Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

HOTLINE REFERRAL FOllOW-


"RVIQ:S' 

Richard P. Kusserow 

INSPECTOR GENERAL '0 

.(Ii"dm JANUARY 1991 
OFFICE OF INSPECTOR GENERAL 

The mission of the Offce of Inspector General (OIG) is to promote the effciency, 

effectiveness, and integrty of programs in the United States Deparment of Health and Human 

Services (HS). It does this by developing methods to detect and prevent fraud, waste, and 

abuse. Created by statute in 1976, the Office of Inspector General keeps both the Secretar 

and the Congress fully and curently informed about programs or management problems, and 

recommends corrective action. The OIG performs its mission by conducting audits 

investigations, and inspections with approximately 1,400 staf strategically located around the 

countr. 

OFFICE OF EVALUATION AND INSPECTIONS 

This report is produced by the Offce of Evaluation and Inspections (OEI), one of the thee 

major offces within the OIG. The other two are the Office of Audit Services and the Office of 

Investigations. Inspections ar conducted in accordance with professional standards 

developed by OEI. These inspections are typically short-term studies designed to determne 

program effectiveness, effciency, and vulnerabilties to fraud or abuse. 

This report, entitled "Hotline Referral Follow- " evaluates the procedures employed by each 

of the Operating Divisions within HHS when processing the Deparent s Hotline referrals 

that do not require a status report back to the Offce of Inspector General. 

This report was prepared under the diection of Bar Steeley, Chief of the Health Care 

Branch in Evaluation and Inspections. Parcipatig in the project were the following people: 

Headquarters 

Thomas A. Noplock Project Leader 

Vicki A. Greene 

Barbara Tedesco 

Cynthia Selby 
HOTLINE REFERRAL FOllOW-


Richard P. Kusserow 

INSPECTOR GENERAL 

OEI-12-90-01060 JANUARY 1991 
EXECUTIVE SUMMARY 

PURPOSE 

The purpose of this study is to evaluate the procedures being employed by each of the 

Operating Divisions (OPDIVs) within the United States Deparment of Health and Human 

Services (DHHS) when processing the Deparent s Hotline referrals that do not require a 

report back to the Office of Inspector General (OIG). 

BACKGROUND 

The Office of Inspector General (OIG) is responsible for conducting and coordinating 

investigative activities related to fraud, waste , abuse, and mismanagement in DHHS programs 

and operations. The OIG manages the DHHS Hotline, which receives complaints and 

allegations of fraud, waste, and abuse. Incoming Hotline cases are reviewed and referred to 

one of the five OPDIVs. 

Pror to August 1989, all Hotline referrals required a memorandum from the OPDIVs be sent 

back to OIG within 60 days explaining actions taken on the case. These referrals are now 

known as LTR-21 cases. Effective August 1 , 1989, OIG adopted a new procedure which no 

longer required OPDIVs to respond back to it on cases in which a follow up does not appear 

to be necessar. These referrals, known as LTR-22 cases, are conveyed to the appropriate 

OPDIVs using the LTR-22 cover letter. The OPDIV is then required to develop the case, take 

any corrective action that they determne to be necessary, and maintain controls on these cases 

so that a post-review of the actions taken can be done in the future. 

We conducted a study to determne what control systems the five OPDIV s have in place to 

handle the LTR-22 cases, and to obtan the status of a sample ofLTR-22 cases referred to 

them durg the first three months of the new procedure. 

FINDINGS 

The Health Care Financing Administration (HCFA) Lacks Controls On LTR-22 Cases. 

Forty-nine percent of HCFA cases could not be located. The HCFA Central Office does not 

require any response from the Regional Offices (ROs) on the cases. There are no standards 

across ROs for handling LTR-22 cases. Some ROs maintain control over the cases referred to 

them while others send them out to the Medicare contractors with no time frame for 

completion or response back to the ROs. The average age of an open case was 166 days, and 

the average length of time before the last action was taken on a case was 106 days. 
Social Security Administration (SSA) Controls Its LTR-22 Cases From Central Office, But 

Lacks Timely Follow-up Procedures On Open Cases. 

The SSA has a system in place to control LTR-22 cases. The SSA Central Offce requires its 

components to respond to them with a final disposition of each case. However, it does not 

follow up on open cases until thee months after a referral is made. The average age of 

open case was 162 days, and the average length of time since any action was taken on a case 

was 101 days. 

The Office Of Human Development Services (OHDS), Public Health Service (PHS), And 

Family Support Administration (FSA) Have Control Systems For LTR-21 Cases. 

While they did not receive any LTR-22 cases durng our study period, OHDS, PHS and FSA 

log in the LTR-21 cases at the Central Offce level, and control is maintaied over the cases 

with due dates. Components respond back to the Central Offices with a wrtten final report. 

RECOMMENDATIONS 

The HCFA Should Institute Controls At Both HCFA Central Offce And At ROS. 

The HCFA Central Offce should control cases sent out to their ROs by requirng them to 

respond within a specific time frame on the disposition of all cases. Central Office should 

develop minimum guidelines for RO handling of Hotlne cases. Guidelines should include 

requirng the ROs to have a uniform minimum set of controls on al cases that they send out to 

the contractors as well as the ones they handle at the Regional Office level, and maintain the 

OIG-issued control number on a log system. 

The SSA Should Adhere To Its System Of Controls. 

The SSA' s system for controllng LTR-22 cases should be fully utiized. Time frames 

established for follow-up should be adhered to and treated as a serious due date for an interim 

or final response from their components. The SSA and its components should record and 

maintan the OIG control number. 

When OHDS, PHS, And FSA Begin To Receive LTR-22 Cases, They Should Maintain 

Them Using The Same Control Systems That Are Currently In Place For LTR-21 Cases. 

OHDS, PHS, and FSA should maintain any LTR-22 cases that they receive under the same 

control system as the LTR-21 cases so that they may track and follow up on them. 

SUMMARY OF COMMENTS 

Four of the five OPDIV s commented on the draft report (the FSA did not offer comments). 

They all concurd with the recommendations. The HCFA plans to develop uniform 

guidelines for the regional offces, and has alady begun to implement procedures requirng 
the regional offces to provide central offce with a status for each case within 45 days of 

receipt. The SSA wil communicate to components the need for timely development and 

response to SSA central offce. Both the PHS and OHDS plan to maintan the cases under the 

same control system now in place for LTR-21 cases so that they may track their resolution and 

implement corrective actions if necessar. 

111 
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TABLE OF CONTENTS 

EXECUTIVE SUMMARY 

INTRODUCTION 

Background. . . 

Methods. 

FI N DI NGS ................................................... 6


Health Care Financing Administration 

Social Security Administration 

Public Health Service,


Family Support Administration and 

Office of Human Development Services. . . 

RECOMMENDATIONS 

COMMENTS. 

APPENDICES 

Appendix A: Methodology and Sample Selection . . . . . . . . . . . . . A -

Appendix B: Tables ...................................... B-


Appendix C: Detailed Processing Procedures. . . . . . . . . . . . . . . . C -

Appendix D: Detailed Comments on the Draft Report. . . . . . . . . . D - 1 
INTRODUCTION 

The purose of this study is to exame the procedures being employed by each of the 

OPDIVs within DHHS when processing the Deparent s Hotline referrals that do not require 

a status report back to OIG. 

The purose is not to perform a qualtative review of the outcome of the Hotline referral cases 

selected for study. It is to review and analyze the procedures and controls in place to track a 

category of cases as they are referred from OIG, to OPDIVs, to Regional Offices (ROs), and 

ultiately to the Medicar contractor or State that wil actually develop or "work" the case. 

The category of cases that are the subject of this inspection are the more tyical or routine

cases that OIG no longer tracks themselves. 

BACKGROUND 

The DHHS is composed of five OPDIVs: 

Offce of Human Development Services 

Public Health Service 

Health Care Financing Admnistrtion 

Social Securty Admnistration 

Famy Support Admnistration 

The OIG is responsible for conducting and coordinatig investigative activities related to 

fraud, waste, abuse, and mismaagement in DHHS programs and operations, includig 

wrongdoing by applicants, grantees, or contractors, or by HHS employees in the performance 

of their offcial duties. 

As par of their official duties, the Offce of Investigations (01) within OIG is responsible for 

managing the DHHS/OIG Hotlne (Hotline). The Hotlne receives complaints and alegations 

of fraud, waste, and abuse from agency employees and the public, and refers the information 

to one of the five DHHS OPDIV s for furer development, investigation, audit, program 

review, or other appropriate action. The OIG cases come in the form of calls and letters to the 

Hotline, as well as referrals from the General Accounting Offce (GAO) Hotline that are 

related to DHHS programs. 

Approximately 100 to 140 calls are received daily in 01 between the hours of 

10:00 a.m. to 4:00 p.m. Approximately 80 percent of al calls are Medicare related, except

durg the fIrst four days of the month when the Social Securty checks come out, durng 

which time 80 percent of all calls ar Social Securty related. Most of the Medicare calls are 

complaits about physician biling, with occasional hospita biling complaits mied in. In 

addition, 01 receives approximately 10 to 12 letters per work day. Most of these letters are 

Medicare related. 
All cases that Hotline operators receive are logged in, assigned an OIG case control number 

and then screened to determne which OPDN should receive the case. (Only a very small 

number of Hotline cases ar handled dictly in 01. For example, highly sensitive employee 

cases may remai internal. 

Pror to August 1 , 1989, 01 reuired the OPDIVs to respond back to them within 60 days on 

all referrals with a memorandum explaining actions taen on the case. Under these 

procedures, all Hotline referrals were held in 01 inventory as open cases until they received a 

fmal disposition on the cases from the OPDIVs. 

Office of Investigation s Change in Procedure 

The 01 has gained much experience though managig the DHHS Hotline. This experience 

has shown that they do not need to receive feeback from the OPDIV s on all Hotline cases. 

In order to help reduce the admnistrative burden, 01 decided not to require the OPDIV to 

respond back to them on cases in which 01 follow up does not appear to be necessar. 

To implement this policy, effective August 1 , 1989, 01 began dividing the incomig Hotline 

cases into non-tyical and routine cases. The non-typical cases are caled LTR-21s, and the 

routine ones are referred to as LTR-22s (so named for the "cover letter-21" or "cover 

letter-22" that transmits the case). This inspection focuses on the LTR-22 cases. 

The 01 applies the following guidelines to determne when to use the LTR-22 cover 

memorandum: 

Use this LTR-22 procedure in typical program fraud cases, such as complaits 

that (1) a Social Securty disabilty beneficiar is gettig payments ilegally 

because of concealed work activity; (2) an SSI recipient is getting benefits despite 

excess resources; (3) an AFC recipient is getting benefits despite support being 

provided by another person; or (4) a doctor biled Medicare for services not 

rendered or commtted an assignment violation. (Most Medicare biling 

complaits we get wil be handled this way. 

Do not use the procedure if the complaint appears to involve (1) an HHS 

employee; (2) a contract or grant; or (3) some other element that may make it 

suitable for tracking to conclusion by the Hotline. 

The OPDIVs must continue to respond to 01 within 60 days on the LTR-21 cases, but do not 

need to reply to OIG Hotline on the LTR-22 cases. Upon referral to the appropriate OPDIVs, 

the LTR-22 Hotline cases ar closed out by 01. However, the OPDIV is still required to 

develop LTR-22 cases and tae any corrctive action that it determnes to be necessar, 

includig referrng the case to an HHS/OIG Offce of Investigations Field Offce (OIFO) if 

evidence of fraud or abuse is found. 
The body of the LTR-22 (which is attached to all routine cases), contans the following instrctions to the OPDIVs: 

If development in accordace with established instrctions discloses substatial 

evidence of a crime, the complait should be referred to the appropriate OIFO. 

The referral should always bear the OIG Hotline complaint number fwhich is the 

unique number attached to each case J as that number is the key to tracking cases 

through our control system. 

Your offce need not reply diectly to the OIG Hotlne on this complaint. It is 

assumed you wil take all actions necessar to resolve the issues, including 

referral to an OIFO, if appropriate. 
 It is important, however, that you maintain 

controls on the case, so that a post-review of the actions taken can be done in the 

(emphasis added). future 

It is the last sentence of OJ's letter to the OPDIVs that contains the inspection issue. Simply 

put, 01 is concerned about how the OPDIVs are handling the LTR-22 cases and whether or 

not there is a system of controls being maintaned. As evident in the letter, 01 assumes that 

the OPDIV wil maintan its own controls on cases, even though they do not need to provide 

01 with furher information about the cases. Additionally, OPDIVs are advised to include the 

OIG control number in their tracking system so that there is always a common varable for 

identifying and reportng on about the case. (See Figure 1 for a diagram of the case flow. 

METHODS 

There was a dual approach to determning what system of controls OPDIV s have for handling 

LTR-22s. One was to conduct a general surey for each of five OPDIVs (and each often ROs 

within HCFA) to determe what elements were contained in their control systems. The other 

was to determne the status of a sample ofLTR-22 cases referred to OPDIVs durng the fIrst 

thee months ofthe LTR-22 procedur. (See Appendix A for Sampling Methodology. 

The series of general, procedural questionnaies began with an interview of 01 officials to 

determne how they refer Hotline cases to OPDIVs. We then interviewed HCFA and SSA 

Central Offce Hotline offcials to obtan detaled descriptions of their procedures for handling 

LTR-22 cases. A similar interview guide was admnistered to FSA, PHS, and OHDS over the 

telephone. 

The sample of LTR-22 cases chosen for our review contaned cases from only HCFA and 

SSA. 

To determe the status of each HCFA case, we provided each Regional Offce with a list of 

Hotline cases that Central Offce sent to the RO durng the three month study period. We then 

conducted a telephone interview with each of the ROs to obtain the status (open, closed, or unkown) of each case. We also asked for the date they received each case, the date the case 

was closed, and the date the last action was taken on the case. 
To determe the status of SSA cases, we performed an on site review of 22 cases in Central 

Office. We collected the same information on each case as we did for HCFA cases. For six of 

SSA cases, Central Offce contacted the component that was handling the case to obtain its 

status and the date the last action was taen. 
TR-22 CASE FLOW


GAO referrals Beneficiary telephone calls Beneficiary letters 

I OIG HOTLINE 

FSA Office OHDS SSA Division HCF A Office PHS Office 

of Family Executive of Internal of Budget of Resource Assistance Secretariat Control Administration Management 

10 Regional 4 Program 1350 District 10 Regional 10 Program Offices Administrations Offices Offices Agencies 

State Contractors 

Welfare 

Offices 
FINDINGS


Health Care Financing Administration (HCFA) Lacks Controls On L TR-22 Cases. 

At each phase in the Hotline referral process when cases are sent from one office to another 

there is lack of follow-up and controL The cases are sent from HCFA Central Office to the 

ROs, and in tur to the Medicare contractors. As wil be explained below, there is a lack of 

control and consistency in procedure at each stage of the process. 

There are no Control Procedures in HCFA Central Office for LTR-22 Hotline Cases Sent 

Out To ROs. 

Once cases are sent out to ROs, HCFA Central Office does not require the ROs to respond 

back to them on the status of the cases. The HCFA Central Office records each case and then 

sends them out to the ROs without requirng any interim or final report. 

Currently a study (begun in December) is being conducted by the Office of Budget 

Administration to determne what type of system should be instituted to track and analyze the 

cases. 

The HCFA was unable to locate almost half of the Hotline cases in the sample. The ROs were 

unable to report the status on 49 percent (81) of the cases in the sample. 

Twenty-nine percent (48) of the cases were still open. 
 The average number of days in 

inventory for open cases was 165. days, and the average number of days since the last action 

was taken on a case was 106 
 (See Table 1). 

TABLE 1 

HCFA Sample of Cases 

Percent Number 

Unable to Locate 49% 

Open 29% 

Closed** 22% 

totals: 100% 166 

*Average number of days in inventory: 165. 

Time since last action taken: 106. 

Average number of days to close a case: 71. 

(See Appendix B) 
There are no Standards in HCFAfor Handling LTR-22 Hotline Cases. 

The HCFA Central Offce does not impose any guidelines on the ROs for handling the hotline 

cases, and is unaware of what procedures ROs have in place for handling and controlling the 

cases. In addition, there are no central policies concerning which cases would be appropriate 

to handle at the RO level and which at the contractor level, which data fields to record, how 

long the ROs should maintan information on the cases, or how often the ROs should require 

status reports from the contractors. 

There is no consistency across ROs in processing OIG Hotline cases. The Hotline referrals 

are handled differently in each of the ten ROs. Each RO independently determines the extent 

and type of control system it wil have for the Hotline cases. Controls var from very firm to 

no controls at al. Some ROs do not keep a record of the cases sent out to the contractors, 

while others maintain a copy of the case file and put time frames on the cases for interim or 

final reports from the contractors. 

Six ROs log the cases in when they receive them. Three ROs do not have a log in system, and 

one logs in only the cases that they work on within the RO. 

In their letter to the OPDIVs, 01 recommends that their case number be recorded for 

identification and tracking of each case. Four of the ROs record the OIO-issued case control 

number in the log. The varables that ROs usualy record (if there is a log-in procedure) are 

(1) beneficiar or complainant name, (2) the date the case was received, and (3) the date the 

case is due for completion. One RO records 16 varables, but not the 01 case number. 

Three of the ROs review each case internally to determne whether to have the contractor 

handle it, or to resolve it within the RO. The other seven ROs automatically send most or all 

cases out to the contractors for development. Cases that are handled at the RO level tend to be 

more routine, such as beneficiar questions about the Explanation of Medicare Benefits 

(EOMB), and cases that do not appear to involve fraud or abuse. 

Seven of the ROs require a final and/or interi response from the contractor; the other three 

almost never receive a report on the cases forwarded to the contractors. In most cases 

responses and updates flow in as the contractor completes the case and/or sends a letter to the 

complaiant, with no specific time by which the contractor must provide the RO with 

information. Only three ROs set a specific time frame for interim and final reports from the 

contractors. Two of these maintain very close contact with the contractors while the case is 

pending. (When contractors report to the RO, they typically send the RO a copy of 

correspondence sent to the original complainant or beneficiar. 

All seven of the ROs that receive information on the final disposition of cases from the 

contractors state that they review the complaint and action taken to determne the 

reasonableness, responsiveness, and thoroughness of the action taken by the contractor. 
Two of the ROs that do not log in the cases still receive final status reports from the 

contractors. However, unless they receive a report from the contractor, these ROs have no 

way of knowing if cases were ever handled, since they do not have a tracking or log in system. 

Most ROs maitain a completed fie on Hotline cases that come though their offce. Eight 

ROs keep copies of the original case from 01 along with any work they have done internally, 

and copies of any information on the case that the contractors send in. The two ROs that do 

not maintain completed fies on Hotline referrals also do not require contractors to provide 

them with updates or final reports. 

None of the ROs seemed to be aware that there was a change in procedure as of August 1 

1989, creating a category of cases that does not require a response back to 01. One RO 

thought that the new procedure was requirng them to begin sending responses to HCFA on 

some cases, and that previously no responses were required. Thus, the ROs were universally 

unaware of the distinction between LTR-21s and LTR-22s, and were unfamiliar with the 

terminology. 

After the difference between the two types of cases was explained to each RO, eight ROs 

reported that they do not handle the two types of cases any differently. The fact that they are 

not handled diferently is not necessarly an indication of the quality of the control system. In 

some ROs, they are all handled with the same tight controls, and in others they are all sent out 

to the contractors without being logged in. 

Cases that are sent outside HCFA' s system or that move from region to region are not 

maintained in RO or Central Office control system. Cases that are sent to "outside agencies 

(such as a State agency) are closed from a RO perspective. The ROs (even those that do 

maintan control systems) that have had cases sent somewhere other than a HCFA contractor 

do not require any update or final response from the agency. Most ROs reported that if cases 

were sent to them erroneously, they send them to the correct RO without notifying Central 

Office. (See Appendix C for a detaled description of HCFA' s procedures. 

Social Security Central Office Maintains A Control System On L TR-22 Cases 

But Lacks Timely Follow-up. 

Most of the Hotline cases that SSA receives are allegations of program fraud involving people 

collecting disabilty who are reported to be working, or are Supplemental Security Income 

(SSI) cases. 

The SSA has a control system. 
 Within SSA, the Division of Internal Control and Security 

(DICS) handles DHHS Hotline referrals. When cases arve from the OIG, they are logged in 

and each case is copied and maintained in a fie. Currently the log-in system is manual, but 

there are plans to automate. An index card is created and filed by beneficiar name (the OIG 

case number is not recorded). 
Initial case development is done centrally on each case before sending it out to one of SSA 

components for further development. (If a Hotline report clearly sets out the facts with 

enough specific information to indicate that fraud is probably involved, DICS immediately 

refers the case to 01.) 

Social Security maintains an open fie on each case referred to components. Components 

have six weeks to respond to Central Office. There are approximately 1 300 Field Offices, 8 

processing centers, and other offices where the case might be referred. 

Although SSA components are given six weeks to respond back to DICS in the transmittal 

memo, Central Offce does notfollow up until about three months after the case is sent to the 

component. 

The average number of days that a Social Securty Hotline case was in inventory was 161.9 

days. The average length of time since any action was taken on the open cases was 100. 

days (see Table 2). 

TABLE 2 

Social Security Hotlne Cases 

Percent Number 

Unable to Locate 

Open 55% 

Closed** 36% 

totals: 100% 

*Average number of days in inventory: 161.9 days 

cases). Time since last action taken: 100.9 days 

cases). Five of the twelve open cases were referred 

directly back to OJ because they involved Social 

Security Number fraud. 

Average number of days to close a case: 38. 

In October 1987, SSA Central Offce developed guidelines to institute standardized handling 

of Hotline cases throughout SSA. The guidelines consist of highly detailed instrctions on 

how DICS and the components should respond to the public and better handle the cases. The 

guidelines also instrct the components how and where to refer cases for criminal 

investigation. 
Except for the fact that the LTR-21s go back to 01 when they are completed, LTR-21s and 

LTR-22s are handled the same by SSA and its components. Components are required to 

respond to Central Office on the final disposition of all cases in wrting, regardless of whether 

SSA has to report back to 01 on the case. 

When a case comes back in, SSA Central Office looks over the file to make sure that all of the 

issues have been handled, and then fies the completed case. It took SSA an average of 38.

days to close the 8 cases that were closed. 

Public Health Service (PHS), Family Support Administration (FSA), And Office 

Of Human Development Services (OHDS) Have Control Systems For L TR- Cases. 

Although there were no LTR-22 cases referred to PHS, FSA, or OHDS during the three month 

study period, they were interviewed to determine how they would handle DHHS Hotline cases 

for which no response back to 01 was required. Therefore, information provided by the these 

three OPDIVs is necessarly based on how the LTR-21 cases (which require a response to 01) 

are handled. Only Central Offices that handle 01 Hotline cases were interviewed; the ROs 

were not contacted in the three OPDIVs that did not receive any of the study cases. (See 

Appendix C for a more detaied description of SSA' s procedures. 

All three OPDWS state that they would handle LTR-22s under the same control system. The 

PHS , OHDS, and FSA log in cases as they arve from 01, require a response back from the 

components within a specified time period, and all record the OIG case number. Each of the 

three OPDIVs report that they would handle the LTR-22 cases under the same control system 

as LTR-21s are handled if/when they begin to receive LTR-22s (see Appendix C for a detailed 

review of each OPDIV' s procedures). 
RECOMMENDATIONS 

The HCFA Should Institute Controls At Both The HCFA Central Office And At ROs. 

The HCFA Central Offce should control cases sent out to their ROs by requirng the ROs to 

respond within a specific time frame on the disposition of all cases. Central Offce should 

develop minimum guidelines for RO handling of Hotline cases. Guidelines should include 

requirng the ROs to have uniform minimum set of controls on all cases whether they are sent 

out to the contractors or handled at the RO level, and maintaining the OIG control number on 

a log system. 

The SSA Should Adhere To Its Systems Of Controls. 

While SSA has an established system in place to control LTR-22 cases, this system should be 

fully utilized. Whatever time frames are used should be adhered to and treated as a serious 

due date for an interim or final response from their components. SSA and its components 

should record and maintain the 01 case number. 

When OHDS, PHS, FSA Begin To Receive LTR-22 Cases, They Should Maintain Them 

Using The Same Control Systems That Are Currently In Place For LTR-21 Cases. 

The three OPDIVs that have not received any LTR-22 cases have control systems for the 

LTR-21 cases. These three OPDIVs should maintai any LTR-22s that they receive under the 

same control system as the LTR-21 cases so that they may track and follow up on them. 
COMMENTS


Of the five Department of Health and Human Services OPDIV s, the Health Care Financing 

Administration, Social Security Admnistration, Public Health Service and Office of Human 

Development Services commented on the draft report. The Famiy Support Administration 

did not provide comments. All commenters expressed support for the findings , and concuITed 

with our recommendations. 

The HCFA plans to develop uniform guidelines for the regional offices, and has already begun 

to implement procedures requirng the regional offices to provide central office with a status 

for each case within 45 days of receipt. The SSA wil communicate to components the need 

for timely development and response to SSA central offce. They wil also send out reminders 

to every component regarding the required timeframes for follow-up. Both the PHS and 

OHDS plan to maintain the cases under the same control system now in place for LTRcases so that they may track their resolution and implement corrective actions if necessary. 

In Appendix D, we present the full text of the OPDIV comments. 
APPENDIX A 

METHODOLOGY AND SAMPLE SELECTION 

The total number of Hotline complaints recorded by 01 durg 1989, while the new LTRprocedure was in effect, is as follows: 

Month Phone Calls Letters 

August 770 357 

September 586 189 

October 799 164 

November 914 139 

December 506 116 

Durig the review period of August through October, 01 made 23 LTR-22 referrals to SSA. 

This total is composed of 5 referrals from GAO, 7 referrals received by telephone, and 11 

referrals received by mai. Since one of the SSA cases was transferred to HCFA, 22 of the 23 

SSA LTR- 22 cases were reviewed on site at SSA Central Offce. 

Durg the review period, 01 made 278 LTR-22 referrals to HCFA. This total is composed of 

3 referrals from GAO, 5 referrals received by telephone and 270 referrals received by mail. 

There were no LTR-22 cases referred to FSA, OHDS , or PHS during the three month review 

period. 

Sampling Methodology for HCFA Cases 

The universe consists of all LTR-22 cases referred to the OPDIVs from the period August 

1989 though October 1989. There were 278 LTR-22 referrals to HCFA and 23 LTRreferrals to SSA. Since the universe of referrals to SSA was small, all of their cases were 

sampled. 

Sample size estimates are based on the assumption that 50 percent of the cases are stil open 

since no information was available on this frequency. Assuming that the frequency of open 

cases is 50 percent, a sample of 166 cases provides 95 percent assurance that the true value 

wil lie within 5 percentage points of this estimate. A response rate of 100 percent was 

achieved for this telephone survey. 

To obtan the sample of 166 cases, a systematic sampling approach was used. Three random 

starting points were chosen and every fifth case from each random start thereafter was selected 

from a list of HCFA cases. The list of cases was provided by 01 from the file they maintain. 
Data Collection 

We conducted telephone interviews during the week of March 12 to determine the status of 

166 HCFA LTR-22 cases, or 60 percent of the universe. The 166 case sample is composed of 

2 received from GAO, 3 received via telephone, and 161 received by mail. 

The HCFA case files were at the ROs or the fiscal contractors (carers or intermediares). The 

HCFA provided the following information for each of the 166 cases to be sampled: 

Name of beneficiar. 

Social Securty Number. 

HCFA RO that the case was sent to. 

Date that the case was sent to the RO. 

In addition to determning the status on specific LTR-22 cases, each of the five OPDIVS was 

interviewed to determine what type of systems exist at the Central Office level to control 

LTR-22 cases. A discussion guide was administered in person to SSA and HCFA by

interviewing the component responsible for the Hotline. The OHDS , PHS, and FSA was each 

mailed a discussion guide and then interviewed by telephone. 

A- 2

APPENDIX B 

Table A 

Survey of 166 HCFA Cases 

Region Cases 

Closed 

Cases 

Open 

Status 

Unknown Total 

100 

VII 

VII 

100 

Totals 166 

Percentage totas are weighted averages.

Table B 

A verage Number of Days HCFA Cases Were In Central Office 

Region Cass Days 

18.4 

III 14. 

16.3 

21.4 

20. 

VII N/A 

VIII 25. 

24. 

Totals 164 18. 

weighted average 

N/A = Computation is Not Applicable. 

NOTE: The time between the dates that 01 referred the cases to HCFA 

and the dates that HCFA fOlwarded the cases to the ROs. 
Table 

A verage Number 
 of Days To Close HCFA Cases 

Region Cases Days 

19. 

95. 

III 60. 

N/A 

77. 

49. 

VII N/A 

VIII 69. 

99.4 

56. 

Total 71.9 

weighted average 

NOTE: The tie between the dates that 01 referred the cases to HCFA 

and the dates the cases were closed. 

Table D 

A verage Number of Days For ROs To Close HCFA Cases 

Region Cases Days 

14. 

70.3 

ill 72. 

N/A 

57. 

31.0 

VII N/A 

VIII 50. 

77. 

47. 

Total 56. 

weighte average


NOTE: The time between the dates that HCFA forwarded the cases to 

the ROs and the dates that the cases were closed. 
Table E 

Aging HCFA Open Cases Average Number of Days 

Region Cass Days 

N/A 

167.3 

III N/A 

154.4 

182.2 

135 

VII N/A 

VIII N/A 

163.3 

N/A 

Total 165. 

NOTE: The time between the dates that 01 referred the cases to HCFA 

and the dates of the interview to obtai the survey inormation. 

Table F Last Action Taken On HCFA Open Cases Average Number of Days 

Region Cases Days 

N/A 

103. 

III N/A 

118. 

104. 

VII N/A 

VIII N/A 

104. 

N/A 

Total 106. 

weighted average 

NOTE: The time frm the dates of the last actions taen on the cases to 

the dates of the interviews. 

B - 4 
APPENDIX C 

DETAILED PROCESSING PROCEDURES FOR LTR-22 HOTLINE CASES 

Health Care Financing Administration


Within HCFA, the Office of Budget Admnistration (OBA), Management Planning and 

Analysis Section, Management Analysis Branch handles the Hotline referrals. When OBA 

receives 01 Hotline cases, they are logged in using a dual system of index cards. One is a 

numerical file with the cases in order by 01 case number. The other is fied by beneficiar or 

name of person reportng the alleged complaint. Both of these card files are cross referenced 

to each other and contain the date the case was sent out to the RO. Each case is also recorded 

on a paper log with case number, the date HCFA received the case, and whether the case was 

received from GAO Hotline. 

After the case is logged in, it is sent to one of ten ROs. The HCFA' s policy is to send the 

cases out within one week of receipt in Central Office. There is no preliminar research 

conducted on the cases within HCFA Central Office prior to sending them out to the ROs. 

Central Offce maintais a copy of the LTR-22 case as it was sent from 01, and places them in 

a fiing cabinet along with the LTR-21 cases. 

In most of HCFA ROs, the Beneficiar Services (or Program Services) Branch within the 

division of Medicare handles the Hotline referrals. Initially, the cases go to the Regional 

Admnistrator for each RO. From there, they are forwarded to the Beneficiary Services 

Branch within the RO for processing. 

Five of the ROs maintai their log in/tracking systems on computer (usually on DBASE llI+). 

For the most part, the carers, intermediares, and PROs directly send cases to an OIFO if 

there is potential fraud and abuse found in the course of developing a Hotline case. In six 

ROs, the contractor determnes if a case should go back to 01 for investigation and possible 

prosecution. 

One RO is in constant close contact with offcials from 01, who are located in their building. 

In some cases this RO refers cases to 01, and in others the contractors refer them. 

It is reasonable to hypothesize that the ROs that handle cases in their immediate office 

determne at the RO level whether to send the cases to 01, and those that send all the cases to 

contractors have the contractor refer potential fraud/abuse cases to an OIFO. However, two 

ROs that send nearly every case through to the contractor have the contractor send the case 

back to the RO if potential fraud or abuse is found, and the RO decides whether to send it to 

OIFO. 

C - 1

Three ROs knew they had received some cases that required a response back to HCFA Central 

Offce (and in tu to 01) durng the thee month study period. The remaider of the ROs 

were unsure about receiving any cases for which a response to HCFA Central Offce was 

required. 

Social Security Administraton 

Within SSA, the Division of Internal Control and Securty (DICS) handles DHHS Hotline 

referrals. When cases arve from 01, they are logged in, and each case is copied and 

maintaned in a fie. Curently the log-in system is manual, but there are plans to automate. 

An index card is created and fied by beneficiar name (01 case number is not recorded). 

Initial case development is done centrly before sendig each case out to one of SSA 

components for furer development. If a hotline report clearly sets out the facts with enough 

specific informtion to indicate that fraud is probably involved, DICS imediately refers the 

case to 01. 

If there is enough information in the letter or cal from the beneficiar, DICS wil attempt to 

locate Social Securty Numbers and Master Beneficiar Record or Supplementa Securty 

Record records for the individual(s) being reported. Based on these records along with the 

information supplied by the correspondent, DICS wil either dispose of the case as "no action 

necessar" (e.g., it turs out that the person reported as not disabled but receiving benefits has 

never received disabilty benefits), or wil refer it to the appropriate component for further 

development It is sometimes determned with a phone call to a component that a case can be 

closed, but in a majority of cases, a referral to an SSA component is made for case 

development. 

If an SSI situation is involved, the case is referred for action diectly to the servicing field 

offce. If it is a disabilty case, it is referred to the Integrty Section in the Offce of Disabilty 

Operations (ODO). If the case involves a Social Securty Number problem, it is referred back 

to 01. Additionaly, there are 1 350 Distrct Offices, six program service centers, or the Offce 

of Central Records Operations where the case might be referred. 

In October 1987, SSA Central Office developed guidelines to institute a more standardized 

handling of hotline cases thoughout SSA. The guidelines consist of highly detailed 

instrctions on how DICS and the components should respond to the public and better handle 

the cases. The guidelines also instrct the components how and where to refer cases for

crinal investigation. If a component finds evidence of fraud, the component sends the case 

diectly to 01.

Public Health Service


The Offce of Resource Management (ORM) within PHS receives DHHS Hotline cases. 

Once received by ORM, the cases are sent to one of ten PHS agencies. Each case is logged in 

and stored on a computer with the 01 control number and the date the case was referred to an 

agency. A due date of 45 days past the received date is assigned to the case. When the case is 

closed, the date closed is added to the log along with a brief description of the case and its 

disposition. 

The agencies respond back to ORM with a memorandum or an investigative report. When 

final cases come back to Central Offce, they perform a qualitative review to ensure that the 

agencies have adequately handled all allegations. If a porton of the case is incomplete, it is 

sent back to the agency or the agency is required to issue a supplemental report to Central 

Office. The PHS Central Offce, not the agency, maes the determnation if a case should be 

referred to 01 for investigation. 

Completed fIes are maitained in PHS Central Offce. They contai the original 01 case, 

transmittal memorandum sending the case to the agencies, the agency response, and the 

Central Offce closing memorandum. 

The PHS report it would handle LTR-22s the same as LTR-21s. 

Family Support Administration 

Practically all of DHHS Hotline cases sent to FSA involve welfare fraud, and are handled by 

the Offce of Famly Assistance (OFA) within FSA. The OFA maintans a paper control log 

indicating which of the ten ROs each case was sent to, the beneficiar name, and 01 case 

control number. A cover memoradum is sent along with the case to the RO requesting a 60 

day response time on each case. 

When the ROs receive 01 cases from OFA, they send them out to State welfare offices for 

development. The ROs place a 60 day control on the cases sent to the State, but it usually 

takes longer than 60 days to complete a case and respond back to the RO with a fmal report. 

Some ROs receive interim reports on the cases. 

Once a case is completed, the RO sends a memorandum to the Central Offce (OFA) detaiing 

the action taken on the case. Often complaints ar not substantiated, in which case the Central 

Offce is notified by a phone call. If evidence of welfar fraud or misuse of funds is found, 

the ROs refer the case to an 01 field offce for investigation. 

When OFA receives the final disposition on a case, they review the initial referral and the 

response for completeness, and then close out the case on the log. The OFA has never had to 

send a case back to the ROs for additional work. Completed copies of 01 case files are kept 

for several years; fIes exist back to about 1986. 

C- 3

The OFA report it would not handle LTR-22 cases any differently from LTR-21 Hotline cases. 

Office of Human Development Services 

The OHDS records all incomig DHHS Hotline cases on a computer fie with the 01 control 

number, beneficiar/complainant name, and unit the case is assigned to. Each case is given a 

cover memoradum and a two week due date. Most of the cases are handled in the Central 

Offce. 

Some cases are forwarded to one of the progrs within OHDS to be developed. Control 

over cases sent out is still maintaned by Central Offce with a due date. If a program 

component determnes that a case should be forwarded to 01, it wil send the case to Central 

Office for referral to 01. 

When a case is completed, the components respond back in wrting, and Central Offce 

conducts a qualitative review to ensure that the case has been handled properly. 

The OHDS reports it would not handle LTR-21 and LTR-22 cases any differently. 

C - 4

APPENDIX D


OPDIV COMMENTS


D ­

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Health Care 

DEPARTMENT OF HEALTH HUMAN SERVICES Financing Administration 

Memorandum 

Date OCT I 6 . 1990 

From Gai R. Wilensky, Ph.D. (\,. '\ Adtrator tVSubject OIG Draf Report: ''Hotle Referral Follow- " (OEI-12-9001060) 

The Inpector General C"Ci "" 

Offce of The Secreta ,. a m ex 2: "" 

f8 :z 


We have reviewed thi draf report which focuses on the controls and gudeJir; 

governg HCFA follow-up to Offce of the Inpector Genera (OIG) hotle ;; 

referral. The report concludes that extig HCF A centr and regiona offce eX 

controls and gudelies are inufcient and contrbute to untiely responses to 

referr. OIG recommends that HCFA control caes sent to the regional offces by 

requirg the regions to respond withi a specifc tieframe and that HCF A centr 

offce establish minimum gudelies for regional offce hadlg of the referr. 

We concur with OIG' s fidigs and have addressed the specic 

recommendations in the attachment. We appreciate the opportty to review thi 

draf report. Please advie us if you concur with our position on the report 

recommendations at your earliest convenience. 

Attchment 

PDIG 

DIGDIGDIGAIGOGC/IG 

EX SEC
 J OIl'! DATE SE 

:::i 
.. 

,, .. ,,), . . .., . .. ,.. h" '" ,,C/' 

Comments of the Health Care Financing Administration ( 

on the OIG Draft Report - 'Hotline Referral Follow-up 

OEI-12-90-01060 

OIG Recommendation Number 

HCF A Central Offce should control cases sent out to the Regional Offces (ROs)


by requig the regions to respond withi a specifc tieframe on the disposition of 

al caes.


HCF A Response AGREE 

Based on the results of an internal study of this function, HCF A has implemented 

procedures requirig the ROs to acknowledge receipt of cases from CO withi 

10 days. ROs are required to provide a status of disposition for each cae to 

withi 45 days of receipt of the referral. CO staf curently maitai a control 

system to track and measure the tieliess of RO responses. 

OIG Recommendation Number 2: 

HCF A Central Offce should develop minimum guidelines for regional handlig of 

Hotline cases. Guidelines should include requiring the regions to have a uniorm 

minimum set of controls on all cases that they send out to the contractors as well 

as the ones they handle at the regional offce level, and to maintain the Offce of 

Investigations control number on a log system. 

HCF A Response AGREE 

We concur and will develop uniform RO guidelines. 
( , 

 

.. 

"'V lS. 

DEPARTMENT OF HEALTH &. HUMAN lfVCcfS Social Securitx Administration 

:."'''dJa Refer to: Memorandum 

. S


Date: 

From: 

C mmission cial Security 

Subject: ffice of Inspector General Draft Report, "Hotline Referral 

Follow-Up" (OEI-12-90-01060) --INFORMTION 

To: Mr. Richard P. Kusserow 

Inspector General


Attached is the response to your draft report. 

further assistance, please let us know.


Attachment: 

SSA response


IG 

PDIG 

DIG-AS 

DIGDIG- QI 

AIG-MY -­

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EX SEe: 

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If we can be of


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COMMENTS OF THE SOCIAL SECURITY ADMINISTRTION ON THE OFFICE OF 

INSPECTOR GENERAL DRAFT REPORT. "HOTLINE REFERRL FOLLOW-UP" 

(OEI-12-90-01060) 

Office of Inspector General (OIG) Recommendation


The Social Security Administration (SSA) should adhere to its


systems of controls. While SSA has an established system in


place to control LTR-22 cases, this system should be fully
 utilized. Whatever time frames are used should be adhered to and 

treated as a serious due date for an interim or final response


from their components. SSA and its components should record and


maintain the Office of Investigations (OI) case number.


SSA Comment


We concur. We will include in all future referrals to components


a statement addressing the seriousness of the controls and the


need for timely development and response to the SSA Systems


Securi ty Officer. We will also send out reminders to every


component regarding the required timeframes for follow-up. 

Concerning the use of the OI case number, we were already


recording and maintaining the OI case number on all referrals


when the inspection was performed.

Ofice of 

Human Development Services 

Asistant Secretary


Washington DC 20201-01 

TO: Richard P. Kusserow 

Inspector General


FROM: Assistant Secretary 

for Human Development Services


SUBJECT: Comments on Draft Report: "Hotline Referral Follow-Up,

OEI-12-90-01060 

Thank you for the opportunity to review the draft report titled


"Hotline Referral Follow-Up. We note that the report describes


the control system established by the Office of Human Development
 Services (HDS) for tracking the Hotline cases we currently 

recei ve 


Until now , HDS has only received cases where a memorandum is
 required to be sent back to your off ice wi thin 60 days explaining actions taken on the case (so-called LTR-21 cases). When HDS 

begins to receive cases where no further contact with your office


is required (LTR-22 cases), please be assured that we will


maintain these cases under the same control system we now use for


LTR-21 cases. 

If you have any questions or need further information , please
 contact David Bunoski , Acting Director of the HDS Executive
 Secretariat , on 
 24S-31760

fli 

Mary Gall 
. ,. . 

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

SE 2 I 
 190

Assistant Secretary for Health


OIG Draft Report Hotline Referral Follow- up, 

OEI-12-90-01060 

Inspector General , as


his i s to p r 0 v ide 0 u r co mm en t s on the sub j e c t a I G d r aft 

inspection report. The draft report examines the procedures


employed by each Operating Division within HHS in processing the


Department s Hotline referrals which do not require a response 

OIG (called LTR-22s). 

Although PHS did not receive any LTR-22 hotline referrals during


the )- month period studied by OIG, we reported to your staff that 

we would handle the LTR-22 hotline referrals in the same manner


in which we handle the LTR-21 hotline referrals. The LTR-21 

hotline referrals require PHS to report to OIC on the actions


taken to address the allegations contained in the hotline


referrals. 

e 0 n cur wit h the d r aft r e po r t ' s r e co mm end a t ion t hat w hen PHS 

begins to receive LTR-22 cases, that we include them in the same


control system currently used for the LTR-21 cases so that we may 

track their resolution and implementation of corrective action


as appropriate.


Since the completion of the OIG study, we have received six 

LTR-22 hotline referrals. Two of the six have been resolved. 

These referrals have been treated in the same anner as those


which require a response to OIG. They have been logged into the 

PHS Hotline Control System , a timeframe of 45 days was


established for their resolution , and the file includes or will


include a brief description of the hotline referral and its


disposition. 

" eJ.J i: 

James O. Hason , H. Dr. 

c c : 

E S / P liS


ASH 

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*U. S. GOVERNMENT PRINTING OFFICE: 1989-622' 581