed within 6 months of issuance of the reports; however, agency management has informed 
us that the agency is working to resolve the outstanding recommendations before the end of the next semiannual 
reporting period: 
CIN: A-01-02-00006  R  EVIEW OF RATE SETTING METHODOLOGY FOR MEDICAID SCHOOL BASED HEALTH  
SERVICES - CT, MAY 2003, $32,780,146
CIN: A-01-14-02503  R  EVIEW OF MD STATE AGENCY PROCESSES FOR DESIGN & IMPLEMENTATION OF  
THE STATES HEALTH INSURANCE EXCHANGE, MAR 2015, $28,400,000
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  54 CIN: A-07-13-01125  MEDICARE PART C UNLAWFULLY PRESENT ENROLLEES, APR 2014, $26,150,043
CIN: A-02-12-02016  P UERTO RICO IMPROPERLY CLAIMED SOME CHILD CARE AND DEVELOPMENT TARGETED 
FUNDS, JAN 2016, $12,471,385
APPENDIXES
CIN: A-09-14-02037  REVIEW OF INPATIENT BONE MARROW AND STEM CELL TRANSPLANTS, FEB 2016, $4,574,228
CIN: A-03-12-00004  REVIEW OF HORIZONS 2009 AND 2010 BONA FIDE SERVICE FEES, MAR 2013, $4,344,417
CIN: A-02-12-02012   N  EW YORK IMPROPERLY CLAIMED SOME CHILD CARE AND DEVELOPMENT TARGETED FUNDS, 
JUL 2015, $3,827,836
CIN: A-05-13-00014  O   HIO EXCEEDED THE 5-PERCENT LIMIT FOR CLAIMING CHILD CARE DEVELOPMENT FUND 
ADMINISTRATIVE EXPENDITURES, NOV 2013, $3,164,630
CIN: A-03-13-00024  R  EVIEW OF NEW ORLEANS REGIONAL PHYSICIAN HOSPITAL ORGANIZATION, INC.S 2009,  
2010, AND 2011 BONA FIDE SERVICE FEES, APR 2014, $2,880,698
CIN: A-03-13-00025  R  EVIEW OF UAB HEALTH SYSTEMS 2009, 2010, AND 2011 BONA FIDE SERVICE FEES,  
JAN 2014, $2,812,109
CIN: A-03-13-00026   R  EVIEW OF USABLE MUTUALS (ARKANSAS BLUE CROSS BLUE SHIELD) 2009, 2010, AND 2011 
BONA FIDA SERVICE FEES, JAN 2014, $2,763,821
CIN: A-03-11-00002   REVIEW OF NEW ENGLAND JOINT ENTERPRISE 2009 DIR REPORTS, APR 2012, $2,710,732
CIN: A-03-12-00006  REVIEW OF TAHMOS 2009 AND 2010 BONA FIDE SERVICE FEES, MAR 2013, $2,355,532
CIN: A-03-13-00020    R  EVIEW OF CAPITAL DISTRICT PHYSICIANS HEALTH PLAN, INC.S 2009, 2010, AND 2011  
BONA FIDE SERVICE FEES, JAN 2014, $2,070,605
CIN: A-03-12-00007  REVIEW OF ARCADIANS 2009 AND 2010 BONA FIDE SERVICE FEES, FEB 2013, $2,048,967
CIN: A-03-12-00005  REVIEW OF WINDSORS 2009 AND 2010 BONA FIDE SERVICE FEES, JAN 2013, $1,948,737
CIN: A-03-13-00018  R  EVIEW OF AMERIGROUP CORPORATIONS 2009, 2010, AND 2011 BONA FIDE SERVICE FEES, 
JAN 2014, $1,943,251
CIN: A-03-13-00019  R  EVIEW OF BLUECROSS BLUESHIELD OF SOUTH CAROLINAS 2009, 2010, AND 2011 BONA FIDE 
SERVICE FEES, DEC 2013, $1,799,096
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  55 CIN: A-07-11-06013  I NDIRECT COSTS CLAIMED AS DIRECT COSTS - UNIVERSITY OF COLORADO DENVER, JUN 2013, 
$1,419,524
CIN: A-03-12-00008  REVIEW OF XL HEALTH DIR, JAN 2013, $1,410,342
APPENDIXES
CIN: A-03-13-00021  R  EVIEW OF FALLON COMMUNITY HEALTH PLANS 2009, 2010, AND 2011 BONA FIDE SERVICE 
FEES, JAN 2014, $1,079,578
CIN: A-05-12-00089  T HE COUNCIL ON RURAL SERVICE PROGRAMS, INC., CLAIMED UNALLOWABLE HEAD START 
COSTS, NOV 2013, $1,074,352
CIN: A-06-15-00013  MEDICARE OUTPATIENT DENTAL CLAIMS - FCSO (JN), MAR 2016, $1,065,486
CIN: A-03-13-00022   R  EVIEW OF MD CARE, INC.S 2009, 2010, AND 2011 BONA FIDE SERVICE FEES, JAN 2014, 
$1,040,501
CIN: A-03-13-00023  R  EVIEW OF NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATIONS 2009, 2010, AND 2011 
BONA FIDE SERVICE FEES, JAN 2014, $957,921
CIN: A-09-14-01007  REVIEW OF NEVADA HEALTH EXCHANGE ESTABLISHMENT GRANTS, FEB 2016, $893,464
CIN: A-09-11-01007   REVIEW OF CSBG RECOVERY ACT COSTS CLAIMED BY HI FOR HCAP, FEB 2013, $513,649
CIN: A-04-13-01024  A  LLOWABILITY OF SELECTED COSTS CHARGED TO FEDERAL GRANTS AND CONTRACTS UNC,  
JUN 2014, $352,843
CIN: A-03-15-00006   C  ORNERSTONE HOSPITAL OF BOSSIER CITY INCORRECTLY BILLED MEDICARE INPATIENT CLAIMS 
WITH KWASHIORKOR, MAR 2016, $321,971
CIN: A-01-10-02505  RESULTS OF LIMITED SCOPE REVIEW OF CTE, INC., MAY 2011, $293,870
CIN: A-02-11-02015  R  EVIEW OF INSEC, INC. CSBG ARRA COSTS CLAIMED BY THE COMMONWEALTH OF PUERTO 
RICO, APR 2013, $285,412
CIN: A-02-11-02017  N  EW JERSEY CLAIMED UNALLOWABLE COMMUNITY SERVICES BLOCK GRANT COSTS INCURRED 
BY CHECK-MATE INC., UNDER THE RECOVERY ACT, AUG 2014, $246,359
CIN: A-09-09-00045  R  ISK ADJUSTMENT DATA VALIDATION OF PAYMENTS MADE TO PACIFICARE OF CALIFORNIA  
FOR CALENDAR YEAR 2007 (CONTRACT H0543), NOV 2012, $224,388
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  56 CIN: A-05-12-00012   REVIEW OF IL CSBG RECOVERY ACT COSTS CLAIMED - ROCKFORD, JUL 2013, $205,296
CIN: A-06-09-00012  RISK ADJUSTMENT DATA VALIDATION - PACIFICARE H4590, MAY 2012, $183,247
CIN: A-04-11-01004  N  ORTHEAST FLORIDA COMMUNITY ACTION AGENCY, INC.S CSBG FUNDS AWARDED  
APPENDIXES
UNDER THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009, SEP 2012, $165,795
CIN: A-04-11-01008  F LORIDAS ADMINISTRATION OF CSBG RECOVERY ACT PROGRAM AND COSTS CLAIMED BY 
CENTRAL FLORIDA COMMUNITY ACTION AGENCY, INC., APR 2013, $160,404
CIN: A-07-11-02766  REVIEW OF WY CSBG RECOVERY ACT COSTS CLAIMED - CARBON COUNTY, AUG 2013, $143,588
CIN: A-09-11-01013  R  EVIEW OF OREGONS HOUSING AND COMMUNITY SERVICES DEPARTMENT, APR 2013, $115,911
CIN: A-06-11-00058  R  EVIEW OF CSBG ARRA COSTS CLAIMED BY CROWLEYS RIDGE DEVELOPMENT COUNCIL,  
AUG 2012, $115,420
CIN: A-07-12-02779  REVIEW OF NATRONA COUNTY CSBG RECOVERY ACT COSTS CLAIMED, JUN 2013, $104,971
CIN: A-02-14-02013  L INK2HEALTH SOLUTIONS, INC., BUDGETED COSTS THAT WERE NOT APPROPRIATE AND 
CLAIMED SOME UNALLOWABLE HURRICANE SANDY DISASTER RELIEF ACT FUNDS, MAR 2016, 
$54,822
CIN: A-04-14-04028  A  UDIT OF NC DHHS PPHF GRANTS AND COOPERATIVE AGREEMENTS AWARDED BY CDC,  
JAN 2016, $50,485
CIN: A-02-11-02000   DIRECT COST REVIEW - SUNY ALBANY, OCT 2011, $27,384
CIN: A-09-11-01014  R  EVIEW OF CSBG RECOVERY ACT COSTS CLAIMED BY HI FOR THE HAWAII COUNTY ECONOMIC 
OPPORTUNITY COUNCIL, JUL 2012, $22,602
CIN: A-05-11-00053  T HE COLUMBUS URBAN LEAGUE CLAIMED SOME UNALLOWABLE COSTS TO HEAD START,  
SEP 2012, $13,102
  TOTAL CINS:   46
       TOTAL AMOUNT:  $151,589,000
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  57 Table 2 End Notes
1 The opening balance had no prior period adjustments of previously issued recommendations. 
2 B  ecause of administrative delays, some of which were beyond management control, 4 of the 10 audits open at end of 
APPENDIXES
the period were not resolved within 6 months of issuance of reports.  OIG is working with management to reach 
resolution on these recommendations before the end of the next semiannual reporting period:
CIN: A-05-12-00020  C  omparison of Surgical Services Provided in the ASC Setting to Other Outpatient Settings, APRIL 
2014, $15,000,000,000
CIN: A-07-13-02795  Review of Palmetto Medicare Outlier Processing Timeliness for J1, JUL 2015, $15,792,301
CIN: A-09-14-02037  Review of Inpatient Bone Marrow and Stem Cell Transplants, FEB 2016, $3,821,519
CIN: A-04-14-04028  A  udit of NC DHHS PPHF Grants and Cooperative Agreements Awarded by CDC, JAN 2016, 
$493,401
        TOTAL CINS:   4
TOTAL AMOUNT:  $15,020,107,000
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  58 Appendix C 
Peer Review Results
APPENDIXES
The Inspector General Act of 1978, as amended, requires OIGs to report the results of peer reviews of their operations 
conducted by other OIGs, the date of the last peer review, outstanding recommendations from peer reviews, and peer 
reviews conducted by the OIG of other OIGs in the semiannual period.  Peer reviews are conducted by member 
organizations of the Council of the Inspectors General on Integrity and Efficiency (CIGIE).  The required information follows.
Office of Audit Services
During this semiannual reporting period, no peer reviews involving the Office of Audit Services (OAS) were completed.  
Listed below is information concerning OASs peer review activities during prior reporting periods.
Date Reviewing Office Office Reviewed
OAS
May 2015 Department of Transportation HHS OIG, OAS
The system of quality control for the audit organization of HHS OIG in effect for the year ending September 30, 2014, has 
been suitably designed and complied with to provide HHS OIG with reasonable assurance of performing and reporting in 
conformity with applicable professional standards in all material respects.  Federal audit organizations can receive a rating 
of pass, pass with deficiencies, or fail.  HHS OIG received a peer review rating of pass.
Date Reviewing Office Office Reviewed
OAS
December 2015 HHS OIG, OAS U.S. Department of Agriculture 
(USDA)
The system of quality control for the audit organization of USDA OIG in effect for the year ending March 31, 2015, has 
been suitably designed and complied with to provide USDA OIG with reasonable assurance of performing and reporting 
in conformity with applicable professional standards in all material respects.  Federal audit organizations can receive a 
rating of pass, pass with deficiencies, or fail.  USDA OIG received a peer review rating of pass.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  59 Office of Investigations
During this semiannual reporting period, no peer reviews involving Office of Investigations (OI) were completed.  Listed 
below is information concerning OIs peer review activities during prior reporting periods.
APPENDIXES
Date Reviewing Office Office Reviewed
OI
August 2015 DOL-OIG HHS OIG, OI
The system of internal safeguards and management procedures for the investigative function of HHS OIG in effect for the 
year ending September 30, 2015, was in full compliance with the quality standards established by CIGIE and the Attorney 
Generals guidelines.
Date Reviewing Office Office Reviewed
OI
June 2014 HHS OIG, OI TIGTA
The system of internal safeguards and management procedures for the investigative function of TIGTA in effect through 
June 2014 was in full compliance with the quality standards established by CIGIE and the Attorney Generals guidelines.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  60 Appendix D
Summary of Sanction Authorities
APPENDIXES
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following table along with 
the location of the required information.
Program Exclusions
The Social Security Act,  1128 (42 U.S.C.  1320a-7), provides several grounds for excluding individuals and entities from 
participation in Medicare, Medicaid, and other Federal health care programs.  Exclusions are required for individuals and 
entities convicted of the following types of criminal offenses:  (1) Medicare or Medicaid fraud; (2) patient abuse or 
neglect; (3) felonies for other health care fraud; and (4) felonies for illegal manufacture, distribution, prescription,  
or dispensing of controlled substances.  
OIG is authorized to exclude individuals and entities on several other grounds, including misdemeanors for other health 
care fraud (other than Medicare or Medicaid) or for illegal manufacture, distribution, prescription, or dispensing of 
controlled substances; suspension or revocation of a license to provide health care for reasons bearing on professional 
competence, professional performance, or financial integrity; provision of unnecessary or substandard services; submission 
of false or fraudulent claims to a Federal health care program; or engaging in unlawful kickback arrangements.
The ACA added another basis for imposing a permissive exclusion, that is, knowingly making, or causing to be made, any 
false statements or omissions in any application, bid, or contract to participate as a provider in a Federal health care 
program, including managed care programs under Medicare and Medicaid, as well as Medicares prescription drug program.
Providers subject to exclusion are granted due process rights.  These include a hearing before an administrative law judge 
and appeals to the HHS Departmental Appeals Board and Federal district and appellate courts regarding the basis for and 
the length of the exclusion.
Civil Monetary Penalties Law
The CMPL of the Social Security Act, 1128A (42 U.S.C.  1320a 7a), imposes penalties, assessments, and exclusion from 
participation in Federal health care programs for engaging in certain activities.  For example, a person who submits, or 
causes to be submitted, to a Federal health care program a claim for items and services that the person knows, or should 
know, is false or fraudulent is subject to a penalty of up to $10,000 for each item or service falsely or fraudulently 
claimed, an assessment of up to three times the amount falsely or fraudulently claimed, and exclusion.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  61 For the purposes of the CMPL, should know is defined to mean that the person acted in reckless disregard or 
deliberate ignorance of the truth or falsity of the claim.  The law and its implementing regulations also authorize actions 
for a variety of other violations, including submission of claims for items or services furnished by an excluded person; 
requests for payment in violation of an assignment agreement; violations of rules regarding the possession, use, and 
APPENDIXES
transfer of biological agents and toxins; and payment or receipt of remuneration in violation of the anti-kickback statute 
(42 U.S.C.  1320a 7b(b)).
The ACA added more grounds for imposing CMPs.  These include, among other types of conduct, knowingly making, or 
causing to be made, any false statements or omissions in any application, bid, or contract to participate as a provider in a 
Federal health care program (including Medicare and Medicaid managed care programs and Medicare Part D); the ACA 
authorizes a penalty of up to $50,000 for each false statement, as well as activities relating to fraudulent marketing by 
managed care organizations, their employees, or their agents. 
Patient Dumping
The Social Security Act,  1867 (42 U.S.C.  1395dd), provides that when an individual goes to the emergency room of a 
Medicare-participating hospital, the hospital must provide an appropriate medical screening examination to determine 
whether that individual has an emergency medical condition.  If an individual has such a condition, the hospital must 
provide either treatment to stabilize the condition or an appropriate transfer to another medical facility.
If a transfer is ordered, the transferring hospital must provide stabilizing treatment to minimize the risks of transfer and 
must ensure that the receiving hospital agrees to the transfer and has available space and qualified personnel to treat the 
individual.  In addition, the transferring hospital must effect the transfer through qualified personnel and transportation 
equipment.  Further, a participating hospital with specialized capabilities or facilities may not refuse to accept an 
appropriate transfer of an individual who needs services if the hospital has the capacity to treat the individual.
OIG is authorized to collect CMPs of up to $25,000 against small hospitals (fewer than 100 beds) and up to $50,000 
against larger hospitals (100 beds or more) for each instance in which the hospital negligently violated any of the section 
1867 requirements.  In addition, OIG may collect a penalty of up to $50,000 from a responsible physician for each 
negligent violation of any of the section 1867 requirements and, in some circumstances, may exclude a responsible 
physician.
Anti-Kickback Statute and Civil False Claims Act Enforcement Authorities
The Anti-Kickback Statute  The anti-kickback statute authorizes penalties against anyone who knowingly and willfully 
solicits, receives, offers, or pays remuneration, in cash or in kind, to induce or in return for (1) referring an individual to a 
person or an entity for the furnishing, or arranging for the furnishing, of any item or service payable under the Federal 
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  62 health care programs or (2) purchasing, leasing, or ordering, or arranging for or recommending the purchasing, leasing, 
or ordering, of any good, facility, service, or item payable under the Federal health care programs.  Social Security Act,  
 1128B(b) (42 U.S.C.  1320a-7b(b)).
APPENDIXES Individuals and entities that engage in unlawful referral or kickback schemes may be subject to criminal penalties under 
the general criminal anti-kickback statute; a CMP under OIGs authority pursuant to the Social Security Act,  1127(a)(7) 
(42 U.S.C.  1320a-7a); and/or program exclusion under OIGs permissive exclusion authority under the Social Security 
Act,  1128(b)(7) (42 U.S.C.  1320a-7(b)(7)).
The False Claims Act  Under the False Claims Act, as amended by the False Claims Amendments Act of 1986 (FCA)  
(31 U.S.C.  37293733), a person or an entity is liable for up to treble damages and a penalty between $5,500 and 
$11,000 for each false claim it knowingly submits, or causes to be submitted, to a Federal program.  Similarly, a person  
or an entity is liable under the FCA if it knowingly makes or uses, or causes to be made or used, a false record or 
statement to have a false claim paid.
The FCA defines knowing to include not only the traditional definition but also instances in which the person acted in 
deliberate ignorance or reckless disregard of the truth or falsity of the information.  Under the FCA, no specific intent to 
defraud is required.  Further, the FCA contains a qui tam, or whistleblower, provision that allows a private individual to file 
a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any fraud recoveries.  The FCA 
was again amended in 2009 in response to recent Federal court decisions that narrowed the laws applicability.  Among 
other things, these amendments clarify the reach of the FCA to false claims submitted to contractors or grantees of the 
Federal Government.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  63 Appendix E 
Reporting Requirements in the Inspector General Act of 1978 
APPENDIXES
The reporting requirements of the Inspector General Act of 1978, as amended, are listed in the following table along with 
the location of the required information.
Section Requirement Location
Section 4
(a)(2) Review of legislation and regulations Other HHS-Related Issues section  
Section 5
(a)(1) Significant problems, abuses, and deficiencies Throughout this report
(a)(2) Recommendations with respect to significant problems, abuses, and  Throughout this report
deficiencies
(a)(3) Prior significant recommendations on which corrective action has not  OIG Compendium of Unimplemented 
been completed Recommendations
(a)(4) Matters referred to prosecutive authorities "Legal and Investigative Activities" section
(a)(5) Summary of instances in which information requested   None
by OIG was refused
(a)(6) List of audit reports Submitted to the Secretary under separate cover
(a)(7) Summary of significant reports Throughout this report
(a)(8) Statistical Table 1  Reports With Questioned Costs Appendix A
(a)(9) Statistical Table 2  Funds Recommended To Be Put to Better Use Appendix A
(a)(10) Summary of previous audit reports without management decisions Appendix A
(a)(11) Description and explanation of revised management decisions Appendix A
(a)(12) Management decisions with which the Inspector General disagrees None
(a)(13) Information required by the FISMA Reported annually in the spring Semiannual Report 
to Congress, "Other HHS-Related Issues" section
(a) Results of peer reviews of HHS-OIG conducted by other OIGs or the  Appendix B
(14)-(16) date of the last peer review, outstanding recommendations from peer 
reviews, and peer reviews conducted by HHS-OIG of other OIGs
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  64 Section Requirement Location
Other reporting requirements
845 Significant contract audits required to be reported pursuant to the  "Other HHS-Related Issues" section
APPENDIXES National Defense Authorization Act for FY 2008 (P.L. No. 110-181),  
 845.
205 Pursuant to HIPAA (P.L. No. 104-191),  205, the Inspector General   Reported annually in the fall Semiannual Report.  
is required to solicit proposals annually via a Federal Register   Appendix F 
notice for developing new and modifying existing safe harbors to  
the anti-kickback statute of the Social Security Act,  1128(b), and  
for developing special fraud alerts.  The Inspector General is also 
required to report annually to Congress on the status of the  
proposals received related to new or modified safe harbors.
1553 Pursuant to the American Recovery and Reinvestment Act of 2009,   "Other HHS-Related Issues" section
1553, OIG reports to Congress the retaliation complaint investigations 
it decided not to conduct or continue during the period.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  65 Appendix F 
Anti-Kickback Statute  Safe Harbors
APPENDIXES
Pursuant to HIPAA,  205, the Inspector General is required to solicit proposals annually via a Federal Register notice for 
developing new and modifying existing safe harbors to the anti-kickback statute, section 1128B(b) of the Social Security 
Act, and for developing special fraud alerts.  The Inspector General is also required to report annually to Congress on the 
status of the proposals received related to new or modified safe harbors. 
In crafting safe harbors for a criminal statute, it is incumbent upon the OIG to engage in a complete and careful review of 
the range of factual circumstances that may fall within the proposed safe harbor subject area to uncover all potential 
opportunities for fraud and abuse by unscrupulous providers.  Having done so, OIG must then determine, in consultation 
with DOJ, whether it can develop effective regulatory limitations and controlsnot only to foster beneficial or innocuous 
arrangements but also to protect the Federal health care programs and their beneficiaries from abusive practices.
Public proposals for new and modified safe harbors 
In response to the 2065 annual solicitation, OIG received the following proposals related to safe harbors:
Proposal OIG Response
A new safe harbor that would allow non-unit-based rebate  OIG is not adopting this suggestion at this time, as it requires 
arrangements between biopharmaceutical manufacturers and  further study.  In the meantime, questions about the application of 
payers to promote arrangements tying pricing of drugs to value and  the anti-kickback statute to such arrangements should be addressed 
protect the provision of data analytic support to Medicare and  on a case-by-case basis, such as under the advisory opinion process.
Medicaid providers and suppliers.
A new safe harbor that would permit value-based purchasing  OIG is not adopting this suggestion at this time, as it requires 
arrangements between biopharmaceutical manufacturers and  further study.  In the meantime, questions about the application of 
purchasers that would promote patient outcome-based pricing,  the anti-kickback statute to such arrangements should be addressed 
indication-specific pricing, and patient-specific pricing models. on a case-by-case basis, such as under the advisory opinion process.
A new safe harbor to protect financial arrangements between  OIG is not adopting this suggestion at this time, as it requires 
payers, providers, and/or manufacturers to support coverage and  further study.  In the meantime, questions about the application of 
payment methodologies that reward or penalize items and services  the anti-kickback statute to such arrangements should be addressed 
based on their achievement of value and/or cost savings.  Parties  on a case-by-case basis, such as under the advisory opinion process.
would be permitted to provide investments to design agreements 
and infrastructure, monitor patient outcomes, and analyze clinical 
information.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  66 A new safe harbor to protect and encourage arrangements that  OIG is not adopting this suggestion at this time, as it requires 
support patient adherence to a treatment regimen that has been  further study.  In the meantime, questions about the application of 
recommended by the patients health care provider. the anti-kickback statute to such arrangements should be addressed 
on a case-by-case basis, such as under the advisory opinion process. 
APPENDIXES
Extend existing safe harbor for donation and financial support of  OIG is not adopting the suggestion to extend the safe harbor.  With 
EHR software, related technology, and training beyond 2021 and  respect to modifying the safe harbor to ensure the range of relevant 
modify safe harbor to ensure the range of relevant and appropriate  and appropriate technologies are included based on the evolving 
technologies are included based on the evolving technological  technological environment, we are not adopting this suggestion at 
environment. this time, as it requires further study.  
A new safe harbor for financial arrangements that involve risk  OIG is not adopting this suggestion at this time.  Waivers of certain 
sharing and gainsharing in alternative payment models when  fraud and abuse laws, including the anti-kickback statute, have been 
appropriate safeguards are in place. issued or are being considered as needed in connection with the 
Medicare Shared Savings Program and specific models sponsored 
by the Centers for Medicare and Medicaid Innovation.  See Fraud 
and Abuse Waivers available at https://oig.hhs.gov/compliance/
accountable-care-organizations/index.asp.  Whether safe harbors 
are appropriate for the types of arrangements involved in these 
demonstrations requires further study.
A new safe harbor to broadly protect participants of Centers for  OIG is not adopting this suggestion at this time.  Waivers of certain 
Medicare and Medicaid Innovation programs from liability under  fraud and abuse laws, including the anti-kickback statute, have  
the anti-kickback statute. been issued or are being considered as needed in connection with 
specific models sponsored by the Centers for Medicare and 
Medicaid Innovation.  See Fraud and Abuse Waivers available at 
https://oig.hhs.gov/compliance/accountable-care-organizations/
index.asp.  Whether safe harbors are appropriate for the types  
of arrangements involved in these demonstrations requires  
further study.
A new safe harbor to permit incentive payment arrangements,  OIG is not adopting this suggestion at this time.  Waivers of certain 
including direct or indirect monetary remuneration or financial  fraud and abuse laws, including the anti-kickback statute, have been 
arrangements to support startup costs and support contributions,  issued or are being considered as needed in connection with the 
between hospitals and other providers who participate in advanced  Medicare Shared Savings Program and specific models sponsored 
payment models, as defined by CMS. by the Centers for Medicare and Medicaid Innovation.  See Fraud 
and Abuse Waivers available at https://oig.hhs.gov/compliance/
accountable-care-organizations/index.asp.  Whether safe harbors 
are appropriate for the types of arrangements involved in these 
demonstrations requires further study.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  67 Modification of the personal services and management contracts  OIG is not adopting this suggestion at this time, as it requires 
safe harbor to deem incentive payment arrangements between  further study.  Waivers of certain fraud and abuse laws, including 
providers participating in alternative payment models to be set in  the anti-kickback statute, have been issued or are being considered 
advance, consistent with fair market value, and not determined in a  as needed in connection with the Medicare Shared Savings Program 
APPENDIXES manner that takes into account the volume or value of referrals or  and specific models sponsored by the Centers for Medicare and 
other business generated between the parties, when the  Medicaid Innovation.  See Fraud and Abuse Waivers available at 
compensation methodology is based on the achievement of  https://oig.hhs.gov/compliance/accountable-care-organizations/
objective, evidence-based, quality measures and cost savings.   index.asp.  Whether modification of the personal services and 
management contracts safe harbor is appropriate for the types  
of arrangements involved in these demonstrations requires  
further study.
A new safe harbor that would protect items and services provided  OIG is not adopting this suggestion at this time.  We note that,  
to patients by a health care provider or supplier that are reasonably  on a related point, some arrangements under the proposal may  
related to a patients medical needs. be covered by the exception to the definition of remuneration for 
purposes of the civil monetary penalties law (CMPL) at section 
1128A.  A final rule regarding the implementation of an exception 
to the definition of remuneration for purposes of the CMPL under 
section 1128A(i)(6)(F) of the Act, 42 U.S.C. 1320a-7a(i)(6)(F) is 
under review.  OIG is considering whether a safe harbor to the 
anti-kickback statute is appropriate to protect the remuneration to 
beneficiaries in the same circumstances.  Any such safe harbor 
would be proposed in a new notice of proposed rulemaking.  In the 
meantime, questions about the application of the anti-kickback 
statute to such arrangements should be addressed on a case-by-
case basis, such as under the advisory opinion process.
HHS OIG Semiannual Report to Congress      |      April 1, 2016  September 30, 2016  68 U.S. Department of Health & Human Services 
Office of Inspector General 
http://oig.hhs.gov