Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENERAL 

SURVEILLANCE AND UTILIZATION 

REVIEW SUBSYSTEMS’ 

CASE REFERRALS TO 

MEDICAID FRAUD CONTROL UNITS 

I+ * SERVQ~. 

0 3, JUNE GIBBS BROWN 

/ Inspector General 

NOVEMBER 1996 

@XtW-OUUUl?n 

49 
EXECUTIVE SUMMARY 

PURPOSE 

To assessthe effectiveness of the Surveillance and Utilization Review Subsystems’ 

development and referral of fraud issues to Medicaid Fraud Control Units. 

BACKGROUND 

The Medicaid statute authorizes funding for States to foster development and 

implementation of the Medicaid Management Information System (MMIS). One of 

the sub components of the MMIS is the Surveillance and Utilization Review 

Subsystem (WURS). This subsystem applies automated post-payment screens to 

Medicaid claims adjudication to identify aberrant billing patterns, which may be fraud 

or provider abuse. The S/URS staff reviews systems output and conducts preliminary 

reviews of providers to determine whether they can substantiate a pattern of fraud. In 

such cases,they must refer the matter to the States’ fraud control unit for 

investigation. The Health Care Financing Administration (HCFA) provides Federal 

oversight of the Medicaid State agency, including S/URS. 

The statute also authorizes Federal matching funds for the establishment of State 

Medicaid Fraud Control Units (MFCUs). Forty-six States have established such fraud 

units as of January 1996. They investigate allegations of Medicaid fraud and patient 

abuse/neglect. For the four States not having MFCUs, the Medicaid State agency is 

responsible for investigating allegations and referring these cases to State or Federal 

prosecutorial authorities. 

For this inspection we obtained data from 45 States and visited 7 of them to gain a 

better understanding of the interaction between S/URS and MFCUs. 

FINDINGS 

The number and percentage of suspected fraud referrals from SKJRS has declined in 

the past 10 years. 

In calendar year 1985, the 36 MFCUs received 996 potential S/URS fraud case 

referrals or 34.7 percent of the total MFCU fraud workload. In contrast, in 1994, 

S/URS for these same States referred 863 potential fraud cases,24 percent of the total 

MFCU fraud workload, and for 45 States S/URS referred 956 cases,24.6 percent of 

the total MFCU workload, a significant decline. 
MFCU officials are divided in their opinion concerning the extent and quality of 

S/URS development of suspected &aud cases. 

While officials from four MFCUs stated that S/URS development of cases is adequate, 

three commented that these referrals need improvement. We found that S/UEXSstaff 

differ in their method for researching past complaints and developing current fraud 

issues prior to referring these matters to the fraud units. This can adversely affect the 

quality of the referrals. The MFCUs cited the following problematic issues: 

0 the allegation of fraud is not clear; 

0 the allegation is not developed enough to determine if it is an isolated instance 

or a pattern of practice; 

l policies and/or correspondence at the State Agency is not clearly written, 

therefore adversely impacting on establishing provider intent; and 

0 the S/UK3 electronic and/or hard copy claims data needed to prove the fraud 

are not available. 

The S/URS employees have not received sufkient training to assure that they develop 

and refer suspected fi-aud allegations in a consistent and appropriate manner. 

States’ S/URS staff cite inadequate training in the identification and development of 

fraud allegations and edits. 

l Five S/URS staffs have not received training from Medicaid Fraud Control 

Units on desired content or process for case referrals. 

l Three S/URS staffs have not attended any HCFA fraud or provider abuse 

training. 

The HCFA does not routinely monitor S/LJRSdevelopment to establish whether 

potential fraud issues are being appropriately and consistently ana@ed and referred. 

Three States report that HCFA did not conduct any review of their S/URS operation, 

including their case development and referral process. Four States report that HCFA 

reviewed it, however, three of these said it was simply a part of the Systems 

Performance Review (SPR) which did not include case reviews and agency feedback. 

RJTOMMENDATIONS 

Concerns regarding the effectiveness of MFCUs are similar to those discussed in our 

report entitled ‘canierZ%d Un&” OEI-6-94-00470. As a result, we believe that a 

concerted effort addressing both Medicare and Medicaid fraud units is called for. 

ii 
We are proposing a uniform team approach. We recommend that HCFA, in 

consultation with the Office of Inspector General should: 

Convene a Medicare and Medicaid fraud and abuse task force to plan and implement 

improvements in fraud unit operations. This would include: 

b Clarifying goals and objectives for program integrity efforts. 

b Establishing guidelines for developing suspected fraud cases. 

b Developing a universal protocol for appropriately referring fraud and abuse 

cases. 

b Coordinating data systems to ensure that data are reliable and consistent across 

all entities in the fraud and abuse fighting network. 

b Developing a training program designed to educate program integrity personnel 

on procedures, case referrals and best practices. 

Develop and implement a comprehensive evaluation system for S/uRs case 

identification, development and referral activities. 

HCFA should consider establishing a system similar to the one used to evaluate 

Medicare contractors. Once the system is established it should be incorporated into 

periodic HCFA reviews of the Medicaid State agency and the Systems Performance 

Review. 

AGENCY COMMENTS 

We appreciate all the positive steps that HCFA has taken thus far to safeguard the 

Medicare program and we recognize the accomplishments of the Program Integrity 

Group. We are pleased that HCFA has concurred with our recommendations and we 

look forward to working with HCFA in their implementation. 

We believe that the best approach would be a collaborative one involving HCFA and 

OIG, with consultation from high performing State Surveillance and Utilization 

Review Subsystem Units (S/URS) and carriers, to improve program integrity activities 

at the carrier and State level. We suggest that this effort focus on: 

0 Developing and implementing model practices to help carriers and S/URS 

decide which casesshould be developed for medical review and overpayment 

recovery or for referral for fraud. In addition, existing protocols should be 

implemented for referral of fraud casesto appropriate investigative entities (the 

OIG for Medicare casesand Medicaid Fraud Control Units for Medicaid 

cases). We believe that together we can increase overpayment recovery 

... 111 
amounts and increase the number of successful prosecutions by law 

enforcement agencies. 

Revising current contractor performance measures that reward carriers for 

overpayment recovery but not for fraud and abuse referrals or efforts to 

improve claims processing safeguards. 

Identifying the most effective practices which carrier and State personnel use to 

eliminate claims processing vuherabilities that enable providers to defraud 

health programs. 

We believe that achieving the goals both HCFA and the OIG have established for 

improving program integrity functions at the carriers and in the States can best be 

accomplished by these kinds of collaborative efforts. We look forward to working with 

HCFA to bring about further measurable change. 

Concerning the establishment of a comprehensive system for HCFA to evaluate 

S/URS case identification, development and referral, we are pleased that HCFA also 

concurs with this recommendation. We believe that this initiative is very important to 

the overall integrity of the Medicaid program. We are delighted to learn of HCFA’s 

recent fraud and abuse initiatives and hope that the S/URS performance evaluation 

system will be implemented as soon as practical. We remain committed to 

collaborating with HCFA in their efforts to rapidly develop and implement this system. 

The full text of HCFA’s comments is contained in Appendix D. 

iv 
TABLE OF CONTENTS 

PAGE 

EXECUTIVESUMMARY 

INTRODUCTION.. ............................................... 1 

FINDINGS ...................................................... 5 

l Referrals ..................................................... 5 

l Case development .............................................. 6 

l Training ...................................................... 7 

l Monitoring .................................................... 8 

RECOMMENDATIONS ............................................ 9 

AGENCY COMMENTS ........................................... 11 

APPENDICES 

A: MFCU sources--GAO sample States fraud case referrals CY 1994 ....... A-l 

B: MFCU sources--national data fraud case referrals CY 1994 ............. B-l 

C: MFCU sources--sample States fraud case referrals CY 1994 ............ C-l 

D: Agency Comments ........................................... D-l 
INTRODUCTION 

PURPOSE 

To assessthe effectiveness of the Surveillance and Utilization Review Subsystems’ 

development and referral of fraud issues to Medicaid Fraud Control Units. 

BACKGROUND 

The Congress established the Medicaid Program in 1965. It is a State administered 

program, which receives Federal matching funds. Each State is required to designate 

the agency responsrble for the management of the Medicaid program. 

In 1972, Congress enacted Public Law 92-603. This law provides funding to States to 

foster development and implementation of the Medicaid Management Information 

System (MMIS). One of the sub components of the MMIS is the Surveillance and 

Utilization Review Subsystem (S/URS). This subsystem applies automated 

post-payment screens to, Medicaid claims adjudication to identify aberrant billing 

patterns, which may be fraud or provider abuse. The S/LJRS staff reviews systems 

output and conducts preliminary reviews of providers to determine whether they can 

substantiate a pattern of fraud. In such cases,they must refer the matter to the 

States’ fraud control unit for investigation. These units were designed to serve as 

major contacts/analysis points for detection and referral of potential fraud and 

provider abuse cases to assigned components within the States’ that pursues 

investigation of alleged criminal fraud within the Medicaid Program, usually the 

Medicaid Fraud Control Units (MFCUs). 

Fedeml Ove of SKIRS 

The Health Care Financing Administration (HCFA) provides Federal oversight of the 

Medicaid State agency, including S/URS. It initially reviewed quality and quantity of 

State agency referrals to MFCUs as part of its overall State Assessment of the 

Agency. It discontinued this component of the review, as a result of 

Public Law 96-398, enacted in 1980, which mandated that all States have an approved 

MMIS system by September 30, 1985. The law also specified that HCFA evaluate 

States’ system requirements and performance standards at least once every 3 years. In 

1981, it implemented the Systems Performance Review (SPR) to comply with this 

legislation. The review evaluates the system, including the S/URS subsystem, and 

measures process performance but not outcomes from this process. It does not require 

formal monitoring or evaluation of S/URS staffs’ development and referral of potential 

fraudulent claims to MFCUs. 

1 
Mkdicaid Fmud Conbd Units 

In 1977, Congress enacted Public Law 95-142, which authorized Federal matching 

funds for establishment of State Medicaid Fraud Control Units. Forty-six States have 

now established such fraud units as of January 1996.’ They investigate allegations of 

Medicaid fraud and patient abuse/neglect. For the four States not having MFCUs, the 

Medicaid State Agency is responsible for investigating allegations and referring these 

casesto State or Federal prosecutorial authorities. 

To assure investigative independence, Congress prohibited MFCUs from being part of 

the same “umbrella” organization which contains the Medicaid State agency. 

Generally, they are located in the State’s Attorney General’s offices and most perform 

both investigatory and prosecutorial functions. 

Regulations require Medicaid State agencies and MFCUs to enter into a 

Memorandum of Understanding in which the agencies agree to refer all cases of 

suspected fraud to the unit. In addition, the agency must afford the fraud unit access 

to their records. The S/URS is the entity within the Medicaid State agency that 

performs these functions. 

In a prior report, titled “Referral bv Medicaid Agencies to Fraud Control Units,” 

OAI-03-88-00170, October 1989, we assessedthe effectiveness of the process used by 

Medicaid agencies to refer possible fraud casesto the MFCUs and offered suggestions 

for improvements. In the report we highlighted the following problems: 

0 low number of State agency fraud referrals; 

l lack of HCFA monitoring and oversight; and 

l the need for additional technical assistance. 

We recommended that the HCFA: 

0 hold State agencies accountable for making fraud referrals by measuring and 

evaluating their development of these cases; 

0 assure that State agencies are provided increased technical assistance in the 

areas of identification and referral of potential fraud cases; and 

l designate a coordinator for technical assistance that would coordinate with the 

OIG. 

’ Idaho, Montana, Nebraska and North Dakota do not have MFCUs. 

2 
In response to this report, HCFA opposed including the review of S/URS 

development and referral of suspected fraud casesas part of the Systems Performance 

Review. It has not implemented the review as part of any State agency performance 

evaluation. 

The General Accounting Office in their study, “Medicaid: Results of Certified Fraud 

Control Units,” HRD-87-12FS, October 1986, obtained information concerning the 

volume of referrals from Medicaid State agencies to the fraud units. The report cited: 

This is 996 of the 2,871 cases opened from all sources that year or 34.7 percent of the 

overall MFCU workload.2 

li!lETHODoLoGY 

We researched Federal laws, regulations, and agency policies concerning development 

and referral of allegations of Medicaid fraud by S/URS to MFCUs. In addition, we 

developed and field tested data collection instruments which were administered on-site 

to officials of these agencies as part of the preinspection process. We designed these 

instruments to obtain the following information: 

l States’ policies and procedures used to develop and refer allegations of 

Medicaid fraud to the MFCU; 

l the state of communication between the MFCU and S/URS; 

0 the quantity, quality and source of training; 

l deterrence efforts; 

l barriers to effective development and referral of cases; 

0 suggested improvements; and 

0 statistics concerning case referrals, case status and case outcomes. 

From the universe of fraud units, we excluded the five States, (California, Florida, 

Illinois, New York and Texas) that participate in the national project, ‘opemrion 

Restore Zest: since the OIG is evaluating referrals to these units as part of that 

project. From the remaining States, we obtained fiscal year (FY) 1994 data. This 

data included the number of casesreferred by S/URS and the number of fraud unit 

2 There were 36 certified Fraud Control Units by the end of calendar year 

(CY) 1985. The 14 States not certified were: Alaska, Georgia, Iowa, Kansas, 

Missouri, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, 

South Carolina, South Dakota, and Wyoming. 

3 
staff employed during each of the quarterly reporting periods. We compared this data 

to similar data from earlier years. 

To select the States for more intensive review, we arrayed them from highest to lowest 

ratios of referrals per unit employee. We selected a purposive sample of seven States, 

using the following criteria: 

l location within the array of States (upper or lower half); 

0 amount of Medicaid expenditures in the State; 

0 number of Medicaid beneficiaries in the State; 

l known past or current problems involving either the MFCU or S/URS 

operations in States; and 

l location in the United States, to account for any regional variances. 

Using these criteria, we purposively selected four States from the upper half of the 

array (Michigan, Tennessee, Virginia, and Washington) and three from the lower half 

of the array (Massachusetts, New Mexico, and Utah). 

Using data collection instruments, we personally interviewed staff in MFCUs and 

S/URS. We then compiled all of the information into a database and tabulated the 

results. Using this data, we prepared summary information which forms the basis for 

this inspection report. 

We conducted our review in accordance with the Qzu&y Standard for Inspections 

issued by the President’s Council on Integrity and Efficiency. 

4 
FINDINGS 

Overall, we found little progress in quantity, quality and agency oversight of S/URS 

development and referral of suspected fraud casessince our 1989 review. 

THE NUMBER AND PERCENTAGE OF SUSPECI’ED FRAUD REFERRALS 

FROM S/URS HAS DECLINED INTHEPASTlOYEARS. 

For CY 1994, S/URS in the 7 sampled States referred 268 cases,or 14 percent of the 

1,965 cases they reviewed, to the Medicaid Fraud Control Units. Of these, 30 percent 

of referrals were accepted for full-scale investigation and 59 percent were declined. 

The remaining cases are pending initial MFCU evaluation. 

For this same period, we also compared referrals received by MFCUs from Medicaid 

State agency S/URS and Medicaid State agency-other for the same States used by 

GAO in their 1987 reports, for all MFCUs for CY 1994, and our sample States for 

CY 1994 (Table 1). 

Table 1 

Comparison of Single State Agency Referrals to the MFCUs-19SS/l994 

Total Fraud Referrals: 

Total Case Load: 

Percentage of Total 

Referrals: 

GAOReport MFCUReports MFCU Reports Sample IWCUs 

FY1985 CY19!M CY1994 CY1994 

(36 State!s) w -=I (45 states) (7 St-f9 

996 863 956 284 

2,871 3,597 3,882 1,199 

34.7% 24% 24.6% 23.7% 

Each of these comparisons demonstrates a significant decline in S/URS referrals as 

reflected in true numbers and in the percentage of total MFCU workload when 

comparing 1994 data against 1985 results. Appendices A, B, and C expand upon the 

data displayed in Table 1 to show respectively: sources of fraud referrals to Medicaid 

fraud units in CY 1994 for the same 36 States that were used in the 1987 GAO study; 

aligned data for 45 States that had fraud units in CY 1994; and data for the sample 

States used in this evaluation. 

3 The GAO report used data for FY 1985. 

5 
MFCU OFFICIALS ARE DIVIDED IN THEIR OPINION CONCERNING THE 

EXTEZNT AND QUAIJTY OF S/URS DEVELOPMENT OF SUSPECIED FRAUD 

CASES. 

We found that S/URS staff differ in their method for researching past complaints and 

developing current fraud issues prior to referring cases to the Medicaid Fraud Control 

Unit as shown in Table 2. 

Table 2 

Development of Referrals 

states 

Using the 

Method Process used Process 

Medical Records: Examination of Medical records to 

substantiate claims. 

sampling: Sample additional claims from the provider 

and/or conduct medical records review when 

appropriate. 

Pre-Payment Review: Place a provider being investigated on 

Pre-Payment review.4 

Service Verification: Contact beneficiaries to determine if services 

were rendered. 

Associate Previous cornP

laints and S/URS cases 

with the current review. 

Refer cases to the MFCU without development 

at the earliest indication of fraud. 

6 

5 

This variance in development can adversely affect the quality of referrals. While four 

MFCUs stated that S/URS development of casesis adequate, three commented that 

these referrals need improvement. Problematic referral issues cited include: 

allegation of fraud is not clear; 

0 the S/URS has not developed the allegation beyond the initial fraud issue to 

determine if this is isolated or a pattern of practice; 

4 One State reported that its claims system was incapable of implementing 

pre-payment review, and that it could only suspend the provider’s Medicaid 

billing number. 

5 One State reported that they cannot adequately research past provider 

complaints and/or educational efforts since there is not a central repository for 

filing provider information, educational contacts, and post S/URS development. 

6 

0 
0 the S/URS has not established through its files and correspondence that there is 

a basis that the provider knew, or should have known that this method of 

practice constituted fraud; 

0 only the complaint is sent with little if any supporting documentation; and 

0 the S/URS profiles are inadequate, and the MFCU has trouble obtaining 

electronic data. 

We received a number of comments from MJXUs concerning S/UK3 case 

development. These include: 

The MFCU’s identified the following as actions which would make case referrals 

more effective and productive: 

l provide adequate and clear case summaries which succinctly describes the 

analysis and basis for suspicion of fraud; 

0 sample additional claims of a similar type to see if they can establish a pattern 

of fraud in similar claims; 

l provide additional data on total volume of claims, procedure codes 

in question, and analysis of other areas of the practice that appear aberrant; and 

l provide copies of educational letters previously sent to providers. 

The diversity of S/URS development methods and MFCU recommendations for 

improvement highlights the need for adoption of consistent standards for development 

and referral of these cases. 

THES/UR!3EMPIDYEESHAVENOTRECEIVEDSUFFICIENTTRAINlNGTO 

ASSURETHATTHl3YDEvELoPANDREFERSUSPECIEDFRAUD 

ALLEGATIONS IN A CONSISI’ENT AND APPROPRIATJZ MANNER. 

States’ S/URS staff cite inadequate training in the identification and development of 

fraud allegations and edits. 

l Five S/URS staffs have not received training from Medicaid Fraud Control 

Units on desired content or process for case referrals. 

l Three S/URS staffs have not attended any HCFA fraud training. 

7 
States note that staff turnover remains a consistent problem. Therefore, training of 

new staff and periodic refresher training of all staff is vital to the S/URS units’ overall 

success. 

THE HCFA DOES NOT ROUTINEL Y MONITOR S,KJRSDEVELOPMJWI TO 

ESTABLISHWHETHERPOTENTIAL FRAUD ISSUES ARE BEING 

APPROPRIATELY AND CONSISIENTL YANALYZEDANDREFERRED. 

Three States reported that HCFA did not conduct any review of their S/URS 

operation, including their case development and referral process. Four States report 

that HCFA reviewed it, however, three of these said it was simply a part of the 

Systems Performance Review (SPR) which did not include case reviews and agency 

feedback. 

The HCFA designed the SPR as a performance review of the Medicaid Management 

Information System @MIS), including the S/URS subsystem. Standard 6 of this 

review specifies: 

The S/URS component of the SPR remains an instrument to measure how well the 

Medicaid Management Information System (MMIS) identifies potentially fraudulent 

Medicaid claims. It does not, however, evaluate how well S/URS staff develops output 

from this system, or whether issues are appropriately referred to the MFCUs for 

full-scale investigation. Our 1989 OIG report brought this serious omission from 

HCFA’s oversight process to their attention. However, HCFA opposed using the SPR 

for this purpose and offered no alternative remedies. 
RECOMMENDATIONS 

Efforts by the OIG and HCFA to identify and combat Medicaid fraud and abuse have 

intensified over the past several years. As part of these efforts, the Department is 

piloting a demonstration program entitled OpemZionRestore 2hrst. Under this 

demonstration, the OIG in partnership with HCFA emphasizes interdisciplinary 

teamwork with other State and Federal agencies as an important component to 

enhance fraud and abuse activities. 

The HCFA is focusing on improving S/URS and MFCU relations and increasing 

cooperation between the Medicare and Medicaid programs in the detection and 

referral of fraud and abuse issues. As part of these efforts, they have formed a 

permanent Medicaid fraud and abuse coordinating council which serves as a forum for 

problem discussion/resolution, training, and information exchange. In addition, they 

are cosponsoring with the Office of Managed Care, regional and national 

conferences/symposiums on fraud and abuse in managed care programs. Further, they 

are engaging in other ongoing projects designed to examine compliance and facilitate 

the exchange of fraud and abuse information among the Medicare program, Medicaid, 

S/URS and the MFCUs. 

We commend HCFA for its efforts to improve fraud referrals from S/URS units to 

MFCUs. However, we believe HCFA should expand these initiatives and pursue 

additional actions to facilitate identification and removal of barriers that have 

hampered case detection, development, and referral activities. 

Concerns regarding the effectiveness of MFCUs are similar to those discussed in our 

report entitled ‘canier Fmz& IX&r,” 0El-054440470. As a result, we believe that a 

concerted effort addressing both Medicare and Medicaid fraud units is called for. We 

are proposing a uniform team approach. We recommend that HCFA, in consultation 

with the Office of Inspector General should: 

Convene a Medicare and Medicaid bud aud abuse task force to plan and implement 

improvements in fraud unit operations. This would include: 

b Clarifying goals and objectives for program integrity efforts. 

b Establishing guidelines for developing suspected fraud cases. 

b Developing a universal protocol for appropriately referring fraud and abuse 

cases. 

b Coordinating data systems to ensure that data are reliable and consistent across 

all entities in the fraud and abuse fighting network. 

b Developing a training program designed to educate program integrity personnel 

on procedures, case referrals and best practices. 

9 
Develop and implement a comprehensive evaluation system for S/URS case 

identikation, development and referral activities. 

HCFA should consider establishing a system similar to the one used to evaluate 

Medicare contractors. Once the system is established it should be incorporated into 

periodic HCFA reviews of the Medicaid State agency and the Systems Performance 

Review. 

These protocols should focus on deter-mining whether S/URS development and 

referral of casesis in accordance with Federal laws, regulations, HCFA procedures 

and the Memorandum of Understanding with the Medicaid Fraud Control Unit. In 

addition, the review should strive to identify best practices that could be shared with 

other S/URS units and weaknesses that should be addressed by HCFA and/or the 

Medicaid State agency. 

10 
AGENCY COMMENT’S 

We appreciate all the positive steps that HCFA has taken thus far to safeguard the 

Medicare program and we recognize the accomplishments of the Program Integrity 

Group. We are pleased that HCFA has concurred with our recommendations and we 

look forward to working with HCFA in their implementation. 

We believe that the best approach would be a collaborative one involving HCFA and 

OIG, with consultation from high performing State Surveillance and Utilization 

Review Subsystem Units (SiURS) and carriers, to improve program integrity activities 

at the carrier and State level. We suggest that this effort focus on: 

Developing and implementing model practices to help carriers and S/URS 

decide which casesshould be developed for medical review and overpayment 

recovery or for referral for fraud. In addition, existing protocols should be 

implemented for referral of fraud casesto appropriate investigative entities (the 

OIG for Medicare cases and Medicaid Fraud Control Units for Medicaid 

cases). We believe that together we can increase overpayment recovery 

amounts and increase the number of successful prosecutions by law 

enforcement agencies. 

Revising current contractor performance measures that reward carriers for 

overpayment recovery but not for fraud and abuse referrals or efforts to 

improve claims processing safeguards. 

Identifying the most effective practices which carrier and State personnel use to 

eliminate claims processing vulnerabilities that enable providers to defraud 

health programs. 

We believe that achieving the goals both HCFA and the OIG have established for 

improving program integrity functions at the carriers and in the States can best be 

accomplished by these kinds of collaborative efforts. We look forward to working with 

HCFA to bring about further measurable change. 

Concerning the establishment of a comprehensive system for HCFA to evaluate 

S/URS case identification, development and referral, we are pleased that HCFA also 

concurs with this recommendation. We believe that this initiative is very important to 

the overall integrity of the Medicaid program. We are delighted to learn of HCFA’s 

recent fraud and abuse initiatives and hope that the S/URS performance evaluation 

system will be implemented as soon as practical. We remain committed to 

collaborating with HCFA in their efforts to rapidly develop and implement this system. 

The full text of HCFA’s comments is contained in Appendix D. 

11 
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APPENDIX A 

MFCU Sources-GAO Sample States’ 

Fraud Case Referrals 

CY 1994 

summary Referral Source Total 

177 j .. .::.:>$;:l’i,;:,:i:;:;:; ;::~::jiiiJii.ji:ii:jjjjj:: ,..$g$g,‘:i:.,‘:,,:::j:.::‘,: :;+$gy:::..’.ji....f ‘.:’‘.:,\:.i::.j,.:j:;,‘2;<j‘::.I 1:y.;.: .::.I::,:;:;: I::i:i:iii:~~:i; 

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State Licensure Authorities “’ .:.: ,.:::..:::.:,:::,:,,. 100 .< ...,.:, ,.:::..j:j:i:j,j:j:j:.::.:.:, ,...... :.::j‘::..: .,.:2::..::::\:;;jj::.j.y,.:;:::..,j. .:.. :.: ..:.j:j:j::.:.: . ::::::j:;:j:;:lj:j:::i:i:.: ,. ,.:...:.:.:...:., :>:::;:;:,:::;::::y::::.:,:‘; :.:. .~;:/.., .,:,:.:,: “’““““” :... ,jY::j:;:: .:..:::. :.:. 

g::jj;;: 

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..:... 

;:,Ij:l;:lj::ii;:f)g 

Prosecutor:..:.,.: :::...y..:.‘, ,. ,,, ...:..: :,., ::.y::: 20 

(.,.....,......... .,:.:) .:..:...:i.:...;:\:;:;:;:: .:::.:::r: ,... ,’‘., :+:;:..:::$i:,1$:.y::,:,:,, 1::: ::::,.:..:.:; . .‘.‘.‘..:.:.:.:.:.~~~:::::::::::::::.;.::;;:;::.:. ;‘:,‘, ,,I:::,:.:.. :::y::.:..:::iy;:y;;.::. . :

.:‘.‘..:.: .,.:..~..:...y:::::...:.:.:.:.:.:; ,.... 

Private Citizen 956 .,.,.:.)):, . .:,:j.:. : : :..:..:::::j:.

::..::(: :.:::::::x ::. ,),::::;::::::::,:~ .,.:x1 .::.::: .::: : ..: .,::::.,.‘..... ..:..:.:..:::::..::::.:.:j :+:.::F:“..::.y:. . :y,.,i.jj,.jj.:,:: .::. ,: ,+j,.,,....:,, ,.. .. .: ::..::. . ,.:: :.::::::~,:.::.:...::::.:....i,,I:‘:. .‘...‘.::‘:.‘j:j’: :,::::::::::..:I ,:.:;\.:: ,::j.j::::’:: ::.:.: .z.: :f:::::ij,;:::j,>,.:.:,,. 

:..:...:. ~~~~~~:j;~~~~~~:li:---i ~:j~l~~,~:~~~:~~,~~~~~~~ .,. i;i:iiil’;i:i:iiii~~~ :.:.,,..,:;j.; :jq:;:;i::j;jj;j:: ‘.::. :ij~~:j)j~~:~~: .:::~: :,::i..:i:liiiii.ii:i~~~~~~~ .“.“.‘::.j:j:;.j-jj .:: ,.:;, : .::., ,L,:.::. : :,:‘$3. I,. :...:.:.,.,.,.,.....,.....,., i;:; ,., .,;:::: :yj ..: :,:: .:j,j,.. .,.,.:...(... :..:.. ,,::,. jj:j;:j:i:‘:y:‘:l:. 

344 ..,.’ :$:F:!i:j,,:.::.::: ....5:. ;i::ii:‘I:lil..:ii~~~ ....,,:.:. y State Agency;:::/:::::.: 1.:..‘. . ,.,,:j:; ..;: :.,,: ;, .:’ j:y....:.. .

;!:‘,~~il!~~~~,::.;$i::..;:;:.:,. ,:.>:.>:.:.:.:.:.:. . .j,, .::::;::;.;I:l:l:::‘:i::,:.:.,.: j;:::: :. j;:: :i:‘.i.:iisi’i:ilr.i I:lj:llii:)j:l:iij.~: ...I. .’ ~~~~~z~~~~“::1Pi:.:..:..;l:irfi~~,,_-:~~~::: I~llijij.j,l,i:l:‘:i:I:i:i:l:i’:i~:li’.~ii~~~~--.~~~~~~~~~~~ 

.,.::..;,:::,:,:.: :,.:: .,;, .::,+;.;,,,;. .:,...::.;.;.. .,:,;,, :.). ,.,... ::,..; ;:.;.:.. .y.;.; .,.... .:....... :.. .. . .:...:. ,.,.:. .., 

Other :.:.:.:.:.:...:.~:...:...: :..d.‘.... :::.. ..3 :::,j :/..A.... ..........~~ 963 ..... .,. .. . :.:.:. .,: ,J::::.. :,.,.: 3:. :.:....A....._....:::;::::. :.:,:jj:;:.:;i::.:::::I( ... .:..:: ...,: ,..,),:,... ““’:. :,. ,,j,jj:.:.~.i,~,~.:.~,~,~.~’...., ..:::::::.::j:::.:.:,..’““” ,;. ~.,.:..//.:i:i:::i,:l’i”‘.‘:..,: :f::.... :y::j:x .:.:..:.:...:... ..,.: .j:::,:.:i:::::::j,‘~:~:~:, ...::,:,:.: .,,,, :jj, :::::.‘,:::::I::::::.~ ?j\.:.>:.:.:.: . : 

~~~~~~~:-i;ii’~l;lii::-:;li,i:‘:; .‘ii:i:i:i;:‘:;ii:ii:‘i::ij::-jjj~j~~~~i:;j:j:~~ ;I$ ;;@g$ ,. j:: :‘l:l:::i;,: :y::.:::. ~~~~~~ :.il~~l~i:i:,ic::i:i:tiili~;:I.I$$g‘i:-‘:.ii.~ :.i,.~~:a::i~~~~~~~~:~:li~ .,..,. .,.,..., ,..., . 

Single State Agency Referrals as a percentage of total MFCLJ worklo& 24% 

’ This is a summary of referral sources for the 36 MFCU States used by the 

General Accounting Office in their 1987 report. 

2 This is S/URS and Single State Agency (Other) referrals as compared to Total 

referrals. 

A-l 
. . . . . . . :.::. ..:.: . . . . ..,:::: :,. . . ;:z ,, ::: . . . . . 

. . . . . . . . . . . . . . . . . . . . . . ..~...........~.~.~.~. . . . . . . . . . . . . . . . . . . . . . 

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..;:.. . . . . ..,.. .. . ,., . . . . . . . . 

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. . . . . . . 

,.:. . . . . . . :.> ,.:... ,:::. . . . ,.,:;I j::i ./. . . iilii;;:;::;iiilii 

. . . . . . . . . . ,,.. . ,:,. ::::,.;:: . . . . . . . . . . . 

. . . . . . . . . . . . . . ..:.:.:.:.:,:.:.:.:. ,, ,.:.:.:.:.j,:.:.,: ..,.,.: . . . . . . . . . . . . . . . . :.. ::...:.:..... . . .::, .:::..: :::::.::y: ,:y: . . . . . . . . . . . . . . . . . .,.,. . . . . . . . . . . i’::I:l . . . . v.:: ,::;:,,: :.::.:..: . .::.:.: . 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..,,: 

. . . . 

APPENDIX B 

MFCU Sources-National Data’ 

Fraud Case Referrals 

CY 1994 

summary Referral Source Total 

Single State Agency (Other):i:;;I:i:l;.:::‘:i> .,:,:;.y.:,.::;:.:: 

213 .:., .+:.: :j:j;:.:.:...j,. 1::. :,. ,:.,:,.::,’ .2: .,‘., .. .:..j:.‘, .jj:.. ,.,. .:; ...,.....:: . . ..( :..:.,.:>:.:.:)::j:::j ,.,.,.,.,. ..I.”.‘..Aj’j .:.: ,.$.:;. ,::, j:.:...:jj.$:j:jj::~;, ,:::‘:.:.:.: Is~~~~~~~~~~~~~~~~~~~~~~,~~~:::i:i~,:ii;:i:iii:iiiiili~_:,i-::,-,,:):-;::: i3;‘:;ii;i:l.‘r:j~,- ;yp1 

,.; .:.:...:...~:.j):./.: ....:.... 

I,.,.:..:.,;,z;.::gli!i:-i’i;.‘::jii.l,.~.~~:illi:_~~,:;i;:l:i:,lli.--i=:iil:~~~,~~,, j:.,. . . . ,.~.,..,,,.,,,,,.,,,,,,, :.:........ ..,:..... ....M.:.:::.. . . .: ....v.. 

.:,.,., .,.F. .::::.:.: .:,.,:, . ;, ,:.:::$.::.. : .:..:..:...:.::...: :::,.,.: :,:;:,.:.;:I: :(:j:::;:?:\: :,.2; j,.;,::l:li,:,ii:::.:‘~.‘:” j::jjll:jj:ji:j:i,.:... :.i: ...?,::i106 ,, ,.,.)..F,.I:..:.:::j::::~:::: ::.:.:.:.:.:.;;:i:;:\:$;:;.;.:T:::.::::::::::.:::,.‘.. ::...:::.. ::,:j..:::. :.I:: ?:.:.,,.)..~.,. ~:~~~~~~~~~~~~~~~:I.:.,::.::;:;:;:\:i ..:::.: ,.:... :j5y:j,. .:.::I’:: ..:,.,.,:::.::: > ‘j;I,. :;j,:,:,j:.,.,. :,,State Licensure Authorities . .. . .,..:...:, ::...::::‘::::::.;:,$$$ ,,?&I$$;Yj ;:j;.lij::~~li~j,~li:I:lj:l::i:i: :I’:~~;,$+& :.Y::.::::::.:::.::::: :ii:;i’.‘i~~~~~:~~~~:~~~~~~~~~~,:~~~::”’~ j:jj:;.jyiil:~li:,j:iji:l~~:~ ,.:,,,:,: ::::::::.:. .:...:,:..:.:.,/.).::.:.: g.);: .::. :.,~:.:..., ..,,,.,., .,., .,..,.... ,. . ..,.,.,.. . . ..:... 

Prosecutor ,:,, .:.:. .c):::.::::.~. .;:, ,,1: ,,,,,, :..;.::,:,;:.:,.: .. ,:.;,::.;...:::, :.,,,:::y :.,::,.q;; ::.,,,,.j,,. ,.. .:.:.,.,...,. .j .:::.::: ::.:,.:.,.:. . ::,:.y.....:, . .. .0:;.:..::.:. .. ...,. :. ,.:.,.:.:. (...(..........,., :::::::.::.:.:.. :,:,:: ,::,., :.:..:.: ‘,..:,:::,‘::,:,:, ~:‘~~~i~~~~~~~~~~l:.:ii::i.iiiiai..ii;.j~;.’:l::~~~1”.ii:i.::i:.‘-::iii.,, .:;$~;::;$j:;:;j ..:,:. .:::.. .,.:.::...:.:.:..:. ~, :.::::.: :...A::: : 

ii::;.I.:::.~:‘:~ji.iii~~~‘j’: :.::‘,.:;;g:i::i 

.:. :... :j .:.j 

,. 

;,.21 

.: 

;: .> ,.: . . . :.........,...... ,:i:l:.~~:i:.- illl,.‘:iii;ii.il.i’;;ii;:~1.-I..,;,:;gfg: ,.,:.,.:.:....:..>, ,.,.,,.,.....,. ... 

Provider 88 

.::.:.,.: .,... :.:.j,.:.:.: . :.. :::::j.:::: .:yj i;l:::iii;:i .‘.::::.::..:..:jjj::..:..::.:,,;,:: :., :.>;;: ::::.:g; .:.‘:~:.;:$:::,.: ,). ..:.::,::.;:,. ..:... ,,,,,.;.i......A.. ::g;: ““”‘;:‘:::‘:. . ., .:.\./...... :.:;::;;:: .:f..;;;;;;;j;:$ ~~~~~~~~~~~~~~~~~~~,~:~~j:i:ij$:.y .,<;;,;:jy, j:.::.: ‘I:. 

!:.::I;.I.;;;;:j -ii:‘i:::~ii-i:I.:::, i:jj_:j:.:j‘ij:;(::: :

j :\::‘: ,.:::; ..:.::: .::, j :;:Ijig-;:;. yTJg$..~~~~.:‘:“~:‘::,: 

: j .y‘.::,::,,j:: ..‘..‘.A’ 

j:,,;.::::j: i,ljij);:;, ., .:..:.. 

.:.:.,.. :.I;;;:,. Private Citizen . . : ..,.,.. . . ‘..: j:;..“.,::j,j.: .,,:,:,: :.:j:~z:,:‘,. .;:.::,.:j;:,,y. ::.:: 1,062 

ii:;~~:~.;;;<;::. 

.::..A.. ,:::j;i;..:: :‘.j .:.::.>::.,.:, .‘. ::j ..: :I::.:

:~, 

.: ~~~~~~~~~~~~ii: j7‘:::;:;I;;j-;.fi-i_:~:i.;::lii:::-:il-~~~~~ ~~~~i::i::ilii’-;::“: ::‘1:~-,,;-i:iii-i’:.~~~.~~i:,:;ii:l~;::liji:;l::i~:_:j(~:, : :, ,.,. :,.:::.:/;,;j).:il:j~ 2.‘.::j:.:.:.: . . ..: ,I”“IJ’:‘i: .,j::,:,,:...:,.j::#jc: 

State Agency 375

,.,.j,.,.,.,...,... ::.j::,::; ...... . .. :j.))..):.:.:.:...:.,.j: ..; :.::.y:;:. :,j i:y.,.:;:::.::::.::.,:::::..:::: 1..,.+ :: : : I.. .’ :..,::.:::..: ..... : ::::::.:. 

..:........,,:.:. ::.:.:.: .:.:.:.:.: ~.:,..:,::,,:.)..:. ...x..:.::::: .,..,.,../:::.:: 5:ii.:;;;ii’ii:B: :..:: ;:::::.:‘I‘:“.‘..r:,:,;,::.;.:~,:,:.):..... . :,.: ,;:: .::~:>:.:::::.;,f,: ::I’:i:i::jjj:i:ljj~,:~~~~~~~,,~:~:.~~ .,.,..: . .. ...> ..,.: ,.,: .,j.:I:. :::.y:::;: :::.: ‘. . :..,.,.. ‘..“’..

””””

..

”

.

““.‘.‘.‘i.‘.‘.‘.‘..,...... .:: ::,:,:..,., :1::.:,.,,, .:.:.:.:...:.:. ,..,::,:g .,,‘,,.~(~,.~:;:::. ::.:,,‘:::. ::.,.;.y:::‘::..:::.j::,j:::j, 

,>::.: ~~~~~~s~~~~~~~~~~~~~::i ;;j$g$ii:~~j,~:~~::, :;::::: :15ii’lii’;“‘i;::~.~~~~~~~~~~~~~~::,~.:::. ::j:l:lj:j~iii;.;.iii : .:::...,.,...,....:...‘.::lii~~~~~~ii::lilili:j:ij,~~~~~~~~ jl;:i~~~~~~~~:~~~j:;::,; ,.:..::.::,.:.)>~:., . .. ...,. ...,.:. ... 

Other ::::::: ::::::::::::::.:::::.::: .,.. ., :,:, .. .,..,..... 979 :(.:.:...):.):.:::::::::::.~~ ...A’................... ,\.,:,... ~:,:.:.:,:.:::.:::::::: ./j,.,.,.,.,.,.,...,....,. . . i, :,. ., ::::... .. . .:.:. :::.:I.i:I:i:i:l:i:i:::i:ii:,:,l;i:i::ilii::.. ...,.,.,.,.....,., .; .’.:j::.,:(::,::::.::::::.j:::~, ~~~~~~~.~~-si!l:III~~~~~~~~~~~~~:_ij;~:i-_-l;ii::i~~~;3:i-:~~~~~~~~~~~~~~~ .;..:: 

;:.:,:.:.:,.::.:.:.:.:.: .,.,.: ,.j,...j,./....,.................,....................... 

Single State Agency Referrals as a percentage of total MECU workloadz2 24.6% 

’ This is a summary of referral sources for the 45 States which had MFCUs in 

CY 1995. 

2 This is S/URS and Single State Agency (Other) referrals as compared to Total 

referrals. 

B-l 
. . . . . . . . . 

:j.,:;:. . . ,: 

..:.I.:.: . . . . . . . ..::,::;:;::>y . ,;;< . . :.:.: ,. 

. . . . . . . . . . 1; .:;I . . . . . . . . . . . . . . . . . 

.:.. ..::,:,: :.;. ..:.:I ,:;: . 

. . . 

..:::.::::, . . . . . . . . . . . . . :.... . . . . . . . . . . . . . . . . ,.,. . . . . . . . 

::::::.:.: 1: . . . . . . . . . . . ,.,., . . :,. 

. . . . . . . . 

. . . . . . . . . . . . . . . . . . . . . . . . . ::.: .:. .,.: .a. ,:.:,: . . . ,.,.,.,. . . . . . :..::: 

. . . . . . . . . . . . . . :. . . 

.;::::.::::::::.:.:::;:. ;:;:;::::: .:., ..:::: ,,,,,::::::: :.:.: . . .,..: 

. . . 

.,:::::‘:.:.;.:..: . . . ,~i::i:iilil’il;-i’.:ii.:~~:3:1:,,::1:111 ::..::::. .:.::: .:.:. .::. 

APPENDIX C 

MFCU Sources-Sample States’ 

Fraud Case Referrals 

CY 1994 

Referral Source MA MINMTN UT VA WA Total 

.;::,:::::.c: :;:i.:::. .j !:~_:I~~~,::i~~ . .: .. . . :.&:: .y ,.~~~~~~~~~~:.~~~,:~~~~~) ..,;; ;; ;;i2 ::I:. g$& (:I..; ,;;gg;:..: i’:;;:& i:‘::.;i.~;:,:,;,$ :.,:.;:& . . ,, ., . 

Single State Agency (Other) 0 3 5 ::I::‘:?:.,. .:,; ::.:.:.,- :::::.:, :::.:.:r ;,;;:$:.,. .‘:‘;j:;!:, ”::,,;;cI-;. 

0 16 ,::c.,:j:.:.‘;::I..0 .,I,::;.:ji;::..: ..::,;;:.. 1.:22 46 

.:.,.,y.:. ..:.:..:::. ,,‘..:+‘,., : ::*;; .i:-~~~ii~~~~~~~~~~a~~~:~~~,~~~,:,,.::.:..::.:i;;&.I .’:ii:;;,i,:1:‘;,.+o, .Y!:i”jfi::‘3: . .;.:.:,..‘..:.,.::;,:.:::,j .“..’.‘.,I,“.:.‘.. ‘.:.:...: 

:::,;;_I;,;:: 

: 

::i:jq ,&-jy.:...~~~$&~ :j:j:$y:Yi;, j: ;, : is 

State Licensure Authorities 1 0 0 1 0 0 0 2 j,,‘::z;;;i,y;.. ‘:: ‘. ,..::. .:>: ,,,,,jj:,,:.:..::.: 

.jj:gj$g :.::I~i::“:j;i :~j$f;:y;:[. .:::: -‘ScF ;’::,:i:i:::‘i’:: :,.:::.+ .:. :;,Ii.:+:qF;i ;,:;:,::‘i:::~:i: : ,,,’:... ..++.:.: I_.;:,.:.: ..: .. ‘.::.:.... .:.: :y....,,.,.,.,,.,.,, :;;,;<;: :-,j::::,. :.,,: j :, .,:ii:-.;:.. ...‘I:,:,,..:.‘:-:.::; ,,: .T.‘. ,;L”;‘i;$y;: :‘::‘i:::. “.:;-:; ;:.;;;g .‘.: :..:. .,:,,.: :.:):: lili:~~~~~~~~~~~~~~~~,~~~ :;.‘:::‘:‘ii:iio:ili;::I:i.i:i;:l: .:: ::jj :g&::$ .I.:jqg:i;;.,:::l’i::;liii’:: : ..:...:.,. ... .,,.. .:. . . . .. .. .. : .. .;;::;:;~;:;:ji~., .: .,,, . ..: . ,...,., .(: j::: .;;2 :. .. .: 

Prosecutor

:::.:.: j ,: ..I:.0..:.,. ....i 0 0 1 0 0 3 

j:gg 

4

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::.‘,::,.:.:..:., :..,., .:..:. :.....:,:.,:.: .; .:.:.,,...... ,,,, ,:,..:.,..,,,.,,., ,. ..:.,....., . ,.,,.,..,

Provider 0 0 4 4 1 0 12

:,.: ::..::‘::yj..:;:?‘..:.). :./...3:: :..::;;j:j: .,:::..:..j,: .::i.: ‘, ..:’ :....I.:‘jy:j ,j.,,), .,.,$:.j:. ::i:Il’:l:ii:;:‘iolii, :jjj:-:iI;:.I::io,:t.:-i ;:i;-J& ..>: .,’ . ::.: .:‘.:.::::,:.. ... .” ..., :I::,‘... ;:j$i:.:::T-:y;i’o ,,.::.::$i’..,.:::: ..:. 

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I:: 

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3 

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Private Citizen 

.:.... :x:::‘: ,.:.,. . ;.. ‘:. ,.:. 

49 :j::13 25 .,,,,.,.,.,,.,.,...,j:j::.‘.:‘,,.:jj:? .,..j:,,., :I ,,., ‘:. .ji:::j:::j:..26 

,:..:..:..I:.:..:::.:.: ,.:.:..~jj 

1 ,).: ,.....:.,. .y, :..j: ,. .’:.>, ::,:::::,,:::::::I::,:,:::::::,.,: .“.‘...‘,.’ ::j.:,: ;::j::;. 

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3 219 

,;y:: :,:::,:;:s::.: :.;,.:.:x::: .:1:: :,.. :.,j 1.. 

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336 .,.,.,.,.,.,,:.: . ..‘.:. ::;‘J:;!$iI;::::i:o.i:::..i::-:I:,~:;r .... .I.::j~~~~~~~~~~~~ ,. .:.j::.:..,:,:...:.:.. >,.... ::ij&$ j&j ‘;::j):,< ,, ,.:..:.:.:.:..:. ,.3.:..) ,,., .,,,.,..... ,.,.,...,,..,.... :., :.:.:.,.:.... ;....,,.::,..:.,.:.., :...:.j. :y, . ,,.,,.. :,... .:

..::..:.,:..’ ,,@:j’: ~,;ii$Qi’:‘; ., 

State Agency:.::. .,.: :j.,. :::: . . ..: .:y:,,,: ::,:,,,:, ..,::,:,..:;: :,,:;..:. ::J..::.:,..: 25 12 52: 1 1 5 96 

;:\:I:::i::.I ,: .: ....))....:,.:,.,.,. 

. .

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0 

::: k..:.::..:.:.,.:y:. ,.;... :. 

:.:.:.: :..:..: ?:li~~~~~~iilI::l::ii.l-ii;:.-‘:,:.. ;;~~:,~::::~:::_..:::j:.:: ”.i;::;:i,.i;:ig)-I:j:, ,:,~I:i:;:::..:~~6.1”~~i:~i”~~;;i:~~:i::~::i:i:::::i:~~~.,~i;,:i:‘-li::~~~.::?ii:i:ii,i~I:’.~_-j-~‘b

::::.. .,.. ...:: ..,,.:.:.:...:.,.. ,;. ,,:I $i;;@: ..;~:.:.,::.:.:::.:::::.:.:::.::., ._,.,. :.:.:...:., :.... :.>: ,... .:.: . .:,.:..).. ,.:,..:.::. ,,., . :...F,.: .,.::.. ..: ,..:.,:., >,,: .,.,, . :....~,..::...... ....:.y...>

Other ..::.:::.:: ::;:j,.,\j c,:c :;:.i:::: .::.j:.,::. ::y.::::.:::.:.:j:j, 6 4 403 ..:::j;..,..:..::: :\:../ 13 366 

:..,.:.;.j;.......:..:.:1,. ::::,:::,:..::.:.::::.,.i:~~,l.l::.,:;Ij-ii:i:iii~:,,:,::,

: . :::, . .:.:::.:.):,::::::::.j:,:.: jj..;.1...:.:...:..jj:.:,: .:,,.:,:,:.,;,:j:’ .,:..:.:.:.: ,;li.:~~~~.:....ii-lr:::..i; :yj::;:,:.. ,.’. .j::i/. ::.:2

.:::::,.:j:.,. 

8 

.,..,:. 4 ‘:;jj:,;,‘,I::;,;$ .,::.;.,.A::j::.::II:y:.::.:;:i. :,:.,.::).:.j:/.::: ::.j::,.. iii~:i::j;:i”ji:i-II:,I~~i.;l::~:~~~ ,,:; :::..:. . ...:: .,:),.;.I:.‘: 

:,:, ::: .,.: :.::,::..::::::::... :.;..::::.. ::.::..:,.. :::::: ::.;i.. ‘,:,,,::: ~ii~~~~~;~~,~~~~~~:j:i:‘:i::,:~~,:::::i:’iil:’ j:jj,~j$@Jg,,. ..,:‘:.:+,,:.\:“‘,‘::.::.::i’:‘::,:i:. .>,:‘:..:: -.::‘:::‘:‘:.‘. .:: ,..‘.::..:::.:.,:.:.,:/.,., :,:.:.. j:;:l;i{::::.:.. ;-:. :I:: ..:.:‘:‘. ::::::::::.::.:.:.:.: :,,,,..,. .:.:‘,:,‘:: ,‘,‘,.j.>:.:.:.:.:.:.::t 

Single State Agenq Referrals as a percentage of total MFCU workload? 23.7% 

’ This is a summary of referral sources for the 7 sample States used in this study. 

2 This is S/URS and Single State Agency (Other) referrals as compared to Total 

referrals. 

C-l 
APPENDIX D 

AGENCY COMMENTS 

D-l 
DEPARTMENT OF HEALTH &HUMAN SERVICES Hc:lth Care Financing Administration 

The Administrator 

Washlngton, D.C. 20201 

DATE: SEP26 I996 

TO: JuneGibbs Brown 

InspectorGeneral 

SUBJECT; Office of InspectorGeneral(OIG) DrafkReportEntitled: %xrveiJl.anceand 

Utilizatio~ReviewSubsysten~~‘(SNRS)CaseRefkmls to Medicaid Fraud 

Control units (MFCUsx” (OEII-07-95-00030) 

We reviewedthe above-referencedreport concerningMedicaid fraud andabuse/neglect 

casesasit pertainsto the SltJRS. The report discussesspecificktors which contxibnte 

to and work againstsuccessfulprogramintegrity operations. 

Our detailedcommmts areattachedfor your consideration.Thankyou for the 

opportunity to review and commenton this report, Pleasecontactusifyou would like to 

discussour commc?nts. 

Attachment 

D-2 
HCFA should convenea MedicareandMedicaid fraud andabusetaskforceto plan and 

implementimprovementsin f?audunit operations, This would include: . 

0 Clarifying goalsandobjectivesfor programintegrie efforts. 

0 Establishing~guidelinesfor.developjngsuqxcted fraud cases. 

0 Developinga universalprotocol f6r appropriatelyreferxing&and andabuseoases. 

Q Coordinatingdatasystemsto ensurethat dataarereliable andconsistentacross all 

entitiesin the fraud andabuse@hung network 

0 Developinga training programdesignedto educateprogramintegrity personnelon 

procedures,casereferralsandbestpractices. 

We concur. HCFA establishedthe ProgramIntegrity Group(PIG) to addressfi-audand 

abuseissueswithin the MedicaNMedioare programs,The goalsof this groupare 

consistentwith the reportrecommendations.The group’s overallresponsibilitiesinclude 

completingandmonitoringthe activities of short andlong termprojects,suchas, 

changingthe conditionsof participationfor home healthagencies,developinga strategic 

plan with our law enforcementpartners,clarifying programintegrity languagecontracts, 

and deters&ing how to betterusedatato reducewaste,f%ud, andabase.In adclitiq 

HCFA is working to addressissuescxxnmonto both programs, For example,Medicaid 

SurveillanceandUtilization Review SubsystemsUnits are (or areplannedto be) usersof 

the recently developedFraudInvestigationdatabase.The databaseensuresthat 

infonmlion on casesdevelopedby Medicare carriersis sharedacrossa numberof 

pro@.. andlaw enforoementorganizatidns, Inputting fraud castsdevelopedby the 

Medicaid programwould allow tracking both Medicare/Medicaidfraud caseson the same 

system 

D-3 
Page2 

The OIG suggeststhat thereis a needto deveIopstandardguidelinesfor the dcveropment 

andreferral of fraud cases;howevex,the OIG hasalreadydevelopedsuchguidelines. 

NCFA has providedthesegu.ideIinesfor casedevelopmentandreferral to the carrier 

&aud units andcontractors. We cnconragethe useof theseOIG guidelinesby the states. 

OIG Recommendation 

HCFA shoulddevelopandimplune~~ta comprehensiveevaluationsystemfor S#RS case 

identG&i~ developmentandactivities. 

HCFA Resnonse 

We concur. HCFA agreeswith the recommendationto considerdevelopinga 

comprehensiveevaluationsystemfor WRS caseidenfifkation, developmentandreferral 

activities. However,Medicaid’s Fraud and Abuseinitiative’is a new one and doesnot 

havethe resourcescmently tc pursuebuilding a comprehensiveevaluationsystem, 

D-4