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DEPARTMENT OF HEALTH & HUMAN SERVICES Office of Inspector General

Washington, D.C. 20201

AUG - 5 2008

TO: David Frank

Director, Medicaid Integrity Program

Centers for Medicare & Medicaid Services

FROM: šf~art Wright

(~/~~

Deputy Inspector General for Evaluation and Inspections

SUBJECT: Memorandum Report: State Medicaid Agency Referrals to the Offce of

Inspector General Exclusions Program, OEI-OI-06-00301

This memorandum report presents the findings of our recent work to determine the extent

to which final actions taken by State Medicaid Agencies in 2004 and 2005 were received

by the Offce ofInspector General (OIG). OIG's exclusions program relies in part on

referrals of individuals and entities (hereafter referred to as providers) sanctioned by State

Medicaid agencies. We hope that you find this information usefuL.

BACKGROUND

Section 1 128(b)(5) of the Social Security Act (the Act) specifies that providers who are

suspended or excluded from paricipation or otherwise sanctioned for reasons bearing on

professional competence, professional performance, or financial integrity (hereafter

referred to as final actions) by State Medicaid agencies are subject to a permissive

exclusion by OIG. When State Medicaid agencies take final actions against providers,

they are required to promptly report the providers to OIG. i Furthermore, State Medicaid

agencies must notify OIG whenever State or local cours convict providers of offenses

related to participation in the Medicaid program, unless the Medicaid Fraud Control Unit

(MFCU) has already done SO.2

State Medicaid agencies and other entities, such as MFCUs and State licensure boards,

refer providers with final actions to OIG. Upon receiving a referral, OIG staff enter

biographical information on the provider into a database (hereafter referred to as the

exclusions database), which may include the provider's name, address, tax identification

num ber, date of birth (for individuals), type of provider/business, and the source of the

referraL. OIG staff then review the referral to determine whether to pursue an exclusion

case based on the Federal criteria for exclusion. When OIG excludes a provider, it sends

i Social Security Act § 1902(a)(41) and 42 CFR § l002.3(b)(3).

242 CFR § 1002.230.

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program
 

 

 

Page 2 – David Frank 

a notification letter to the Medicaid agency in the State in which the excluded provider 

resides. In some instances, OIG notifies additional States if the provider is believed to be 

licensed or doing business outside of the State in which he or she resides. OIG also 

maintains the List of Excluded Individuals/Entities (LEIE), a publicly accessible database 

available on the OIG Web site, which contains information on all providers currently 

excluded. OIG updates the LEIE on a monthly basis. 

In addition, staff from OIG conduct outreach to the agencies that refer providers with 

final actions. This outreach typically fosters relationships with the referring agencies and 

informs them about OIG’s exclusion authorities. 

METHODOLOGY 

Our review matched data from the exclusions database with information on providers 

with final actions taken by State Medicaid agencies in 2004 and 2005. In addition, we 

surveyed State Medicaid agency officials. From November 2006 to April 2007, we sent 

our request for data (outlined further in the next section) and our survey to the directors 

of the Medicaid agencies in the 50 States and the District of Columbia (hereafter referred 

to as States). We requested that both the data request and the survey be completed by the 

director or a designee knowledgeable about provider enrollment/disenrollment who can 

provide the State’s perspective. We received 44 responses to the data request, for a 

response rate of 86 percent. We received 47 responses to the survey, for a response rate 

of 92 percent. 

Match of Providers With Final Actions to the Exclusions Database 

We requested that State Medicaid agencies submit information on all providers with final 

actions taken between January 1, 2004, and December 31, 2005, that should be referred 

to OIG under section 1128(b)(5) of the Act and 42 CFR § 1001.601.3 Requested 

information included the provider’s name, address, tax identification number, type of 

profession/business, date of birth (for individuals), type of action taken against the 

provider, and date of the action. Where appropriate, we contacted State Medicaid 

agencies and OIG’s exclusions staff to clarify the types of final actions we received. 

We matched the State data with data from the exclusions database entered on or after 

January 1, 2002. Our date range for the data from the exclusions database preceded the 

date range of the State data because other agencies may have referred a provider to OIG 

before a State Medicaid agency took a final action against the provider. We counted a 

provider sent by State Medicaid agencies as a match when the provider’s name and 

3 We further defined these final actions in the data request as program suspensions, program exclusions, 

other actions that limit the ability of an individual or entity/business to participate in a State Medicaid 

program regardless of what such an action is called and situations in which an individual or entity/business 

voluntarily withdraws from a State’s Medicaid program to avoid a formal sanction. 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
 

Page 3 – David Frank 

designated OIG region matched the exclusions database.4 Where appropriate, we also 

used one or more of the following variables: tax identification number, date of birth, and 

city and State. Finally, we also visually reviewed certain provider records to verify close 

matches (such as transposed digits). Attachment A provides a breakdown of respondents 

by State with their match rates. 

Survey of State Medicaid Agencies 

Our survey collected data on agency staff who make referrals, OIG communication with 

State Medicaid agencies about referring providers with final actions, and barriers to 

referrals. It included open-ended questions on factors that impede referrals and 

additional outreach desired by the States. Before sending the survey, we solicited 

comments about the survey’s content from OIG staff who work with the exclusions 

program. We incorporated their input in the final survey. 

Limitations 

The findings presented are based on self-reported data that we received from State 

Medicaid agencies. We did not independently verify the accuracy of the information we 

received on providers with final actions, nor did we verify whether we received a 

complete list of providers with final actions taken during our timeframe. 

Standards 

We conducted this study in accordance with the “Quality Standards for Inspections” 

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

on Integrity and Efficiency. 

RESULTS 

About Two-Thirds of Providers With Final Actions Imposed by State Medicaid 

Agencies in 2004 and 2005 Were Not Found in the Exclusions Database 

State Medicaid agencies reported taking 4,319 final actions against providers in 2004 and 

2005. Of these, 61 percent were not found in the exclusions database. See Figure 1 on 

page 4 for a breakdown of the results of the match. 

4

 States are assigned to regional offices operated by OIG. 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
 

 

 

 

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Figure 1: Results of match of providers with final actions from
 

State Medicaid agencies in 2004–2005 to the exclusions database*
 

Providers for 

0.8% Providers who 

matched with Providers who 

the exclusions are not in the 

database exclusions 

38.6% database. No 

match exists 

using the name 

and the region 

60.6% 

N=4,319 providers with final actions 

whom a match 

cannot be 

determined 

* See Methodology section for the definition of the types of matches. 

Source: OIG analysis of data from State Medicaid agencies and the exclusions database, 2007–2008. 

Match Rates Varied Widely Across States 

Eleven States had a match rate of less than 25 percent, while 9 States had a match rate 

greater than 75 percent. The match rates of the States ranged from 0 to 100 percent, with 

a median rate of 43 percent.5

 About half of the States with a low match rate took few 

final actions against providers. Of the 11 States with match rates of 25 percent or less, 

6 States took final actions against fewer than 10 providers, with 4 of these States taking 

action against 2 or fewer providers (see Attachment A for match rates by State). 

The eight States that took final actions against more than 100 providers had a slightly 

higher median match rate of 48 percent, yet these States still had a large variation in their 

match rates. Alabama, Louisiana, and Texas had the highest match rates of these eight 

States, with rates of 94 percent, 85 percent, and 81 percent, respectively. However, the 

two States that took final actions against the largest number of providers, New York and 

Florida, had two of the lowest match rates: 21 percent and 9 percent, respectively. 

We found no general patterns either from the data match or from the match results and 

responses to our survey. For instance, although 34 out of the 47 Medicaid agency 

officials reported that they have an identified point of contact within OIG for questions 

concerning referrals, we found no consistency between States having both a high match 

5 Although we received responses to our data request from 44 States, our match rate includes only the 

38 States that reported taking one or more final actions against providers in 2004 and 2005. 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
Page 5 – David Frank 

rate and an OIG point of contact. Furthermore, we found no association between those 

States that cited barriers to reporting final actions and low match rates. Finally, we also 

found no consistency between the number of providers with final actions sent by States 

and their match rates. 

Officials from State Medicaid agencies conveyed uncertainty about the types of 

information to send with referrals, the types of final actions to refer to OIG, and the 

outcome of the referrals that they make. We asked State Medicaid agency officials about 

factors that may present barriers to referring providers with final actions to OIG. 

Officials from 22 out of 47 State Medicaid agencies cited unclear guidance and 

instructions from OIG regarding the documentation to send with referrals as a barrier. As 

stated by one State Medicaid official, “If a referral is made, we don’t know the 

documentation requirements.” Additionally, about half of State Medicaid officials 

indicated that they would like to have additional guidance about the referral process. As 

one State Medicaid official responded, “It would be handy to have a little ‘cheat sheet’ 

that clearly stated ‘refer these cases’ ‘with this info.’” 

Moreover, officials from 19 out of 47 State Medicaid agencies cited uncertainty about the 

final actions that need to be referred to OIG as a barrier. Some of these officials were 

unsure which actions taken by the State Medicaid agency are required to be referred to 

OIG. Six State Medicaid officials commented that they were unaware that they were 

supposed to report final actions to OIG. According to one State Medicaid agency 

official, “The agency has not referred actions to OIG as we did not believe our process 

met OIG’s definition of a termination.” 

Furthermore, State officials reported that they receive little feedback on the providers 

with final actions that they refer to OIG. Of the 47 State Medicaid agencies, 12 officials 

reported that OIG informs the agency of the outcome of the provider referral “a little of 

the time” or “never,” and 19 reported “don’t know.” Just five States reported receiving 

this information “all of the time.” As previously mentioned, information on providers 

excluded by OIG is available to States. When OIG excludes a provider, it sends a 

notification letter to the Medicaid agency in the State in which the excluded provider 

resides. In some instances, OIG notifies additional States if the provider is believed to be 

licensed or doing business outside of the State in which he or she resides. It also adds the 

provider to the LEIE. OIG does not provide written notice on referrals on which it takes 

no action. 

Despite the barriers, State Medicaid agencies rate recent outreach from OIG as helpful 

and would welcome more information about exclusions processes. On our survey, 16 out 

of 47 State Medicaid officials reported that OIG provided them with information 

concerning the Federal exclusions program in the past 2 years. In most cases, this 

information covered Federal exclusion authorities, the effect of Federal exclusions, and 

when to refer a provider to OIG. Furthermore, about half of the State Medicaid officials 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
 

Page 6 – David Frank 

reported that the agency had discussions in the past 2 years with OIG concerning referrals 

of providers with final actions. All of the States that had these discussions reported that 

the information they received was helpful. 

In addition, several officials whose agencies received outreach commented positively on 

their working relationships with OIG. One official commented that “The current 

relationship between the State Medicaid agency and the OIG is very positive. 

Communication between the OIG and the State Medicaid agency is frequent and useful 

regarding the exclusion of providers.” 

State Medicaid officials who neither received information nor had discussions with OIG 

concerning exclusions provided several suggestions for the kind of outreach that they 

would like to receive. These ideas include providing a detailed explanation of State 

agency obligations, written instructions on documentation to send, and contact 

information for OIG exclusions staff. Other suggestions included formalized training for 

State Medicaid agency staff, as well as information on how to discuss the exclusions 

program with providers. Additionally, two officials reported that the information about 

exclusions should be provided to the States’ Offices of Inspector General and not to the 

Medicaid agency. 

Officials from most State Medicaid agencies that had either low match rates or that were 

unable to supply data for this study expressed interest in working more closely with OIG 

regarding referrals. One official noted that the Medicaid agency “will better 

communicate with our investigative partners to collect the necessary documents in 

support of the convictions to substantiate our claim for both provider termination from 

the Medicaid program and notification to your office.” Another official commented that 

“The agency is committed to assisting in the identification and reporting of providers 

who are excluded from participation in State and Federal Health Care programs. We 

look forward to receiving additional information on the mechanisms we should employ to 

assist the OIG.” Finally, one State official reported that by responding to our study, it 

became apparent to the agency that “no coordinated effort existed . . . to make referrals.” 

In response, the agency recently established an interdepartmental memorandum of 

understanding to “outline all of the functions touching fraud and abuse including the 

process to make referrals up to the Federal OIG.” 

CONCLUSION 

Our results show that opportunities exist for both OIG and State Medicaid agencies to 

increase the number of referrals of providers with final actions. Just one-third of the 

providers with final actions taken by State Medicaid agencies in 2004 and 2005 were 

found in the exclusions database. Additionally, officials from State Medicaid agencies 

reported uncertainty about referral procedures. It is likely that increased outreach by OIG 

to State Medicaid agencies to provide information about these procedures would be 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
Page 7 – David Frank 

beneficial. Moreover, increasing outreach could foster improved working relationships 

between OIG and State Medicaid agencies, increase the number of referrals from State 

Medicaid agencies, and strengthen OIG’s ability to identify potential fraud through State 

Medicaid agencies. 

This report is being issued directly in final form because it contains no recommendations. 

If you have comments or questions about this report, please provide them within 60 days. 

Please refer to report number OEI-01-06-00301 in all correspondence. 

ATTACHMENT 

Match Rates of Final Action Data and the Exclusions Database Data by State 

cc: State Medicaid Directors 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program 
 

 

Page 8 – David Frank 

Attachment: Match Rates of Final Action Data and the Exclusions Database by State 

State 

Number of 

providers that 

matched the 

exclusions 

database 

Percentage of 

providers that 

matched the 

exclusions 

database 

Number of 

providers that 

did not match 

the exclusions 

database 

Percentage of 

providers 

that did not 

match the 

exclusions 

database 

Number of 

providers for 

which we 

could not 

determine a 

match 

Percentage of 

providers for 

which we 

could not 

determine a 

match 

Total number of 

providers with 

final actions 

collected for 

this evaluation 

Alabama 161 93.6% 11 6.4% 0 0.0% 172 

Alaska1 — — — — — — — 

Arizona2 — — — — — — — 

Arkansas 0 0.0% 2 100.0% 0 0.0% 2 

California3 — — — — — — — 

Colorado 10 33.3% 20 66.7% 0 0.0% 30 

Connecticut 4 30.8% 8 61.5% 1 7.7% 13 

Delaware 1 50.0% 1 50.0% 0 0.0% 2 

District of Columbia 2 10.5% 16 84.2% 1 5.3% 19 

Florida 75 8.7% 786 91.0% 3 0.4% 864 

Georgia 14 51.9% 13 48.1% 0 0.0% 27 

Hawaii4

 — — — — — — — 

Idaho 16 84.2% 3 15.8% 0 0.0% 19 

Illinois 24 47.1% 26 51.0% 1 2.0% 51 

Indiana 10 40.0% 15 60.0% 0 0.0% 25 

Iowa 11 26.2% 29 69.1% 2 4.8% 42 

Kansas 4 33.3% 8 66.7% 0 0.0% 12 

Kentucky 45 56.3% 35 43.8% 0 0.0% 80 

Louisiana 138 85.2% 23 14.2% 1 0.6% 162 

Maine 59 79.7% 14 18.9% 1 1.4% 74 

Maryland 74 54.8% 61 45.2% 0 0.0% 135 

Massachusetts 0 0.0% 2 100.0% 0 0.0% 2 

Michigan3 — — — — — — — 

Minnesota 9 25.7% 26 74.3% 0 0.0% 35 

Mississippi 4 100.0% 0 0.0% 0 0.0% 4 

Missouri 54 62.8% 31 36.1% 1 1.2% 86 

Montana 5 62.5% 3 37.5% 0 0.0% 8 

Nebraska 1 12.5% 7 87.5% 0 0.0% 8 

Nevada 1 16.7% 5 83.3% 0 0.0% 6 

New Hampshire1

 — — — — — — — 

New Jersey 32 68.1% 14 29.8% 1 2.1% 47 

New Mexico1 --- --- --- --- --- --- ---

New York 280 20.8% 1,061 78.7% 7 0.5% 1,348 

North Carolina 20 12.1% 146 88.0% 0 0.0% 166 

North Dakota1 — — — — — — — 

Ohio 73 41.0% 103 57.9% 2 1.1% 178 

Oklahoma 0 0.0% 16 100.0% 0 0.0% 16 

Oregon1

 — — — — — — — 

Pennsylvania 29 90.6% 3 9.4% 0 0.0% 32 

Rhode Island 0 0.0% 1 100.0% 0 0.0% 1 

South Carolina 36 94.7% 2 5.3% 0 0.0% 38 

South Dakota2

 — — — — — — — 

Tennessee3 — — — — — — — 

Texas 438 81.0% 94 17.4% 9 1.7% 541 

Utah 5 83.3% 1 16.7% 0 0.0% 6 

Vermont1

 — — — — — — — 

Virginia 9 39.1% 12 52.2% 2 8.7% 23 

Washington 12 66.7% 6 33.3% 0 0.0% 18 

West Virginia4 — — — — — — — 

Wisconsin 11 44.0% 13 52.0% 1 4.0% 25 

Wyoming 0 0.0% 2 100.0% 0 0.0% 2 

Total 1,667 38.6% 2,619 60.6% 33 0.8% 4,319 

1

 The State Medicaid agency reported taking no final actions against providers in 2004 and 2005. However, the agency completed the survey. 2

 The State Medicaid agency reported that it does not take final actions against providers and thus did not complete the survey or data request. 3

 The State Medicaid agency submitted incomplete data that we were unable to use for our analysis. However, the agency completed the survey. 4

 The State Medicaid agency did not respond to either the survey or the data request. 

OEI-01-06-00301 State Medicaid Agency Referrals to the OIG Exclusions Program