The MEDIC 
Produced Some 
Positive Results but 
More Could be 
Done to Enhance 
its Effectiveness 
 
OEI-00-00-00000 
OEI-03-17-00310 
Month 201Y 
July 2018 
Daniel R. Levinson 
 
 
Inspector General 
oig.hhs.gov 
www.oig.hhs.gov  Report in Brief  U.S. Department of Health & Human Services 
July 2018 
Office  of Inspector General 
OEI-03-17-00310 
 
 
The MEDIC Produced Some Positive Results 
Why OIG Did This Review 
but More Could be Done to Enhance its  The MEDIC is CMSs benefit integrity 
contractor tasked with detecting and 
Effectiveness   
preventing fraud, waste, and abuse in 
Medicare Part C and Part D.  These 
What OIG Found 
programs involve billions of dollars in 
While the Medicare Drug Integrity Contractors (MEDICs) reported recoveries  expenditures and cover millions of 
resulted in a positive return on investment ($3 in recoveries for every $1  beneficiaries.  Therefore, effective, 
invested in 2017), the Centers for Medicare & Medicaid Services (CMS) has no  proactive oversight is essential to 
measures that specifically assess the MEDICs effectiveness.  Without specific  protect Medicare and its beneficiaries 
measures, it is unclear how CMS assesses the MEDICs effectiveness in fighting  from fraud, waste, and abuse.  OIG 
fraud.  The Office of Inspector Generals (OIGs) analysis of MEDIC activities and  conducted this evaluation in response 
responses from MEDIC staff provided insights into MEDIC operations that could  to a congressional mandate outlined 
lead to both enhanced MEDIC effectiveness and improved measures to gauge  in the Comprehensive Addiction and 
this effectiveness.      Recovery Act of 2016 (CARA).  CARA 
requires OIG to conduct a study and 
CMS directed the MEDIC to devote more resources to proactive data analysis 
submit a report on the effectiveness 
and administrative actions in 2014 and 2015, which led to a sharp increase in 
of the MEDICs efforts to identify, 
proactive data analysis, but a decrease in the MEDIC resources available to 
combat, and prevent fraud in 
follow up on the results of these analyses.  As a result, there have been fewer 
Medicare Part C and Part D.   
MEDIC investigations and referrals to law enforcement agencies, including OIG.  
The direction did lead to an initial upswing in administrative actions 
How OIG Did This Review 
(revocations and exclusions); however, those declined precipitously in 2017 due 
We analyzed Workload Statistic 
to other procedural changes.  Through its increased proactive analyses, the 
Reports related to the MEDICs Part C 
MEDIC was able to identify thousands of high-risk leads involving drugs, 
and Part D benefit integrity activities 
including opioids, from 2014 through 2017.  The impact of these activities, 
from fiscal years 2012 through 2017 to 
however, cannot be measured as plan sponsors are not required to report to 
determine how these activities have 
CMS the actions taken in response to these leads.    
changed throughout the years.  In 
In addition, MEDIC staff described numerous barriers that limit the MEDICs  addition, we followed up with the 
overall impact.  These barriers include the MEDICs lack of access to complete  MEDIC (Health Integrity, LLC, now 
Part C encounter data; its inability to recommend certain administrative actions,  Qlarant Integrity Solutions, LLC) to ask 
such as revocation of billing privileges, against Part C and Part D providers and  about its barriers and challenges in 
pharmacies not enrolled in Medicare; and its inability to obtain all requested  performing these activities.  From the 
medical records from pharmacies, providers, and pharmacy benefit managers.   MEDIC, we also requested its results 
regarding the identification of 
What OIG Recommends  
high-risk pharmacies and providers.  
We recommend that CMS (1) require plan sponsors to report fraud and abuse  To gauge the MEDICs financial 
incidents and the actions taken to address them; (2) provide the MEDIC with  effectiveness, we developed a return 
centralized access to all Part C encounter data; (3) require that Part C and  on investment measure comparing 
Part D providers/pharmacies enroll in Medicare; (4) clarify the MEDICs  the amount paid to the MEDIC with 
authority to require records from pharmacies, pharmacy benefit managers, and  actual recoveries reported by the 
other entities under contract with Part C and Part D plan sponsors; (5) ensure  MEDIC.  We reviewed information 
that the MEDIC has the ability to require medical records from prescribers of  from CMS regarding the measures 
Part D drugs not under contract with plan sponsors, obtaining legislative  and data it uses to determine the 
authority, if necessary; and (6) establish measures to assess the MEDICs  MEDICs overall effectiveness.     
effectiveness.  CMS did not concur with the third and fifth recommendations.  
Full report can be found at oig.hhs.gov/oei/reports/oei-03-17-00310.asp   
TABLE OF CONTENTS 
BACKGROUND  1 
Methodology  4 
   
FINDINGS   
The MEDIC returned $3 for every $1 it was paid in 2017, but its return on investment declined  6 
from 2016 to 2017 
CMS has no measures that specifically assess the MEDICs effectiveness in identifying fraud  7 
The MEDIC has increased its proactive data analyses, but the number of investigative results  8 
and administrative actions have declined 
The MEDIC identified thousands of leads involving drugs, but plan sponsors actions in  11 
response to these leads is unknown 
The MEDIC identified a number of factors that limit its ability to protect the Medicare program  14 
   
CONCLUSION AND RECOMMENDATIONS   
Require plan sponsors to report Part C and Part D fraud and abuse incidents and the  18 
corrective actions taken to address them to a centralized system 
Provide the MEDIC with centralized access to all Part C encounter data  19 
Require that Part C and Part D providers and pharmacies enroll in Medicare  19 
Clarify the MEDICs authority to require records from pharmacies, pharmacy benefit managers,  20 
and other entities under contract with Part C and Part D plan sponsors   
Ensure that the MEDIC has the ability to require medical records from prescribers of Part D  20 
drugs not under contract with plan sponsors, obtaining legislative authority, if necessary 
Establish measures to address the MEDICs effectiveness  21 
AGENCY COMMENTS AND OIG RESPONSE  22 
APPENDICES   
A: MEDIC Responsibilities    23 
B: Detailed Methodology    26 
C: Analysis of Additional Benefit Integrity Activities Conducted by the MEDIC  29 
D: Agency Comments  32 
ACKNOWLEDGMENTS  35 
   
 
   
BACKGROUND 
Objectives 
1.  To determine the extent to which the Medicare Drug Integrity 
Contractor (MEDIC) performed benefit integrity activities to 
identify, combat, and prevent fraud, waste, and abuse in 
Medicare Part C and Part D from fiscal years (FYs) 2012 to 2017. 
2.  To describe barriers the MEDIC encountered in performing its 
benefit integrity activities. 
3.  To determine how the Centers for Medicare & Medicaid Services 
(CMS) measures the MEDICs effectiveness. 
The MEDIC is CMSs benefit integrity contractor tasked with detecting and 
preventing fraud, waste, and abuse in Medicare Part C and Part D.  These 
programs involve billions of dollars in expenditures and cover millions of 
beneficiaries.  Therefore, effective and proactive oversight is essential to 
protect Medicare and its beneficiaries from fraud, waste, and abuse.  The 
Comprehensive Addiction and Recovery Act of 2016 (CARA) requires the 
Office of Inspector General (OIG) to conduct a study and submit a report, 
due July 2018 to Congress, on the effectiveness of the MEDICs efforts to 
identify, combat, and prevent Medicare fraud.1  OIG conducted this 
evaluation in response to the congressional mandate outlined in CARA.   
Medicare Part C and Part D 
Under Medicare Part C, CMS contracts with private insurance companies, 
known as Medicare Advantage organizations, to provide coverage of 
Medicare Part A and Part B services under managed care arrangements.2  
Under Medicare Part D, CMS contracts with private insurance companies 
called prescription drug plan sponsors to offer beneficiaries coverage for 
outpatient prescription drugs, including opioids.  Beneficiaries also can 
obtain prescription drug coverage through a Medicare Advantage 
prescription drug plan.  We use the term plan sponsor to refer to 
Medicare Advantage organizations and prescription drug plan sponsors. 
 
 
1 CARA established new authorities for plan sponsors and the MEDIC.  However, we were 
unable to review these new requirements because they will not be implemented until 
January 1, 2019. 
2 Medicare Parts A and B include hospital care; skilled nursing facility care; hospice care; 
home health care; physician services; and durable medical equipment, prosthetics, orthotics, 
and supplies. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  1 
OEI-03-17-00310   
MEDIC Responsibilities 
The MEDIC is responsible for detecting and preventing fraud, waste, and 
abuse in Medicare Part C and Part D.   
The MEDICs responsibilities are outlined in its statement of work and task 
orders.3, 4  These responsibilities include, but are not limited to:  
  conducting investigations,  
  referring cases to OIG and other law enforcement agencies for 
consideration of civil and criminal prosecution and/or application of 
administrative sanctions,  
  immediately advising OIG of certain types of allegations,  
  fulfilling requests for information from law enforcement agencies,  
  analyzing data to identify risks to Part C and Part D,  
  identifying high-risk pharmacies, providers, and beneficiaries in  
Part C and Part D, 
  identifying vulnerabilities in the Part C and Part D programs, 
  recommending administrative actions such as revocations and 
exclusions, and 
  receiving and processing complaints. 
The MEDIC is required to identify potential fraud and abuse through both 
external sources and proactive methods.  Examples of external sources of 
fraud leads include beneficiaries, law enforcement agencies, plan sponsors, 
and CMS.  Proactive methods include the analysis of claims data to identify 
fraud.  According to the MEDIC Statement of Work, the MEDIC is required to 
access data from a variety of sources, and its ability to apply innovative 
analytical methodologies is critical to the success of its benefit integrity 
activities.  Appendix A provides a detailed description of the MEDICs 
responsibilities. 
MEDICs New Responsibilities Under CARA.  CARA expands the MEDICs 
responsibilities to include assistance in the identification of beneficiaries at 
risk for drug abuse.5  CARA authorizes the MEDIC to directly accept 
prescription and necessary medical records from pharmacies, plan sponsors, 
and physicians to help determine whether the beneficiary in question is at 
risk for prescription drug abuse.  The MEDIC is required to acknowledge the 
receipt of referrals regarding at-risk beneficiaries from plan sponsors.  In 
addition, the MEDIC is required to respond within 15 days after being 
contacted by the plan sponsors for assistance in determining whether a 
 
3 MEDIC Statement of Work, September 2009, Revision #5. 
4 CMS, National Benefit Integrity (NBI) Medicare Drug Integrity Contractor (MEDIC) Task Order 
(TO), April 2017. 
5 P.L. No. 114-198,  704(c)(1).   
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OEI-03-17-00310   
beneficiary is at risk for prescription drug abuse.  The MEDICs new 
responsibilities begin in 2019.  In April 2018, CMS issued the final rule to 
implement the CARA requirements.6   
MEDIC Reporting Requirements 
CMS requires the MEDIC to submit several monthly and quarterly reports.  
These reports include a monthly Workload Statistic Report with information 
such as the number of investigations, immediate advisements, case referrals, 
requests for information, and number of data analyses.  The MEDIC also is 
required to submit to CMS a monthly Vulnerability Report, a quarterly 
Exclusions Report, a quarterly Revocation Report, and an annual Lessons 
Learned Report that outlines what worked particularly well during the 
performance period and recommends solutions for unanticipated problems. 
Prior OIG Work 
Past OIG work found that the MEDIC encountered problems with accessing 
and using data, which hindered its ability to investigate potential fraud and 
abuse.7  Specifically, the MEDIC lacked access to centralized Part C data and 
was prohibited from sharing specific information with other program 
integrity contractors.  The MEDIC also reported issues with accessing 
necessary prescription drug event (PDE) data, which hindered its ability to 
analyze claims data.  In addition, the MEDICs lack of authority to directly 
obtain information from pharmacies, pharmacy benefit managers, and 
physicians hindered its ability to investigate incidents of potential fraud and 
abuse.   
In response to our 2013 report, CMS implemented a number of changes to 
its procedures and regulations.  CMS provided the MEDIC with access to 
centralized Part C data.  CMS also provided guidance to the MEDIC on 
when it is appropriate to share information with other program integrity 
contractors.  Additionally, CMS established in Federal regulations that CMS 
or its designee (the MEDIC) has the right to collect information directly from 
pharmacy benefit managers, pharmacies, and other entities that contract or 
subcontract with plan sponsors.8   
In 2016, OIG issued a data compendium report on benefit integrity activities 
conducted by benefit integrity contractors, including the MEDIC, from 2012 
to 2013.9  OIG found variation in the level of benefit integrity activities 
conducted across contractors and across years, even when we accounted 
for differences in the size of contractors oversight responsibility and the 
amount paid for their contracts.    
 
6 83 Fed. Reg. 16440 (Apr. 16, 2018). 
7 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D, OEI-03-11-00310, 
January 2013. 
8 79 Fed. Reg. 29844 (May 23, 2014). 
9 OIG, Medicare Benefit Integrity Contractors Activities in 2012 and 2013: A Data Compendium, 
OEI-03-13-00620, May 2016. 
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To gauge the MEDICs financial effectiveness, we developed a return on 
Methodology 
investment measure.  We calculated this measure by dividing the amount of 
actual monetary recoveries reported by the MEDIC by the amount paid to 
the MEDIC.  The MEDIC began reporting actual recoveries to CMS in 
FY 2015.  Therefore, this return on investment analysis is calculated for 
FYs 2015 through 2017.  We also requested from CMS the measures it uses 
to gauge MEDIC effectiveness.  
The monetary recoveries represent actual monetary recoveries the MEDIC 
reported on the basis of three different activitiesdata analysis projects, 
self-audits, and case referrals.10  What is included in the reported recoveries 
differs depending on which activity generates the recovery.  For recoveries 
reported from data analysis projects and self-audits, the amounts represent 
recoveries to the Medicare program.  Also, the recovery data from 
self-audits was not reported by the MEDIC for 2015.11  For recoveries from 
case referrals, the amounts represent recoveries to all payers.  MEDIC staff 
stated that the reported actual recoveries from case referrals may include 
recoveries made to other entities such as Medicaid, in addition to Medicare.  
In other words, the MEDIC did not report recoveries in a way that we could 
capture Medicare-only recoveries.    
We analyzed MEDIC activities to better understand how these activities 
protect Part C and Part D.  To conduct this analysis, we collected Workload 
Statistic Reports and other reports from FY 2014 through FY 2017.  When 
possible, we trended activities from FY 2012 to FY 2017 (hereafter, when we 
refer to the years 2012 through 2017, we are referring to the FY) using data 
collected for a previous report for 2012 and 2013.12   
To assist in our evaluation, we collected information from the MEDIC.  We 
conducted an onsite interview with the MEDIC to gain a better 
understanding of its benefit integrity activities.  Finally, we analyzed 
information provided by the MEDIC detailing the barriers it sees to its ability 
to protect the Part C and Part D programs.   
Appendix B provides a more detailed methodology. 
Limitations 
The return on investment calculation includes only actual monetary 
recoveries that the MEDIC reported to us.  It does not include other results 
or benefits that the MEDIC may be providing.  While we reviewed the data 
 
10 After the MEDIC uncovers issues through its data analysis projects, it may employ desk 
audits to identify recoveries.  The MEDIC works with specific plan sponsors to assist them in 
conducting self-audits of selected PDE records identified by CMS and the MEDIC.   
11 According to CMS, the self-audit process was in its initiation phase in 2015.  
12 OIG, Medicare Benefit Integrity Contractors Activities in 2012 and 2013: A Data 
Compendium, OEI-03-13-00620, May 2016. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  4 
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provided by CMS and the MEDIC for inconsistencies, we did not 
independently validate the workload statistic and recovery data.   
While we provide information on the number of activities for 2012 and 2013 
in our findings, we are unable to provide information on what may have 
caused any changes in these numbers during this time period.  Data 
regarding MEDICs benefit integrity activities for 2012 and 2013 was 
collected for OIGs 2016 data compendium report.13  This report provided 
descriptive information on MEDIC workload activities and did not explore 
underlying policy and procedural changes that may have caused shifts in 
these activities.   
Standards  This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General on 
Integrity and Efficiency. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13 Ibid. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  5 
OEI-03-17-00310   
FINDINGS 
 
The MEDIC returned  The MEDIC consistently made a positive return on investment from 2015 
through 2017.14  In 2017, the MEDIC reported recoveries totaling $58 million.  
$3 for every $1 it 
During that same year, CMS paid $19 million to the MEDIC.  This resulted in 
was paid in 2017, 
the MEDIC returning $3 for every $1 it was paid in 2017.  The MEDICs 
but its return on  recoveries result from its data analysis projects, self-audits, and case 
investment declined  referrals and the level of these activities can vary from year to year.     
from 2016 to 2017  The MEDICs return on investment decreased in 2017 after increasing from 
2015 to 2016, as shown in Exhibit 1.15  In 2015, the first year the MEDIC 
 
submitted actual-recovery reports to CMS, the MEDIC returned $5 for every 
  $1 it was paid.  In 2016, the MEDIC returned $10 for every $1 it was paid.  The 
increase in 2016 was likely due to two data analysis projects that each 
produced recoveries of over $15 million, and one case referral that 
produced recoveries of nearly $21 million.  The MEDIC did not identify any 
Part C recoveries from data analysis projects and self-audits because it has 
yet to perform audits that would yield actual recoveries on Part C data.  
Exhibit 1: The MEDICs return on investment increased from  
2015 to 2016, but decreased sharply in 2017 
$10
$5
$3
2015 2016 2017
Recoveries related to data analysis projects per dollar paid to the MEDIC
Recoveries related to case referrals per dollar paid to the MEDIC
Recoveries related to self-audits per dollar paid to the MEDIC1
 
 
Source: OIG analysis of CMSs and the MEDIC's responses to OIG's request for information. 
1 Recovery data related to the MEDICs self-audit work was not reported for 2015. 
 
 
There are a number of factors that limit the MEDICs 
 
14 aThbe iMliEtDyIC  tboeg apnr roeptoerticngt  atchtueal  rMecoevedrieisc tao rCeM Sp inr o20g15r.  aThmere fore, OIG could not 
calculate the MEDICs return on investment for prior years. 
15 Recovery data related to the MEDICs self-audit work was not reported for 2015. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  6 
OEI-03-17-00310   
CMS has no  The MEDICs primary responsibility is to detect and prevent fraud, waste, 
and abuse by conducting benefit integrity activities.  When we asked CMS 
measures that 
how it measures the MEDICs effectiveness, CMS stated that it uses four 
specifically assess 
performance metrics to evaluate the MEDICs effectiveness, as shown in 
the MEDICs  Exhibit 2. 
effectiveness in 
However, these metrics do not measure how effective the MEDICs benefit 
identifying fraud        integrity activities are at detecting and preventing fraud, waste, and abuse.  
Instead, these metrics focus on the timeliness of the MEDICs work and its 
 
adherence to requirements described in the MEDIC Statement of Work and 
task order.  They do not provide insight into the effectiveness of the 
MEDICs efforts to detect and prevent fraud, waste, and abuse.  
Exhibit 2: CMS uses four metrics to evaluate the MEDICs 
effectiveness 
Metric  Standard  Acceptable 
Quality Level 
Quality of Data  Data projects and audits reports were  90% 
Projects/Audits  error free, i.e., no quality errors, 
Reports  grammatical errors, and/or spelling 
Submission  errors, and accepted by CMS  
Timeliness of  All complaints are acknowledged within  95% 
Complaints   5 business days after receipt of the 
complaintexcluding complaints 
received from CMS or law enforcement or 
complaints misdirected 
Timeliness of  Investigations were moved to all  85% 
Investigations  appropriate administrative action(s) (i.e., 
revocation and exclusion), law 
enforcement referral, or closure within 
180 calendar days 
Quality of  Investigations were moved to all  85% 
Medicare  appropriate administrative action(s) (i.e., 
Investigations   revocation and exclusion), law 
enforcement referral, or closure 
   
Source: OIG analysis of CMS response to OIG request for information. 
  
 
 
There are a number of factors that limit the MEDICs 
 
ability to protect the Medicare program 
 
 
 
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OEI-03-17-00310   
The MEDIC has  Although the number of new data analysis projects conducted by the 
MEDIC increased significantly from 2012 to 2017, the overall number of 
increased its 
MEDIC investigations, case referrals, and administrative actions decreased.  
proactive data 
Appendix C provides analyses of additional benefit integrity activities, not 
analyses, but the  addressed in this finding, that the MEDIC conducted from 2012 to 2017, 
number of  including immediate advisements, requests for information, and complaint 
activities. 
investigative results 
and administrative  The number of proactive data analysis projects has increased 
actions have  The number of proactive data analysis projects increased from 14 in 2012 to 
201 in 2017.  The 2014 NBI MEDIC Task Order to the Umbrella Statement of 
declined 
Work instructed the MEDIC 
Exhibit 3: The MEDIC started more 
  to increase the number of 
proactive data analysis projects each year 
senior and mid-level data 
 
from 2012 to 2017 
analysts with expertise in 
identifying fraud, waste, 
250
and abuse.  These analysts 
search for fraud trends 
200
within Part D data and  Implementation 
of MEDIC's 
examine information from 
150
PLATO system
complaints and news 
sources.  In addition, the 
100
MEDIC implemented the 
Predictive Learning Analytics  CMS shifts focus to 
50
proactive data analysis in 
Tracking Outcome (PLATO) 
MEDIC's statement of work 
system in April 2015.  PLATO 
0
includes a real-time  2012 2013 2014 2015 2016 2017
predictive-modeling fraud 
Source: OIG analysis of MEDIC workload statistics for 2012 
detection process.  As shown 
through 2017. 
in Exhibit 3, the number of   
proactive data analysis projects the MEDIC started has increased 
dramatically over the years.     
The number of new investigations the MEDIC started each year 
steadily declined from 2012 to 2017 
The number of investigations the MEDIC started decreased by nearly half 
from 2,069 in 2012 to 1,075 in 2014 and continued to decrease by over a 
third to 675 in 2017, as shown in Exhibit 4.   
According to both CMS and the MEDIC, the MEDIC started fewer new 
investigations after 2014 because of a change to the MEDICs statement of 
work, which shifted the MEDICs focus from investigations to increasing the 
proactive data analysis workload.16  The MEDIC staff reported that because 
of this increased focus on proactive data analysis, the MEDIC shifted 
 
16 Changes to the MEDICs statement of work are reflected in task orders issued to the 
MEDIC. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  8 
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resources toward data analysis projects and reduced its number of 
investigators.  
Exhibit 4: The MEDIC started fewer new investigations each year 
from 2012 to 2017 
 
2,500
 
2,000
 
  CMS shifts focus to proactive data 
1,500
analysis in MEDIC'sstatement of 
 
work
  1,000
 
500
    
  0
2012 2013 2014 2015 2016 2017
Source: OIG analysis of MEDIC workload statistics for 2012 through 2017.
 
The number of cases referred by the MEDIC fell significantly in 
2017 
The MEDIC referred considerably fewer cases to both OIG and other 
organizations in 2017 than in previous years.  After increasing from 2012 to 
2014, the number of cases referred to OIG decreased steadily from 196 in 
2014 to 88 in 2017, a decrease of more than half.  In contrast, the MEDICs 
case referrals to other organizations increased from 2014 through 2016 
before dropping drastically in 2017.   
The sharp decline in case referrals was the result of CMSs instruction to 
prioritize certain MEDIC activities.  The number of cases referred to all 
organizations decreased sharply from 482 cases in 2016 to 216 cases in 2017, 
as shown in Exhibit 5.  The MEDIC staff reported that the drastic decrease in 
case referrals to all organizations from 2016 to 2017 was because the 
MEDIC, at the direction of CMS, focused resources on determining whether 
previously referred cases could be closed.  In addition, the MEDIC staff 
reported that CMS instructed it to use its resources to identify monetary 
recoveries from case referrals.  Therefore, it could not focus on developing 
new case referrals.   
In addition, according to both the MEDIC and CMS, the decrease in case 
referrals to OIG was further impacted by CMSs instruction to focus on 
administrative actions beginning in 2015.  CMS stated that prior to 2014, the 
MEDICs focus was on investigations and referrals to OIG.  Since then, CMS 
has instructed the MEDIC to focus on data analysis projects and 
administrative actions.  Additionally, CMS stated that in 2016, it specifically 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  9 
OEI-03-17-00310   
instructed the MEDIC to fully develop an investigation prior to making a 
referral to OIG.   
Exhibit 5: Case referrals to all organizations and OIG decreased in 
2017  
500
CMSinstructs 
400
the MEDIC to 
focus on 
300 administrative 
actions 
200
100
Case referrals to all organizations Case referrals to OIG
0
2012 2013 2014 2015 2016 2017
Source: OIG analysis of MEDIC workload statistics for 2012through 2017.  
After an upward trend in administrative actions in recent years, 
there was a sharp decline in 2017 
CMS instructed the MEDIC to prioritize administrative actions in 2015.  From 
2015 to 2016, there was a marked increase in both the number of exclusions 
and revocations that the MEDIC recommended to CMS, as shown in 
Exhibit 6.  However, there was then a sharp decrease in these administrative 
actions in 2017.   
Exhibit 6: Although the number of revocations and exclusions       
that the MEDIC recommended to CMS increased in prior years,     
they decreased sharply from 2016 to 2017 
140
Revocations1
120
Exclusions1 
100
80
60
40
20
0
2014 2015 2016 2017  
  Source: OIG analysis of MEDIC workload statistics for 2012 through 2017. 
1 Prior to the fourth quarter of 2015, the MEDIC was not required to submit a Revocation 
  Report to CMS.  Prior to the first quarter of 2015, the MEDIC was not required to submit 
an Exclusions Report to CMS.  However, the MEDIC did report exclusions for the last two 
  quarters of 2014. 
 
 
 
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According to MEDIC staff, the decline in administrative actions in 2017 was 
the result of CMS guidance to discontinue scanning public information, 
including news articles focused on providers and State records containing 
license suspensions.  The MEDIC used these sources to identify providers to 
recommend to CMS for possible exclusion or revocation.  CMS reported 
that it instructed the MEDIC to discontinue scanning public information 
because another CMS contractor performs that work.  The MEDIC staff also 
reported that the decline in revocations was related to the implementation 
of stricter revocation criteria by CMS.  
 
The MEDIC  Given the extent of opioid abuse across the nation, the U.S. Department of 
Health and Human Services has prioritized addressing the opioid epidemic.  
identified thousands 
The MEDIC reported that it has consistently conducted benefit integrity 
of leads involving 
activities related to controlled substances that have the potential for abuse, 
drugs, but plan  including opioids and other Schedule II drugs.17  
sponsors actions in 
The MEDICs proactive data analysis has led to the 
response to these 
identification of thousands of high-risk entities 
leads is unknown 
The MEDIC uses various data analysis projects to identify high-risk 
pharmacies and providers that may facilitate the abuse or diversion of 
prescription drugs, including opioids.  This information can then be used by 
the MEDIC to open investigations on these entities.  The high-risk leads 
identified by the MEDIC are also 
Exhibit 7: The MEDIC identified more 
provided to plan sponsors and 
than a thousand high-risk pharmacies 
shared in PLATO.  The MEDIC 
in each year from 2015 through 2017 
identified 7,302 high-risk 
pharmacies and 10,737 high-risk 
3,000
providers from 2014 through 
2017.   
Pharmacies.  The MEDIC 
2,000
identified more than 
1,600 high-risk pharmacies in 
each year from 2015 through 
2017, as shown in Exhibit 7.   
1,000
The MEDIC conducts multiple 
analyses to identify these 
high-risk pharmacies.  One of 
these is the Pharmacy Risk  0
Assessment, which scores  2014 2015 2016 2017
pharmacies on 16 metrics to 
Source: OIG analysis of the MEDIC responses to OIG 
determine if they are high,  request for information. 
 
17 The Drug Enforcement Agency (DEA) classifies drugs into five categories called schedules 
on the basis of the drugs acceptable medical use and abuse or dependency potential.  
Schedule II drugs are defined as drugs with a high potential for abuse, with use potentially 
leading to severe psychological or physical dependence.   
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  11 
OEI-03-17-00310   
medium, or low risk.  The metrics on which pharmacies are scored include 
the total amount paid, the average number of prescriptions per prescriber 
identification number, and the percentage of prescriptions that were for 
Schedule II drugs.   
In addition, the MEDIC employs the quarterly Pharmacy Spike Analysis to 
identify pharmacies with more than 100 percent increases in payment 
amounts from one quarter to the next.  These pharmacies are targeted for 
investigation involving opioid abuse.   
Providers.  The MEDIC also 
Exhibit 8: The number of high-risk 
conducts projects to identify 
providers the MEDIC identified 
high-risk providers.  For example, 
more than tripled from 2014 
in 2016, CMS instructed the 
through 2017  
MEDIC to conduct a data analysis 
 
5,000 project to identify prescribers of 
Schedule II drugs with irregular 
4,000 billing patterns compared to their 
peers.  In response, the MEDIC 
developed its Outlier Prescribers 
3,000
of Schedule II Controlled 
Substances project to score 
2,000
providers that prescribe 
Schedule II drugs as high, 
1,000
medium, or low risk.  As shown in 
Exhibit 8, the number of high-risk 
0 providers identified by the 
2014 2015 2016 2017
MEDIC more than tripled from 
Source: OIG analysis of the MEDIC responses to  1,281 providers in 2014 to 3,903 in 
 
OIG request for information.
2017.   
In addition to the Outlier Prescribers project, in 2017 CMS instructed the 
MEDIC to complete an opioid-focused Schedule II drugs data analysis 
project.  In response, the MEDIC developed the Opioid Analgesic Schedule II 
Controlled Substances project to specifically score providers that prescribe 
Schedule II opioids.   
The MEDIC has conducted additional opioid-related projects.  The TRIO 
model in PLATO identifies prescribers with a high risk of facilitating 
beneficiary drug abuse by prescribing a combination of carisoprodol and 
alprazolam, with either hydrocodone or oxycodoneone of the most 
widely abused combinations of drugs.  Another example of the MEDICs 
opioid-related work is a project that identifies prescribers who may be 
culpable in the overdose death of a beneficiary by comparing the date of 
death with the date of opioid prescriptions.  
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  12 
OEI-03-17-00310   
As with pharmacies, the MEDIC conducts a quarterly Prescriber Spike 
Analysis, which identifies prescribers who meet a dollar threshold in one of 
four categories of drugs, including Schedule II drugs.  The Prescriber Spike 
Analysis reviews various databases for additional criteria and identifies 
outlier prescribers for further review and possible investigation. 
The MEDICs investigative results involving opioids declined 
from 2014 to 2017    
Despite an increase in opioid-related data analysis projects, the MEDIC 
started fewer investigations and referred fewer cases related to opioids from 
2014 to 2017.  As shown in Exhibit 9, from 2014 to 2017, the MEDIC initiated 
more data analysis projects related to opioids, but the number of 
opioid-related investigations the MEDIC conducted decreased.  The number 
of opioid-related case referrals increased from 2014 through 2016 before 
dropping sharply in 2017.    
Exhibit 9:  While the MEDIC started more proactive data analysis 
projects related to opioids from 2014 to 2017, it started fewer 
investigations and referred fewer cases related to opioids 
  Opioid-related proactive  Opioid-related  Opioid-related case 
data analysis projects  investigations started  referrals to all organizations 
 
 
  120
     
100
     
80
     
60
40      
20      
0
     
2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017
So urce: OIG analysis of MEDIC responses to OIG request for information. 
The outcome of the MEDICs leads to plan sponsors is unknown 
because sponsors are not required to report the actions taken 
in response to these leads 
According to the 2017 NBI MEDIC Task Order, PLATO shall house the results 
of actions taken by all plan sponsors on pharmacies and providers.  
However, the task order for the MEDIC cannot create requirements for plan 
sponsors to share information on their responses to leads from the MEDIC, 
and CMS has not separately required the plan sponsors to do so.   
Should plan sponsors voluntarily choose to use PLATO, they can share 
information on the results of their reviews of high-risk pharmacies and 
providers.  Plan sponsors can enter in PLATO actions taken against 
providers and pharmacies, identify providers and pharmacies within their 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  13 
OEI-03-17-00310   
networks as Suspect or Non-Suspect, and track in PLATO the progress of 
any investigations they are undertaking.   
Because only 60 percent of plan sponsor organizations have requested 
access to PLATO, complete information on how plan sponsors respond to 
the MEDICs leads is not available.  Additionally, we do not know whether 
plan sponsors with access to PLATO are entering all relevant information.  In 
previous reports, OIG has recommended to CMS that plan sponsors be 
required to report (1) all potential fraud and abuse to CMS and/or the 
MEDIC and (2) data on the inquiries and corrective actions they take in 
response to incidents of fraud and abuse.18  Again, because plan sponsors 
participation in PLATO is voluntary, there is no comprehensive information 
on plan sponsors actions in response to fraud, waste, and abuse.  Hence, 
there is no way to make a judgment on the overall impact of the MEDICs 
workparticularly as it relates to the leads the MEDIC produced as a result 
of CMSs instruction to focus on proactive data analysis. 
  
The MEDIC described barriers similar to those cited in past OIG work.19  
The MEDIC 
Once again, the MEDIC identified issues regarding access to all centralized 
identified a number 
Part C encounter data and obtaining information from providers, 
of factors that limit  pharmacies, and pharmacy benefit managers.  While CMS has made efforts 
to address these issues in response to previous OIG recommendations, the 
its ability to protect 
MEDIC reports that these barriers and others continue to hinder its benefit 
the Medicare 
integrity efforts.   
program  
Restricted access to Part C encounter data limits the MEDICs benefit 
integrity activities in Medicare Part C 
Although the MEDIC has access to some variables in the Part C encounter 
data, such as procedure codes, it is restricted from accessing others that 
may be important to its benefit integrity activities, such as number of 
services rendered.  Encounter data are records of items and services 
provided to beneficiaries enrolled in Part C and are accessed through CMSs 
Integrated Data Repository (IDR).  Because it is unable to access certain 
variables in the IDR, the MEDIC must request information from individual 
plan sponsors to obtain the number of services and the dollar amount billed 
for an encounter record.  Having access to the number of services would 
enable the MEDIC to conduct more robust data analysis of Part C services to 
 
18 OIG, Ensuring the Integrity of Medicare Part D, OEI-03-15-00180, June 2015;  Less than Half 
of Part D Sponsors Voluntarily Reported Data on Potential Fraud and Abuse, OEI-03-13-00030, 
March 2014;  Retail Pharmacies With Questionable Part D Billing, OEI-02-09-00600, May 2012; 
Medicare Advantage Organizations Identification of Potential Fraud and Abuse, 
OEI-03-10-00310, February 2012;  Medicare Drug Integrity Contractors Identification of 
Potential Part D Fraud and Abuse, OEI-03-08-00420, October 2009; and Medicare Drug Plan 
Sponsors Identification of Potential Fraud and Abuse, OEI-03-07-00380, October 2008. 
19 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D, OEI-03-11-00310, 
January 2013 and Medicare Drug Integrity Contractors' Identification of Potential Part D Fraud 
and Abuse, OEI-03-08-00420, October 2009. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  14 
OEI-03-17-00310   
identify questionable billing patterns.  Having access to the dollar amount 
billed would enable the MEDIC to quantify the financial risk to the Medicare 
program when sending case referrals to law enforcement agencies.  MEDIC 
staff reported that they requested these variables from CMS, but the MEDIC 
has not been provided access to them.      
The MEDIC also raised concerns about both the completeness and accuracy 
of encounter data in the IDR extracts for Part C.  For instance, the MEDIC 
reported that its IDR extracts for Part C data only provide up to three 
diagnosis codes even though more diagnosis codes associated with a 
patient are in the IDR.  The MEDIC is authorized by CMS to use Part C 
diagnosis codes data to validate the appropriateness of Part D prescriptions.  
Expanding the number of diagnosis codes in the IDR extracts for Part C data 
would improve the MEDICs ability to determine whether drugs were 
dispensed for reasons not approved by the Food and Drug Administration 
(FDA).  In addition, the MEDIC identified discrepancies between information 
provided by plan sponsors and the data included in the IDR.  These 
discrepancies included missing tax identification numbers, invalid National 
Provider Identifiers, and claims that were missing entirely. 
The MEDICs restricted access to Part C data has resulted in fewer activities 
addressing fraud in Part C.  A small percentage of the MEDICs benefit 
integrity activities were related to only Part C from 2015 through 2017.  
Six percent of the 466 referrals made in 2015 and 8 percent of the 
482 referrals made in 2016 were related to Part C only, as shown in  
Exhibit 10.     
Exhibit 10: In 2015 and 2016 the MEDICs case referrals related to 
Part C were nominal compared to case referrals related to Part D 
100%
75%
Part D
50%
Parts C and D combined
Part C
25%
0%
2015 2016
Source: OIG analysis of MEDIC workload statistics for 2015 and 2016.  
CMS did not require case referral numbers to be separated by Part C and 
Part D in 2017.  However, CMS did require investigation numbers to be 
broken out by Part C and Part D in 2017.  Nineteen percent of the 675 new 
investigations started in 2017 were related to Part C only.  MEDIC staff also 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  15 
OEI-03-17-00310   
reported currently having approval for only a few data analysis projects 
using Part C encounter data.  MEDIC staff reported that one project is not as 
robust as it could be because of the MEDICs limited Part C data access.  
MEDIC staff also reported that the MEDIC has yet to enter Part C data into 
PLATO.   
Lack of a Part C and Part D enrollment requirement limits the 
actions the MEDIC can pursue  
Without a Part C and Part D enrollment requirement, the MEDIC is limited in 
its ability to pursue administrative actions against non-enrolled providers 
and pharmacies.  This is because CMS can only revoke providers and 
pharmacies if they are enrolled in Medicare.  Because Part C and Part D 
providers and pharmacies are not required to be enrolled in Medicare, the 
MEDIC reported that opening investigations on them is ineffective as it 
cannot recommend them for administrative action.  Of the 279 outlier 
pharmacies identified in the last quarter of 2013 through the Pharmacy 
Spike Analysis, 70 percent were not enrolled in Medicare.20    
Lack of authority to compel pharmacies, providers, and 
pharmacy benefit managers to provide requested medical 
records impedes the MEDICs work 
According to the MEDIC, it does not have the authority to require 
pharmacies, providers, and pharmacy benefit managers to provide medical 
records requested by the MEDIC.  According to MEDIC staff, although the 
vast majority of entities respond to its requests, it has no recourse against 
those that fail to do so.   
As previously stated, CMS established in Federal regulations that CMS or its 
designee (the MEDIC) has the right to collect information directly from 
pharmacy benefit managers, pharmacies, and other entities that contract or 
subcontract with Part C and Part D sponsors.21  These regulations were 
released after OIG recommended that the MEDIC be given the authority to 
directly obtain information that it needs from pharmacies, pharmacy benefit 
managers, and physicians.22  When we asked CMS to clarify the MEDICs 
authority, CMS stated that pharmacies, pharmacy benefit managers, and 
other entities that are under contract with Part C and Part D plan sponsors 
are required to submit documentation, such as medical records, in response 
to the MEDICs request for documentation.  This includes providers under 
contract with Part C plan sponsors.  However, providers who prescribe 
prescription drugs covered under Part D are not under contract with Part D 
 
20 In order to bill Medicare, pharmacies that are suppliers of Part B durable medical 
equipment, prosthetics, orthotics, and supplies would need to enroll in Medicare. 
21 79 Fed. Reg. 29844 (May 23, 2014). 
22 OIG, Medicare Drug Integrity Contractors' Identification of Potential Part D Fraud and Abuse, 
OEI-03-08-00420, October 2009 and MEDIC Benefit Integrity Activities in Medicare Parts C 
and D, OEI-03-11-00310, January 2013. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  16 
OEI-03-17-00310   
plan sponsors.  Therefore, these providers are not required to submit 
medical records requested by the MEDIC.    
  
   
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  17 
OEI-03-17-00310   
CONCLUSION AND RECOMMENDATIONS 
In response to a mandate from Congress, OIG evaluated the MEDICs efforts 
to identify, combat, and prevent fraud in Medicare Part C and Part D.  While 
the MEDICs reported recoveries resulted in a positive return on investment 
($3 in recoveries for every $1 invested in 2017), CMS has no measures that 
specifically assess the MEDICs effectiveness.  Without specific measures, it is 
unclear how CMS assesses the MEDICs effectiveness in fighting fraud.    
CMS directed the MEDIC to devote more resources to proactive data 
analysis and administrative actions in 2014 and 2015, which led to a sharp 
increase in proactive data analysis, but a decrease in the MEDIC resources 
available to follow up on the results of these analyses.  As a result, there 
have been fewer MEDIC investigations and referrals to law enforcement 
agencies, including OIG.  The direction did lead to an initial upswing in 
administrative actions (revocations and exclusions); however, those declined 
precipitously in 2017 due to other procedural changes.   
Through its increased proactive analyses, the MEDIC was able to identify 
thousands of high-risk leads involving drugs, including opioids.  The impact 
of these activities, however, cannot be measured as plan sponsors are not 
required to report to CMS the actions taken in response to these leads.  To 
address this issue, OIG has consistently recommended that CMS require 
plan sponsors to report information on fraud and abuse.    
In addition, MEDIC staff described numerous barriers that limit the MEDICs 
overall impact.  These barriers include the MEDICs lack of access to 
complete Part C encounter data; its inability to recommend certain 
administrative actions, such as revocation of billing privileges, against Part C 
and Part D providers and pharmacies not enrolled in Medicare; and its 
inability to obtain all requested medical records from pharmacies, providers, 
and pharmacy benefit managers.  Prior OIG reports have identified some of 
these barriers and although CMS has made efforts to remove these barriers 
by addressing OIG recommendations, some still exist. 
To improve the MEDICs overall effectiveness, CMS should: 
Require plan sponsors to report Part C and Part D fraud and 
abuse incidents and the corrective actions taken to address 
them to a centralized system  
Requiring plan sponsors to use PLATO or some other centralized system to 
report suspect providers and pharmacies, investigative information, and 
corrective actions would provide the MEDIC and plan sponsors with 
valuable information to use in their fraud-fighting efforts.  It would also 
enhance CMS oversight by providing transparency into the plan sponsors 
efforts to protect the program from fraud, waste, and abuse.  OIG has 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  18 
OEI-03-17-00310   
recommended CMS take this action in multiple reports over numerous 
years.  
Currently, plan sponsors voluntarily report in PLATO their identification of 
suspect pharmacies and providers and any actions they have taken against 
them.  Only 60 percent of plan sponsor organizations have requested 
access to PLATO.  Therefore, PLATO is not capturing comprehensive 
information on potential fraud, waste, and abuse within Medicare Part C 
and Part D. 
Provide the MEDIC centralized access to all Part C encounter 
data 
Access to unrestricted centralized Part C data would enable the MEDIC to 
more effectively and proactively identify potential fraud, waste, and abuse in 
the Part C program.  The MEDICs access to limited Part C encounter data in 
the IDR prevents it from determining the billed amount associated with the 
encounter services and the number of services rendered during the 
encounter.  According to the MEDIC, this limits its ability to utilize Part C 
data in conducting its benefit integrity activities.  OIG identified the lack of 
access to centralized Part C data as a concern in previous work on the 
MEDIC.23  As a result, CMS provided the MEDIC with access to centralized 
Part C data in the IDR.  However, the MEDIC still does not have access to all 
the variables it needs to efficiently carry out its activities.  In addition, the 
MEDIC raised concerns about the quality of some data in the IDR.  An OIG 
report issued in January 2018 also found issues with the accuracy and 
completeness of some Part C data and recommended that CMS take 
actions to address these issues.24 
Require that Part C and Part D providers and pharmacies enroll 
in Medicare 
A lack of an enrollment requirement for providers and pharmacies that 
serve Part C and Part D beneficiaries creates a vulnerability to Medicare 
because there is no mechanism for CMS or the MEDIC to provide effective 
oversight of these entities.  Requiring providers and pharmacies to enroll in 
Medicare would help ensure that only qualified entities are providing 
services to Part C and Part D beneficiaries.  Such an enrollment requirement 
also would help ensure that CMS could identify all providers and 
pharmacies who deliver care to Medicare beneficiaries.  Lastly, an 
enrollment requirement would provide CMS with an opportunity to take 
 
23 OIG, MEDIC Benefit Integrity Activities in Medicare Parts C and D, OEI-03-11-00310, 
January 2013. 
24 OIG, Medicare Advantage Encounter Data Show Promise for Program Oversight, But 
Improvements Are Needed, OEI-03-15-00060, January 2018. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  19 
OEI-03-17-00310   
additional administrative action, such as revoking the enrollment of 
problematic providers and pharmacies.   
From 2014 through 2016, CMS released final regulations requiring that 
(1) providers enroll in or validly opt-out of Medicare in order for a drug 
prescribed by the provider to be covered under Part D and (2) providers 
and suppliers be enrolled in Medicare before they provide services covered 
under Part C.25  However, the compliance date for these regulations was 
extended to January 1, 2019.  In April 2018, CMS issued a final rule that 
requires plan sponsors to deny payments provided by individuals and 
entities on a preclusion list, rather than requiring the enrollment of 
providers.  The preclusion list will include individuals or entities that (1) are 
revoked from Medicare, under a reenrollment bar, and the conduct that led 
to the revocation is detrimental to the best interests of Medicare or (2) have 
engaged in behavior for which they could have been revoked had they 
been enrolled in Medicare and the conduct that would have led to the 
revocation is detrimental to the best interests of Medicare.26  However, OIG 
believes that enrollment is a more robust program integrity tool than the 
preclusion list alone.27 
Clarify the MEDICs authority to require records from 
pharmacies, pharmacy benefit managers, and other entities 
under contract with Part C and Part D plan sponsors  
Access to this information would allow the MEDIC to conduct more 
thorough investigations and make more robust referrals.  CMS should clarify 
for the MEDIC that it has the authority to require the submission of records 
from pharmacies, pharmacy benefit managers, and other entities that are 
under contract with Part C and Part D plan sponsors.   
Ensure that the MEDIC has the ability to require medical 
records from prescribers of Part D drugs not under contract 
with plan sponsors, obtaining legislative authority, if necessary  
Providing the MEDIC with the ability to obtain non-contracted providers 
medical records would help the MEDIC conduct more thorough 
investigations and make more robust Part D referrals, including those 
related to opioids.  CMS should ensure that the MEDIC has the ability to 
require the submission of medical records from prescribers of prescription 
drugs covered under Part D, i.e., from physicians, eligible professionals, and 
other authorized prescribers, obtaining legislative authority, if necessary.  
 
25 79 Fed. Reg. 29844 (May 23, 2014), 80 Fed. Reg. 25958 (May 6, 2015) and 81 Fed. Reg. 
80170 (Nov. 15, 2016). 
26 83 Fed. Reg. 16440 (Apr. 16, 2018).   
27 OIG made a similar recommendation regarding the enrollment of all providers 
participating in Medicaid managed care (OIG, Providers Terminated From One State Medicaid 
Program Continued Participating in Other States, OEI-06-12-00030, August 2015).  In May 
2016, CMS published final regulations requiring State Medicaid programs to enroll all 
providers participating in Medicaid managed care (81 Fed. Reg. 27497, May 6, 2016).  
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  20 
OEI-03-17-00310   
Currently, the MEDIC has the authority to obtain medical records from 
entities that are under contract with plan sponsors.  However, because 
prescribers under Part D do not contract with Part D plan sponsors, the 
MEDIC is unable to directly obtain medical records from these providers.         
To improve the measurement of the MEDICs effectiveness, CMS 
should: 
Establish measures to assess the MEDICs effectiveness 
Metrics that measure the MEDICs effectiveness would allow CMS to 
determine whether the MEDIC is fulfilling its role in protecting Part C and 
Part D.  CMSs current metrics evaluate the MEDICs adherence to policies 
and procedures, rather than its effectiveness in identifying and combating 
fraud, waste, and abuse.   
   
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  21 
OEI-03-17-00310   
AGENCY COMMENTS AND OIG RESPONSE 
CMS concurred with four of the six recommendations. 
CMS concurred with our recommendation to require plan sponsors to 
report Part C and Part D fraud and abuse incidents and corrective actions to 
a centralized system.  CMS stated that it will work with plan sponsors to 
implement reporting requirements. 
CMS concurred with our recommendation to provide the MEDIC with 
centralized access to all Part C encounter data.  CMS stated that it provided 
the MEDIC with access to centralized Part C encounter data and is 
continuing to work with the MEDIC to provide access to all Part C encounter 
data fields. 
CMS concurred with our recommendation to clarify the MEDIC's authority 
to require records from pharmacies, pharmacy benefit managers, and other 
entities under contract with Part C and Part D plan sponsors. 
CMS concurred with our recommendation to establish measures to assess 
the MEDIC's effectiveness.  CMS stated that when the current MEDIC 
contract ends it will revise metrics and develop a Quality Assurance 
Surveillance Plan to better measure the MEDIC's effectiveness of its benefit 
integrity activities for the next MEDIC contract. 
CMS did not concur with our recommendation that Part C and Part D 
providers and pharmacies enroll in Medicare.  CMS noted that it recently 
established a preclusion list in Part C and Part D and prohibits payments to 
prescribers or providers on this list.  The list includes certain individuals and 
entities revoked from Medicare or those who have engaged in behavior for 
which CMS could have revoked the individual or entity if they had been 
enrolled in Medicare.  CMS believes that the preclusion list is less 
burdensome to prescribers and providers than enrollment.  OIG 
understands that provider burden needs to be carefully weighed when 
considering how best to protect Medicare.  In this instance, OIG believes 
that requiring enrollment in Medicare would help ensure that only reputable 
and qualified individuals and entities are providing services to Part C and 
Part D beneficiaries.  Therefore, OIG continues to recommend that Part C 
and Part D providers and pharmacies enroll in Medicare.   
CMS did not directly concur nor nonconcur with our recommendation to 
ensure that the MEDIC has the ability to require medical records from 
prescribers of Part D drugs not under contract with plan sponsors.  Instead, 
CMS stated that it would take the recommendation into consideration as it 
continues to evaluate and work to strengthen program integrity in Part C 
and Part D.  We ask that CMS clarify its concurrence status in its final 
management decision.  The full text of CMSs comments is provided in 
Appendix D. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  22 
OEI-03-17-00310   
APPENDIX A: MEDIC Responsibilities 
This appendix provides information on the MEDIC responsibilities outlined 
in its statement of work from CMS. 
Conducting Investigations.  The MEDIC is required to conduct 
investigations when it receives allegations of fraud from external sources or 
proactively identifies potential fraud.  A MEDIC investigation is performed to 
determine the facts and the magnitude of potential fraud and may include a 
review of claims, beneficiary medical records, prescriptions, or cost reports;  
and conducting interviews.  A MEDIC investigation is intended to gather 
enough information to make a referral to law enforcement or recommend 
to CMS an administrative action.  
Referring Cases to Law Enforcement and Making Immediate Advisements. 
According to the MEDIC Statement of Work, a case exists when the MEDIC 
has substantiated a fraud allegation through an investigation and made a 
referral to law enforcement.  The MEDIC identifies cases of suspected fraud 
and makes referrals of all such cases to OIG, regardless of dollar amounts or 
subject matter.  If a case has been referred to OIG, it has 60 calendar days 
to accept the referral, refer the case to the Department of Justice (DOJ), or 
reject the case.  If there is no response from OIG within 60 calendar days 
following the referral, the MEDIC can refer the case to the Federal Bureau of 
Investigation (FBI) and/or any other investigative agency with interest in the 
case.  The MEDIC closes a case once all appropriate administrative actions 
have been considered or implemented by CMS and law enforcement have 
declined the case, if the case was referred. 
Certain allegations are referred directly to OIG without a MEDIC 
investigation.  These are called immediate advisements and include 
complaints by current or former employees of a suspected provider or plan 
sponsors and/or their subcontractors.   
Fulfilling Requests for Information.  The MEDIC receives requests for 
information from OIG and DOJ as well as other entities including plan 
sponsors, Medicaid Fraud Control Units, and State Attorneys General.  CMS 
requires the MEDIC to respond to requests from OIG and DOJ within 30 
days or 45 days, depending on priority level. 
Analyzing Data.  According to the MEDIC Statement of Work, the MEDIC 
should use research and experience in the field to develop new approaches 
and data analysis techniques to identify risks to Medicare Part C and Part D.  
Analyses of data should identify areas vulnerable to fraud, waste, and abuse 
and identify potential incidents of fraud, waste, and abuse.   
The MEDIC is required to use the PLATO modeling system to identify fraud, 
waste, and abuse patterns.  PLATO incorporates a real-time 
predictive-modeling fraud detection process.  According to the NBI MEDIC 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  23 
OEI-03-17-00310   
Task Order, PLATO shall house the results of the MEDICs proactive analyses 
to more effectively identify providers involved in fraud schemes as well as 
actions taken by all plan sponsors on pharmacies and prescribers.  PLATO 
also enables the MEDIC to share results and outcomes of analyses with plan 
sponsors and law enforcement agencies.28 
Identifying High-Risk Entities.  The MEDIC, in collaboration with CMS, 
develops numerous, proactive data analysis projects to identify  
high-risk entities.  These projects focus on identifying trends, anomalies, and 
questionable physician and pharmacy practices.  Examples of these projects 
include the Quarterly Pharmacy Risk Assessmentwhich categorizes 
pharmacies as high, medium, or low risksand the Prescriber Risk 
Assessment, which provides a peer comparison of controlled substance 
prescribing practices.  The results of these projects are provided to plan 
sponsors so that actions can be taken. 29 
Identifying Vulnerabilities.  The MEDIC is required to submit a monthly 
Vulnerability Report, identifying any vulnerabilities it finds and addressing, 
to the extent possible, the scope of the vulnerability and the extent to which 
the vulnerability jeopardizes Medicare Part C and Part D.  The MEDIC also 
may propose solutions to CMS as to the most effective and efficient ways to 
address the vulnerability. 
Recommending Administrative Actions.  The MEDIC may recommend two 
types of administrative actions to CMSrevocations and exclusions.  A 
providers Medicare enrollment may be revoked for a number of reasons, 
including noncompliance with enrollment requirements and abusive 
prescribing patterns.30  The MEDIC is required to identify providers for 
revocation through data analysis, case referrals, and other means.  Once a 
provider has been identified, the MEDIC prepares a referral for revocation 
and submits it to CMS.   
Additionally, the MEDIC must refer providers for exclusion from Federal 
health care programs to OIG (through CMS) when a providers license has 
been revoked for reasons related to the providers professional 
competence, professional performance, or financial integrity.  The MEDIC 
must provide documentation to support a recommendation for exclusion.31  
The MEDIC also must prepare a separate revocation package to provide to 
CMS when a provider identified for exclusion also meets the criteria for 
revocation. 
 
28 CMS, National Benefit Integrity (NBI) Medicare Drug Integrity Contractor (MEDIC) Task 
Order (TO), April 2017. 
29 CMS, CMS Opioid Misuse Strategy 2016, January 5, 2017.  Accessed at https://www.cms.gov 
on April 30, 2018. 
30 Under 42 CFR 424.535(a), there are 14 reasons for revocation of a providers Medicare 
enrollment.   
31 Supporting documentation includes, but is not limited to, a summary of the case, provider 
license report, consent order, enforcement order, judgment, and indictment. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  24 
OEI-03-17-00310   
Receiving and Processing Complaints.  The MEDIC may receive potential 
complaints from a variety of sources, including beneficiaries.  If the MEDIC 
receives an actionable complaint, it must further investigate the complaint, 
resolve the complaint investigation, or make referrals as needed to CMS, 
appropriate law enforcement agencies, or other outside entities.  If the 
MEDIC receives any complaints (or inquires) that it is not responsible for 
handling, the MEDIC refers the complainant to the plan sponsor, the          
1-800-MEDICARE phone number, or the CMS Regional Office, as 
appropriate.   
 
 
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OEI-03-17-00310   
APPENDIX B: Detailed Methodology  
This appendix provides more detailed information on our data collection 
and analyses.   
Measures of MEDIC effectiveness  
We requested, received, and reviewed information from CMS regarding the 
measures and data it uses to determine the MEDICs effectiveness.   
To gauge the MEDICs financial effectiveness, we developed a return on 
investment measure.  We calculated this measure by dividing the amount of 
actual monetary recoveries reported by the MEDIC by the amount paid to 
the MEDIC.  The MEDIC began reporting actual recoveries to CMS in 2015.  
Therefore, this return on investment analysis is calculated for the years 2015 
through 2017.  We also requested from CMS the measures it uses to gauge 
MEDIC effectiveness.  
The monetary recoveries represent actual monetary recoveries the MEDIC 
reported on the basis of three different activitiesdata analysis projects, 
self-audits, and case referrals.32  What is included in the reported recoveries 
differs depending on which activity generates the recovery.  For recoveries 
reported from data analysis projects and self-audits, the amounts represent 
recoveries to the Medicare program.  Also, the recovery data from 
self-audits was not reported by the MEDIC for 2015.33  For recoveries from 
case referrals, the amounts represent recoveries to all payers.  MEDIC staff 
stated that the reported actual recoveries from case referrals may include 
recoveries made to other entities such as Medicaid, in addition to Medicare.  
In other words, the MEDIC did not report recoveries in a way that we could 
capture Medicare-only recoveries.    
Benefit integrity activities   
From CMS, we requested Workload Statistic Reports related to the MEDICs 
Part C and Part D benefit integrity activities from 2014 through 2017.  These 
data included the number of (1) investigations started, (2) cases referred, 
(3) immediate advisements made, (4) requests for information received and 
completed, (5) data analyses projects started and, (6) complaints received 
and processed.  For this timeframe, we also requested the monthly 
Vulnerability Reports, quarterly Exclusions Reports, quarterly Revocation 
Reports, and annual Lessons Learned Reports. 
To provide a comparison to work performed by the MEDIC in previous 
years, we also used workload statistics collected during prior OIG work to 
 
32 After the MEDIC uncovers issues through its data analysis projects, it may employ desk 
audits to identify recoveries.  The MEDIC works with specific plan sponsors to assist them in 
conducting self-audits of selected PDE records identified by CMS and the MEDIC.   
33 According to CMS, the self-audit process was in its initiation phase in 2015.  
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  26 
OEI-03-17-00310   
determine the MEDICs benefit integrity activities conducted during 2012 
and 2013.34      
We reviewed the MEDIC workload statistics received from CMS and 
summarized select benefit integrity activities performed each year from 
2014 through 2017.  We compared the following workload statistics from 
year to year and also compared them to statistics previously collected by 
OIG for 2012 and 2013: proactive data analysis projects started, new 
investigations started, cases referred, immediate advisements, requests for 
information, and complaints received.  When possible, we completed these 
analyses separately for Part C and Part D data.   
We reviewed the quarterly Exclusions Reports and Revocation Reports to 
determine the number of exclusions and revocations the MEDIC 
recommended to CMS from 2014 to 2017.  Because CMS did not require 
these reports prior to 2014, we could not include an analysis of 2012 and 
2013 data.  Prior to the fourth quarter of 2015, the MEDIC was not required 
to submit Revocation Reports.  Prior to the first quarter of 2015, it was not 
required to submit Exclusions Reports; however, the MEDIC submitted 
Exclusions Reports for the last two quarters of 2014.   
Activities related to opioids and high-risk entities  
We requested the following information from the MEDIC: 
  the number of high-risk pharmacies and high-risk providers that the 
MEDIC identified each year from 2014 through 2017, and  
  information on the steps it has taken to detect and prevent fraud, 
waste, and abuse related to opioid misuse.  
From OIGs request for MEDIC information, we determined what steps the 
MEDIC has taken to detect and prevent fraud, waste, and abuse related to 
opioid misuse.  Specifically, we summarized the number of new 
investigations started, case referrals, and data analysis projects related to 
opioids.   
From OIGs request for MEDIC information, we determined what measures 
the MEDIC has developed to help identify high-risk pharmacies and 
high-risk providers.  We summarized the number of high-risk pharmacies 
and high-risk providers that the MEDIC identified for 2014 through 2017.  
Information on the MEDICs opioid and high-risk activities for 2012 and 2013 
was not included in this review because the data were not collected during 
the previous OIG work. 
Barriers and challenges  
We determined current barriers and challenges from the MEDICs written 
responses and our interview with MEDIC staff.  Once we determined the 
 
34 OIG, Medicare Benefit Integrity Contractors Activities in 2012 and 2013: A Data 
Compendium, OEI-03-13-00620, May 2016. 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  27 
OEI-03-17-00310   
barriers and challenges, we also reviewed the Lessons Learned and 
Vulnerability reports to ascertain whether they contained additional 
information about these barriers and challenges.   
 
 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  28 
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APPENDIX C: Analysis of Additional Benefit 
Integrity Activities Conducted by the MEDIC 
This appendix provides analyses of additional benefit integrity activities the 
MEDIC conducted from 2012 to 2017, including immediate advisements, 
requests for information, and complaints.   
The MEDIC made fewer immediate advisements after CMS 
changed the immediate advisement criteria 
As shown in Exhibit 11, the MEDIC made fewer immediate advisements from 
2012 to 2017.  The number of immediate advisements decreased each year 
from 2012 through 2015.  The MEDIC made 207 immediate advisements in 
2012 and 111 in 2015.  In 2017, the MEDIC made 23 immediate advisements, 
81 percent fewer than the 119 made in 2016.  
The MEDIC attributed this decrease to a change that CMS made to the 
MEDICs immediate advisements criteria in 2016.  This change removed the 
criterion that immediate advisements may result from situations involving 
the subjects of current program investigations.  Therefore, the MEDIC no 
longer refers immediate advisements to OIG based on OIGs current open 
and active investigations.  
Exhibit 11: The MEDIC made fewer immediate advisements from 
2012 to 2017 
250
200
CMSchanges 
immediate 
150
advisement criteria
100
50
0
2012 2013 2014 2015 2016 2017
Source: OIG analysis of MEDIC workload statistics for 2012 through 2017.   
The number of requests for information (RFIs) the MEDIC 
received and completed increased from 2012 to 2017 
Both the number of RFIs received and completed increased from 2012 to 
2017 as shown in Exhibit 12.  In 2012, the MEDIC received 466 RFIs from OIG, 
DOJ, and other organizations.  This total dipped to 456 in 2013, but rose 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  29 
OEI-03-17-00310   
each year after, to 814 in 2017.  The number of RFIs that the MEDIC 
completed overall increased from 2012 to 2017.  The MEDIC completed 
492 RFIs in 2012 and 449 in 2013.  Over the next 3 years, the MEDIC 
increased the number of RFIs it completed to 812 in 2016.  In 2017, this total 
decreased to 784.  
Exhibit 12: The MEDIC received and completed more RFIs from 2012 
to 2017 
1,000
RFIs received from allorganizations1
800 RFIs completed for all organizations2
600
400
200
0
2012 2013 2014 2015 2016 2017
Source: OIG analysis of MEDIC workload statistics for 2012 through 2017. 
 
1 RFIs received from OIG in 2012 are for calendar year 2012. 
 
2 RFIs completed during 2012 through 2014 do not include RFIs completed for 
  organizations outside of OIG and DOJ.  These data were not included in the 
MEDICs 2012 through 2014 workload statistics. 
Th e number of complaints the MEDIC received in  
 
2012 to 2017 ranged between 8,400 and 11,200 complaints per 
year  
The MEDIC continuously receives and processes complaints that may lead 
to the opening of a MEDIC investigation.  Exhibit 13 provides the number of 
complaints received by the MEDIC in each of the 6 years reviewed.  From 
2012 through 2017, there have been both increases and decreases in the 
number of complaints received from year to year.  Over these years, CMS 
repeatedly revised the reporting requirements for tracking the complaints 
processed by the MEDIC.  Because of this, we were unable to provide trend 
data for the overall number of complaints processed by the MEDIC.  
However, from 2015 to 2017, the number of complaints referred to plan 
sponsors soared from 0 to 5,049. 
 
 
 
 
   
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OEI-03-17-00310   
Exhibit 13: From 2012 through 2017, the number of complaints the 
MEDIC received ranged from 8,400 to 11,200  
12,000  
10,000  
 
8,000
 
6,000
4,000
2,000
0
2012 2013 2014 2015 2016 2017
Source: OIG analysis of MEDIC workload statistics for 2012 through 2017. 
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OEI-03-17-00310   
APPENDIX D:  Agency Comments 
 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  32 
OEI-03-17-00310   
 
 
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  33 
OEI-03-17-00310   
 
   
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  34 
OEI-03-17-00310   
ACKNOWLEDGMENTS 
Tanaz Dutia served as the team leader for this study.  Others in the Office of 
Evaluation and Inspections who conducted the study include Nancy J. 
Molyneaux, Emily Dieckman, and Aisha Davis.  Office of Evaluation and 
Inspections staff who provided support include Althea Hosein and Meghan 
Riggs.  
This report was prepared under the direction of Linda Ragone, Regional 
Inspector General for Evaluation and Inspections in the Philadelphia regional 
office, and Tara Bernabe, Deputy Regional Inspector General.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To obtain additional information concerning this report or to obtain copies, 
contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov.  
The MEDIC Produced Some Positive Results but More Could be Done to Enhance its Effectiveness  35 
OEI-03-17-00310   
ABOUT THE OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public 
Law 95-452, as amended, is to protect the integrity of the Department of 
Health and Human Services (HHS) programs, as well as the health and 
welfare of beneficiaries served by those programs.  This statutory mission is 
carried out through a nationwide network of audits, investigations, and 
inspections conducted by the following operating components: 
Office of Audit  The Office of Audit Services (OAS) provides auditing services for HHS, either 
by conducting audits with its own audit resources or by overseeing audit 
Services 
work done by others.  Audits examine the performance of HHS programs 
and/or its grantees and contractors in carrying out their respective 
responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, 
abuse, and mismanagement and promote economy and efficiency 
throughout HHS. 
Office of Evaluation  The Office of Evaluation and Inspections (OEI) conducts national evaluations 
to provide HHS, Congress, and the public with timely, useful, and reliable 
and Inspections 
information on significant issues.  These evaluations focus on preventing 
fraud, waste, or abuse and promoting economy, efficiency, and 
effectiveness of departmental programs.  To promote impact, OEI reports 
also present practical recommendations for improving program operations.   
Office of  The Office of Investigations (OI) conducts criminal, civil, and administrative 
investigations of fraud and misconduct related to HHS programs, 
Investigations 
operations, and beneficiaries.  With investigators working in all 50 States 
and the District of Columbia, OI utilizes its resources by actively 
coordinating with the Department of Justice and other Federal, State, and 
local law enforcement authorities.  The investigative efforts of OI often lead 
to criminal convictions, administrative sanctions, and/or civil monetary 
penalties. 
Office of Counsel to  The Office of Counsel to the Inspector General (OCIG) provides general 
legal services to OIG, rendering advice and opinions on HHS programs and 
the Inspector 
operations and providing all legal support for OIGs internal operations.  
General 
OCIG represents OIG in all civil and administrative fraud and abuse cases 
involving HHS programs, including False Claims Act, program exclusion, and 
civil monetary penalty cases.  In connection with these cases, OCIG also 
negotiates and monitors corporate integrity agreements.  OCIG renders 
advisory opinions, issues compliance program guidance, publishes fraud 
alerts, and provides other guidance to the health care industry concerning 
the anti-kickback statute and other OIG enforcement authorities.