Department of Health and Human Services

OFFICE OF

INSPECTOR GENERAL

 

COMMUNITY LIVING 

ASSISTANCE SERVICES AND 

SUPPORTS PROGRAM: 2011

REPORT TO CONGRESS

Daniel R. Levinson 

Inspector General

December 2011

OEI-04-11-00450
THE CLASS PROGRAM: 2011 REPORT TO CONGRESS

OEI-04-11-00450

CLASS PROGRAM STATUS 

On October 14, 2011, the Secretary of Health and Human Services (HHS) informed 

Congress that HHS had not identified a Community Living Assistance Services and 

Supports (CLASS) program benefit plan that is both actuarially sound for the next 

75 years and consistent with the requirements of Title VIII of the Patient Protection and 

Affordable Care Act of 2010 (the CLASS Act). Following this announcement, HHS

suspended program implementation activities. 

WHY WE DID THIS STUDY

Effective January 1, 2011, the CLASS Act established the CLASS program as a federally 

administered, voluntary insurance program to help working adults cover some costs of 

long-term-care services and supports. The CLASS Act requires the HHS Office of 

Inspector General (OIG) to submit an annual report to the Secretary and Congress on the 

overall progress of the CLASS program and the existence of waste, fraud, and abuse in 

the program. Each report must include findings in four areas: providing cash benefits; 

determining eligibility; providing quality assurance and protecting against waste, fraud, 

and abuse; and recouping unpaid and accrued benefits. 

HOW WE DID THIS STUDY

We reviewed progress in the development of the CLASS program from March 23, 2010, 

when the CLASS Act was enacted, through October 14, 2011, when program activities 

were suspended. This review focuses primarily on the Administration on Aging’s (AoA)

activities in the four areas specified in the CLASS Act’s OIG annual reporting 

requirement after January 2011, when AoA became responsible for developing the 

program. We obtained data about AoA’s progress from interviews with AoA senior 

management, a questionnaire completed by AoA staff, and documents provided by AoA 

to support interview and questionnaire responses.

WHAT WE FOUND

AoA focused most of its efforts on developing at least three actuarially sound benefit plan

alternatives, as required by the CLASS Act. The CLASS Act requires the Secretary to

designate one of these benefit plan alternatives as the CLASS Independence Benefit Plan 

by October 1, 2012. As stated above, the Secretary informed Congress of the status of 

the benefit plan on October 14, 2011.

WHAT WE RECOMMEND

The Secretary has not designated a viable benefit plan. Therefore, we have no 

recommendations regarding program progress or the existence of waste, fraud, and abuse. 

OIG will determine the most appropriate way to meet OIG’s CLASS Act reporting 

requirements in future years based on the program’s status. AoA had no comments on 

the report.
 

TABLE OF CONTENTS

Objective ......................................................................................................1 

Status of the CLASS Program .....................................................................1 

Background ..................................................................................................1 

Methodology ..............................................................................................12 

Findings......................................................................................................14 

I. Providing cash benefits ..............................................................14 

II. Determining eligibility .............................................................17 

III. Providing quality assurance and protecting against waste, 

fraud, and abuse .............................................................................18 

IV. Recouping unpaid and accrued benefits ..................................19 

Conclusion .................................................................................................19 

Agency Comments and Office of Inspector General Response .................19 

Appendixes ................................................................................................20 

A: OIG Reporting Requirement in the CLASS Act ......................20 

B: Agency Comments ...................................................................21 

Acknowledgments......................................................................................22 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 1

OBJECTIVE

To report progress in the development of the Community Living 

Assistance Services and Supports (CLASS) program. 

STATUS OF THE CLASS PROGRAM

On October 14, 2011, the Secretary of Health and Human Services (HHS) 

informed Congress that she does not see a viable path for implementing 

the CLASS program.1 This decision was based on results presented in the 

HHS report on the actuarial, marketing, and legal analyses of the CLASS 

program.2 Following this announcement, HHS suspended program 

implementation activities.3

Title VIII of the Patient Protection and Affordable Care Act of 2010 (the 

CLASS Act) requires the HHS Office of Inspector General (OIG) to 

submit an annual report to the Secretary and Congress on the overall 

progress of the CLASS program and the existence of waste, fraud, and 

abuse in the program. Each report must include findings in four areas: 

providing cash benefits; determining eligibility; providing quality 

assurance and protecting against waste, fraud, and abuse; and recouping 

unpaid and accrued benefits.

 

4

This report describes the Administration on Aging’s (AoA) activities prior 

to program suspension. OIG will determine the most appropriate way to 

meet OIG’s CLASS Act reporting requirements in future years based on 

the program’s status. 

 

BACKGROUND

Effective January 1, 2011, the CLASS Act established the CLASS 

program as a federally administered, voluntary insurance program to help 

working adults cover some costs of their long-term-care (LTC) services 

and supports. LTC services assist primarily individuals with chronic 

illness or disabilities in their daily activities.5

1 Kathleen Sebelius, Letter to Congress, October 14, 2011. Accessed at 

 Nearly 70 percent of 

http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011.

2 HHS, A Report on the Actuarial, Marketing, and Legal Analyses of the CLASS Program. Accessed at 

http://aspe.hhs.gov/daltcp/reports/2011/class/index.pdf on October 15, 2011.

3 Kathleen Sebelius, HealthCare Blog: The CLASS Program, October 14, 2011. Accessed at 

http://www.healthcare.gov/blog/2011/10/class10142011.html on October 18, 2011.

4 Public Health Service Act (PHSA) § 3209.

5 Centers for Medicare & Medicaid Services (CMS), What is Long-Term Care? Accessed at 

http://www.medicare.gov/LongTermCare/Static/Home.asp on October 4, 2011. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 2

Americans over age 65 will require LTC services at some point in their 

life.6 

The CLASS program is intended to allow working individuals age 18 and 

older to purchase insurance that can help pay for future LTC services if 

they meet all eligibility requirements, including having qualifying 

functional limitations.7 Individuals with qualifying functional limitations:

• are unable to perform at least two or three activities of daily living 

(ADLs) without substantial assistance,8, 9

• require substantial supervision to protect against threats to their health 

and safety because of substantial cognitive impairment, or

• have a level of functional limitation that is determined under 

regulations prescribed by the Secretary to be similar to the levels 

described above.10 

The purpose of the CLASS program is to: 

• provide tools to allow individuals to maintain their personal and 

financial independence while living in the community, 

• establish infrastructure to help address the Nation’s community living 

assistance needs, 

• alleviate burdens on family caregivers, and 

• address the tendency to place individuals with functional limitations in 

institutional settings by providing a financial mechanism to support 

community living.11 

The CLASS program should increase access to in-home and community 

LTC services through a cash benefit that may enable eligible beneficiaries 

to avoid nursing homes and other more expensive care options for as long 

as possible. This may reduce reliance on Medicaid, which is jointly 

6 Prudential Research Report, Long-Term Care Cost Study, 2010. Accessed at 

http://www.hcbs.org/files/198/9879/LTCCostStudy.pdf on September 6, 2011. 

7 PHSA §§ 3201 and 3204(c) (describing individuals eligible to enroll); 3205(b) and 3202(6) (defining eligible 

beneficiary).

8 The CLASS Act states that the minimum number of ADLs may be two or three. The Secretary will determine 

the minimum number and define the term “substantial assistance.” PHSA § 3203(a)(1)(C)(i). 

9 ADLs include bathing, dressing, using the toilet, transferring (e.g., to or from a bed or chair), caring for 

incontinence, and eating. PHSA § 3202(3).

10 PHSA § 3203(a)(1)(C).

11 PHSA § 3201.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 3

financed by the Federal and State governments, to pay for LTC services.12 

The Congressional Budget Office (CBO) estimated that the CLASS 

program would result in $2 billion in savings to the Medicaid program by 

2019. This estimate was based on the assumption that the program would 

collect premiums in 2011 and pay benefits in 2016.13

Overview of LTC Services

LTC Services. LTC services include a variety of health and social services 

(e.g., assistive technology, meal delivery), but do not include medical 

treatments for acute and chronic conditions.14, 15 LTC services often 

involve nonskilled assistance with ADLs but can also involve skilled 

assistance (e.g., providing physical therapy or monitoring a serious 

illness). LTC services can be offered in institutional settings (e.g., nursing 

homes) or in the home by hired attendants (e.g., home health aides) or 

family members.16 LTC services are also provided in community settings 

(e.g., community centers offering adult day services).17

The annual costs of LTC services vary depending on the type and amount 

of care, the service provider, and the location. For example, care at home 

provided by a home health aide can cost $21 an hour.18 The national 

median yearly rate for a room at an assisted living facility is

12 The Federal Government paid 66 percent and State governments paid 34 percent of total Medicaid 

expenditures in 2009. National Health Policy Forum, The Basics: Medicaid Financing, February 4, 2011. 

Accessed at http://www.nhpf.org/library/the-basics/Basics_MedicaidFinancing_02-04-11.pdf on 

August 29, 2011.

13 This estimate was based on the assumption that 3.5 percent of the adult population would participate in the 

program. CBO, Letter to the Honorable George Miller, Chairman of the Committee on Education and Labor, 

November 25, 2009. Accessed at 

http://www.cbo.gov/ftpdocs/107xx/doc10769/CLASS_Additional_Information_Miller_letter.pdf on 

August 29, 2011.

14 National Clearinghouse for Long-Term Care Information, Definitions & Need for LTC. Accessed at 

http://www.longtermcare.gov/LTC/Main_Site/Understanding/Definition/Index.aspx on October 4, 2011.

15 Assistive technology is any product or equipment used to increase, maintain, or improve the functional 

capabilities of individuals with disabilities. National Institutes of Standards and Technology, What is Assistive 

Technology? Accessed at http://standards.gov/standards_gov/assistiveTechnology.cfm on August 5, 2011.

16 Home health aides provide nonmedical care in the home for individuals who need assistance with ADLs and 

supervision for individuals with cognitive impairments. They may be licensed but do not provide medical care. 

Bureau of Labor Statistics, Home Health Aides and Personal and Home Care Aides. Accessed at 

http://www.bls.gov/oco/ocos326.htm on October 3, 2011.

17 Adult day services are structured, comprehensive programs provided for less than 24 hours at a communitybased center to care for functionally impaired adults. National Clearinghouse for Long-Term Care Information, 

Glossary. Accessed at http://www.longtermcare.gov/ltc/Main_Site/Site_Utilities/Glossary.aspx#l on 

October 4, 2011.

18 National Clearinghouse for Long-Term Care Information, Costs of Care. Accessed at 

http://www.longtermcare.gov/LTC/Main_Site/Paying/Costs/Index.aspx on September 30, 2011. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 4

approximately $39,000.19 The national median rate for a semiprivate 

room in a nursing home or skilled nursing facility is approximately 

$70,000 a year.20

Medicare Pays for Limited LTC Services. Four out of five Americans 

incorrectly believe that Medicare provides extensive coverage for LTC 

services.21 However, Medicare accounts for only 23 percent of total LTC 

spending.22 Medicare coverage of LTC services includes only select home

health care services and limited time in a skilled nursing facility.23, 24 

Medicare coverage of home health services is limited to individuals who 

require part-time skilled nursing care or certain skilled therapy services.25 

The home health benefit also includes services such as home health aide 

services and medical social services.26

Medicare Part A pays in full for up to 20 days in a skilled nursing facility 

directly following a 3-day hospital stay.

 

27 Beneficiaries must pay

coinsurance for days 21–100.28 Medicare does not cover care in skilled 

nursing facilities after 100 days.29

19 Assisted living facilities provide personal and medical care for those who are not able to live by themselves 

but do not require the constant care provided by nursing homes. This figure is based on a one-bedroom, singleoccupancy rate. Genworth Financial, Executive Summary: Genworth 2011 Cost of Care Survey. Accessed at 

http://www.genworth.com/content/etc/medialib/genworth_v2/pdf/ltc_cost_of_care.Par.85518.File.dat/Executive

%20Summary_gnw.pdf on August 4, 2011. 

20 Nursing homes and skilled nursing facilities provide skilled nursing care 24 hours a day. Ibid. 

21 Kathy Greenlee, Statement before the House Committee on Energy and Commerce Subcommittee on Health, 

March 17, 2011. Accessed at 

http://republicans.energycommerce.house.gov/Media/file/Hearings/Health/031711/Greenlee.pdf on 

August 5, 2011.

22 For this calculation, total LTC spending includes spending on nursing home and home health services. It 

does not include community-based services, which are financed primarily through Medicaid home- and 

community-based waivers. Kaiser Commission on Medicaid Facts, Medicaid and Long-Term Care Services 

and Supports, February 2009. Accessed at http://www.kff.org/medicaid/upload/2186_06.pdf on 

August 5, 2011.

23 Home health care is a range of skilled and unskilled health care services provided in the home. CMS, What 

is Home Health Care? Accessed at 

http://www.medicare.gov/homehealthcompare/About/GettingCare/WhatisHomeHealthCare.aspx on 

September 6, 2011.

24 CMS, Medicare Benefit Policy Manual. Pub. No. 100-02, ch. 7, §10.1. Accessed at 

https://www.cms.gov/manuals/downloads/bp102c07.pdf on September 30, 2011. Social Security Act 

§§ 1812(a)(2)(A).

25 42 CFR § 409.42(c).

26 42 CFR § 409.45. 

27 42 CFR § 409.61(b). CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 8, § 20.1.

28 42 CFR § 409.61(b). The Medicare Part A beneficiary copayment is $141.50 per day for days 21–100 in a 

skilled nursing facility. HHS, Medicare Premiums and Coinsurance Rates for 2011. Accessed at 

https://questions.medicare.gov/app/answers/detail/a_id/2305/~/medicare-premiums-and-coinsurance-rates-for2011 on August 29, 2011. 

29 Social Security Act §§ 1812(a)(2)(A).
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 5

Medicare also does not pay for assisted living facilities, retirement 

communities, or adult day services. Additionally, the Medicare home 

health benefit does not cover transportation services or services with the 

sole purpose of enabling an individual to continue living at home.30 

Medicaid Pays for 40 Percent of All LTC Services. In 2009, Medicaid 

spent $111.2 billion on LTC services, and this spending is expected to 

increase as the U.S. population ages.31 Medicaid accounts for 40 percent 

of total LTC spending.32

Medicaid coverage of LTC services varies by State. Medicaid pays for 

care in nursing facilities if recipients meet financial and functional 

eligibility requirements.33 However, many Americans must first exhaust 

their resources to qualify financially for Medicaid LTC coverage.34 

Medicaid covers adult day services in some States. Generally, Medicaid 

coverage of home health services includes nursing; home health aides; and 

medical equipment, supplies, and appliances used in the home.35 

Medicaid may also pay for some home modifications.36 

Medicaid waiver programs cover some care-related costs in assisted living 

facilities in some States but do not cover room and board. 

Few People Have Private LTC Insurance. Only 8 to 10 percent of 

Americans have private LTC insurance coverage.37 Private insurance 

accounts for 9 percent of total LTC spending.38 Age or health status can 

affect the cost of private LTC insurance policies, which often require 

medical underwriting or a review of an applicant’s health status to 

30 CMS, Medicare Benefit Policy Manual. Pub. No. 100-02, ch. 7 §§ 80.2 and 80.4. Accessed at 

https://www.cms.gov/manuals/downloads/bp102c07.pdf on September 30, 2011.

31 Greenlee, op. cit. 

32 For this calculation, total LTC spending includes only spending on nursing home and home health services. 

It does not include spending on community-based services, which are financed primarily through Medicaid 

home- and community-based waivers. Kaiser Commission on Medicaid Facts, op. cit.

33 Financial and functional eligibility requirements vary by State. For individuals enrolled in Medicaid and 

Medicare, Medicaid pays for nursing facilities after Medicare coverage is exhausted. HHS, Understanding 

Medicaid Home and Community Services: A Primer. Accessed at http://aspe.hhs.gov/daltcp/reports/primer.pdf

on August 25, 2011. 

34 National Clearinghouse for Long-Term Care Information, Who Pays for LTC Services? Accessed at 

http://www.longtermcare.gov/LTC/Main_Site/Paying/Costs/Who_Pays.aspx on August 5, 2011.

35 42 CFR §§ 440.70(b) and 440.180(b).

36 Social Security Act § 915(c) and CMS, HCBS Waivers Section 915(c). Accessed at 

https://www.cms.gov/MedicaidStWaivProgDemoPGI/05_HCBSWaivers-Section1915(c).asp on 

October 5, 2011. 

37 Greenlee, op. cit. 

38 For this calculation, total LTC spending only includes spending on nursing home and home health services. 

It does not include spending on community-based services, which are financed primarily through Medicaid 

home- and community-based waivers. Kaiser Commission on Medicaid Facts, op. cit. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 6

CLASS Program Structure

 Private insurance 

companies use this process to exclude or set higher premiums for 

individuals at the highest risk of needing future LTC services, making it 

difficult for individuals with certain preexisting medical conditions to 

purchase such policies. 

The CLASS Act tasks the Secretary with developing, overseeing, and 

administering the CLASS program. On January 28, 2011, the Assistant 

Secretary for Aging established a CLASS Office responsible for 

developing, overseeing, and administering the CLASS program.40

The CLASS Office is to coordinate with other Federal departments and 

agencies (e.g., the Department of the Treasury, the Social Security 

Administration, ASPE) to develop and implement the CLASS program.

 

41 

To implement the program, AoA must determine details about enrollment; 

the benefit plan; premiums; cash and service benefits; funding; and 

protections from waste, fraud, and abuse. 

determine whether he or she is eligible for coverage.39

Enrollment. Actively employed individuals age 18 and older who earn 

wages or income taxable under the Old-Age, Survivors, and Disability 

Insurance Program or the Railroad Retirement Tax Act are eligible to 

enroll in the CLASS program.42 The CLASS Act describes two processes

for enrollment: (1) a process for participating employers to automatically 

enroll eligible employees and withhold CLASS premiums through payroll 

deductions; and (2) an alternative process for individuals who are selfemployed, have more than one employer, or have an employer that does 

not participate in automatic enrollment. 43, 44 Individuals must have the 

option to waive enrollment at any time.45

The CLASS Act prohibits medical underwriting of enrollees, allowing 

individuals with preexisting medical conditions to participate.

 

46 

39 HHS, Glossary. Accessed at http://www.healthcare.gov/glossary/M/medicalunderwriting.html on 

October 5, 2011. 

40 76 Fed. Reg. 5178 (Jan. 28, 2011).

41 Between the enactment of the CLASS Act in March 2010 and January 2011, HHS’s Office of the Assistant 

Secretary for Planning and Evaluation (ASPE) led the work on CLASS.

42 PHSA § 3204(c)(1)–(3). “Actively employed” is defined at PHSA Sec. 3202(2). Certain individuals (e.g., 

prison inmates and Medicaid recipients who are patients in a hospital or nursing facility) are prohibited from 

enrolling in the CLASS program. PHSA Sec. 3204(c)(4). 

43 PHSA §§ 3204(a)(1) and (e)(1). 

44 PHSA § 3204(a)(2).

45 PHSA § 3204(b).

46 PHSA § 3203(b)(3).
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 7

The Benefit Plan. AoA must develop at least three actuarially sound 

benefit plan alternatives.47 Each alternative must include details about 

premiums, benefit amounts, benefit eligibility, and access to advocacy 

services and advice and counseling.48

The CLASS Act established the CLASS Independence Advisory 

Council.

 

49 The council must evaluate the benefit plan alternatives and 

recommend to the Secretary the plan that “best balances price and benefits 

to meet enrollees’ needs in an actuarially sound manner, while optimizing 

the probability of the long-term sustainability of the program.”50 The 

President appoints members of the council. Upon receiving the council’s 

recommendation, the Secretary must designate one actuarially sound 

benefit plan to serve as the CLASS Independence Benefit Plan by 

October 1, 2012.51 

Premiums. Premiums must be based on an actuarial analysis of the 

75-year costs of the program and must ensure program solvency in this 

period.52 The CLASS Act requires that the monthly premium at 

enrollment generally not change as long as the individual is an active 

enrollee (i.e., is enrolled in the CLASS program and has paid premiums to 

maintain enrollment).53, 54

The CLASS Act establishes a monthly premium of $5 for actively 

employed full-time students under the age of 22 and individuals with 

incomes that do not exceed the Federal poverty line.

 

55 The CLASS Act 

allows the Secretary to increase premiums if required to maintain program 

solvency.56 However, those premium increases do not apply to active 

enrollees who are 65 and older, have paid premiums for at least 20 years, 

and are not actively employed.57

Benefit Eligibility. The CLASS Act requires the Secretary to establish an

Eligibility Assessment System by January 1, 2012, to provide eligibility

47 PHSA § 3203(a)(1).

48 Ibid.

49 PHSA § 3207(a).

50 PHSA § 3203(a)(2).

51 PHSA § 3203(a)(3).

52 PHSA § 3203(a)(1)(A)(i).

53 PHSA § 3203(b)(1)(A).

54 PHSA § 3202(1).

55 PHSA § 3203(a)(1)(A)(ii)(I). The $5 premium will be increased by the percentage increase in the Consumer 

Price Index for all urban consumers (U.S. city average) each year after 2009. PHSA § 3203(a)(1)(A)(ii)(II). 

56 PHSA § 3203((b)(1)(B)(i). However, the Secretary must maintain a nominal premium. 

57 PHSA § 3203(b)(1)(B)(ii).
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 8

assessments of active enrollees applying for benefits.58 AoA is responsible 

for assisting the Secretary in meeting this requirement. 

AoA must develop processes to determine benefit eligibility, to appeal

benefit eligibility denials, and to redetermine benefit eligibility. Benefit 

eligibility determination and redetermination processes must include 

certification by a licensed health care practitioner.59 

AoA must determine the intervals at which eligible beneficiaries are 

required to submit medical evidence to recertify their eligibility and to 

submit records of benefit expenditures.60

To become an eligible beneficiary, an active enrollee must have: 

• paid CLASS premiums for at least 60 months;61

• paid CLASS premiums for at least 24 consecutive months, if a lapse in 

premium payments of more than 3 months has occurred;62

• met certain minimum earning requirements for a specified time during 

the period he/she is enrolled in the CLASS program;63 and

• been determined to have a qualifying functional limitation, as certified 

by a licensed health care practitioner, that is expected to last more than 

90 consecutive days.64

Cash Benefits. The CLASS Act requires a cash benefit averaging at least 

$50 per day. That amount varies by benefit levels, which are based on a 

scale of functional ability.65 Eligible beneficiaries may use the cash 

benefit to pay for various nonmedical services and supports needed to 

maintain independence, including: 

• home modifications, 

• assistive technology, 

• accessible transportation,

• home care aides, and

58 PHSA § 3205(a)(2)(A)(i).

59 PHSA § 3205(a)(2)(B).

60 PHSA § 3205(c)(6).

61 PHSA § 3202(6)(A)(i).

62 PHSA § 3202(6)(A)(iii). 

63 PHSA § 3202(6)(A)(ii). An eligible beneficiary must have earned at least enough money to earn a credit 

toward eligibility for future Social Security benefits (under section 213(d) of the Social Security Act) for at least 

3 calendar years of the first 60 months for which the individual has paid premiums. The Commissioner of 

Social Security sets this amount each year. The law does not establish maximum earnings requirements.

64 PHSA §§ 3202(6)(B) and 3203(a)(1)(C).

65 PHSA § 3203(a)(1)(D). There must be at least two, and no more than six, benefit levels. PHSA 

§ 3203(a)(1)(D)(ii). 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 9

• personal assistance services.66

The CLASS Act also allows eligible beneficiaries to use the cash benefit 

to obtain decisionmaking assistance concerning medical care (e.g., 

forming advance directives and accepting or receiving medical 

treatment).67, 68 

Cash benefits must be paid into each eligible beneficiary’s account, 

referred to as the Life Independence Account, on a daily or weekly 

basis.69, 70 AoA must establish procedures to credit beneficiaries’ Life 

Independence Accounts and to allow them to access their accounts using 

debit cards.71 AoA must also develop procedures to allow an eligible 

beneficiary’s authorized representatives to access his or her Life 

Independence Account.72 

Beneficiaries can defer daily or weekly benefits and receive a lump-sum 

payment. Deferred benefits may roll over from month to month but not 

from year to year.73 AoA, in conjunction with the Secretary of the 

Treasury, must recoup any accrued benefits if a beneficiary dies or fails to 

collect deferred payments after 12 months.74 All recouped benefits must 

be returned to the CLASS Independence Fund.75

The CLASS Act includes special provisions for providing cash benefits to 

eligible beneficiaries enrolled in Medicaid (Medicaid beneficiaries). 

Medicaid beneficiaries in an institutional setting (i.e., a hospital, nursing 

facility, intermediate care facility for the mentally retarded, or institution

for mental diseases) retain 5 percent of their cash benefit while 95 percent 

must be applied to the facility’s cost of providing the beneficiary’s care.76 

In some States, Medicaid beneficiaries receiving home- and communitybased services or Program of All-Inclusive Care for the Elderly services 

66 PHSA § 3205(c)(1)(B). 

67 PHSA § 3205(c)(1)(B).

68 Advance directives are written instructions regarding health care decisions to be used if an individual is no 

longer able to make these decisions. HHS, Literature Review on Advance Directives, June 2007. Accessed at 

http://aspe.hhs.gov/daltcp/reports/2007/advdirlr.htm#term on August 31, 2011. 

69 PHSA § 3205(c)(1)(A). 

70 PHSA § 3203(a)(1)(D)(iii).

71 PHSA § 3205(c)(1)(C)(i) and (ii).

72 PHSA § 3205(c)(2)(A).

73 PHSA § 3205(c)(4)(A) and (B).

74 PHSA § 3205(c)(5)(C)(i).

75 PHSA § 3205(c)(5)(C)(ii).

76 PHSA § 3205(c)(1)(D)(i).
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 10

retain 50 percent of their cash benefit.77 The remaining 50 percent must 

be applied to the State’s cost of providing assistance.78

Advocacy Services and Advice and Counseling Services. Advocacy 

services and advice and counseling services are included in the program’s 

administrative costs.79

Eligible beneficiaries must be assigned, as needed, an advocacy counselor 

under an agreement with their State Protection and Advocacy System to 

provide:

 

• information regarding how to access the appeals process established 

for the program,

• assistance with the benefit eligibility recertification process, and

• other assistance with obtaining services the Secretary will require by 

regulation.80, 81

Upon their request, eligible beneficiaries must be assigned an advice and 

assistance counselor to provide information about: 

• accessing and coordinating LTC services and supports in the most 

integrated setting,

• possible eligibility for other benefits and services, 

• developing a service and support plan, 

• available assistance with decisionmaking concerning medical care, 

including the right to accept or refuse medical or surgical treatment

and to formulate advance directives or other written instructions 

recognized by State law (e.g., a living will or a durable power of 

attorney for health care),

77 PHSA § 3205(c)(1)(D)(ii)(I) and (iii)(I).

78 PHSA § 3205(c)(1)(D)(ii)(I) and (iii)(I). A State will be paid the remaining cash benefit for eligible 

beneficiaries receiving home- and community-based services only if: (1) the State does not waive the 

requirements of section 1902(a)(1) of the Social Security Act (relating to statewideness) or of section 

1902(a)(10)(B) of the Social Security Act (relating to comparability); and (2) the State offers, at a minimum, 

case management services, personal care services, habilitation services, and respite care. PHSA 

§ 3205(c)(1)(D)(ii)(II). 

79 PHSA § 3205(b)(4).

80 State Protection and Advocacy Systems empower, protect, and advocate on behalf of individuals with 

developmental disabilities. HHS, State Protection and Advocacy Services. Accessed at 

http://www.acf.hhs.gov/programs/add/states/pnafactsheet.html on September 7, 2011. 

81 PHSA § 3205(d)(1).
• programs established and services offered under the Assistive 

Technology Act of 1998,82 and

• other services the Secretary may require by regulation.83

Not later than January 1, 2012, the Secretary must enter into an agreement 

with each State’s Protection and Advocacy System to provide advocacy 

services and with public and private entities to provide advice and 

assistance counseling.84

Funding. All CLASS premiums must be transferred to a trust fund called 

the CLASS Independence Fund.85 The Secretary of the Treasury is 

responsible for managing this fund, which must be invested and used to 

pay CLASS administrative expenses and cash benefits.86 The CLASS Act 

prohibits the use of taxpayer funds to pay for cash benefits.87 

Providing Quality Assurance and Protecting Against Waste, Fraud, and 

Abuse. AoA must include provisions in the CLASS program to prevent 

fraud and abuse.88 To protect against conflicts of interest, AoA must 

establish procedures to ensure that all entities that provide services (e.g., 

the Eligibility Assessment System, State Protection and Advocacy 

Systems, and advocacy counselors) to active enrollees and eligible 

beneficiaries: 

• have operating procedures to minimize conflicts of interest between 

the entity and active enrollees or beneficiaries; 

• provide information about all services and options available to active 

enrollees or beneficiaries, including services available through other 

entities;

• assist active enrollees or beneficiaries in accessing desired services, 

regardless of the provider; 

• report the number of active enrollees and beneficiaries assisted by age, 

disability, and whether the active enrollees and beneficiaries received 

services from the entity or another entity;89

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 11

82 The Assistive Technology Act of 1998 provides grants to States to address the assistive technology needs of 

individuals with disabilities. States have used grants to provide screen readers, computer programs, mechanical 

lifts, and other devices and services to individuals with disabilities. Association of Assistive Technology Act 

Programs, State AT Programs. Accessed at http://www.ataporg.org/atap/projects.php on August 5, 2011.

83 PHSA § 3205(e).

84 PHSA § 3205(a)(2)(A)(ii) and (iii).

85 PHSA § 3204(f)(1).

86 PHSA § 3206(a).

87 PHSA § 3208(b).

88 PHSA § 3208(c).

89 PHSA does not indicate to whom, or how frequently, entities will report this information.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 12

• provide active enrollees and beneficiaries with a list of available 

service providers that can meet their needs;90

• provide services in the best interests of active enrollees or 

beneficiaries, if the entity provides counseling or planning services; 

and

• ensure that active enrollees or beneficiaries are informed of any 

financial interest the entity has in another service provider, if the entity 

provides counseling or planning services.91

AoA must also establish standards of conduct for authorized 

representatives of eligible beneficiaries. These standards must require that 

authorized representatives provide quality services, do not have conflicts 

of interest, and do not misuse benefit payments or otherwise engage in 

fraud or abuse.92 

METHODOLOGY

Scope

We reviewed progress in the development of the CLASS program from 

March 23, 2010, when the CLASS Act was enacted, through October 14, 

2011, when program implementation was suspended.93 This review 

focuses primarily on AoA’s activities in the four areas specified in the 

CLASS Act’s OIG annual reporting requirement after January 2011, when 

AoA became responsible for developing the program. 

Data Sources 

We obtained data about AoA’s progress in developing the CLASS program 

from interviews with AoA senior management responsible for 

implementation. We interviewed the Chief Operating Officer of the 

CLASS Office, the special advisor to the Chief Operating Officer, and two 

other members of the CLASS Office. AoA also responded to a 

questionnaire and submitted documents to support its interview and 

questionnaire responses. The questionnaire asked AoA to describe its

progress and challenges in developing the CLASS program. AoA staff 

collaborated to provide one response. It also provided internal documents 

(e.g., meeting agendas, a logistics contract) and public documents (e.g., 

90 Entities that provide services to CLASS beneficiaries may include the Eligibility Assessment System, State 

Protection and Advocacy Systems, and advocacy counselors. PHSA § 3205(h). 

91 PHSA § 3205(h).

92 PHSA § 3205(c)(2)(B).

93 Prior to the establishment of the CLASS Office within AoA in January 2011, ASPE led the work on the 

CLASS program.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 13

Federal Register notice soliciting nominations for the CLASS 

Independence Advisory Council) to demonstrate its progress.

Data Analysis

We analyzed information from interviews and AoA’s responses to the 

questionnaire. We also analyzed the supporting documentation submitted 

by AoA. We used this information to describe the progress AoA reported 

in developing the CLASS program.

Standards

This study was conducted in accordance with the Quality Standards for 

Inspection and Evaluation issued by the Council of the Inspectors General 

on Integrity and Efficiency.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 14

FINDINGS

On October 14, 2011, the Secretary informed Congress that, based on the 

results of the Department’s analysis, she does not see a viable path for 

implementing the CLASS program.94 Following this announcement, HHS

suspended program implementation activities.95

This report describes AoA’s activities prior to suspension of program 

activities. OIG will determine the most appropriate way to meet OIG’s 

CLASS Act reporting requirements in future years based on the program’s 

status. 

 

During our review period, AoA was in the early stages of planning and 

developing the CLASS program. Its priority was to develop benefit plan 

alternatives that would enable the program to be solvent for the required 

75 years. AoA cannot implement the program if the Secretary does not 

designate a benefit plan. The Secretary is not required to designate a 

benefit plan until October 1, 2012. Before program activities were

suspended, AoA did not expect to collect premiums until 2013 or pay 

benefits until 2018. 

Consistent with the CLASS Act’s OIG reporting requirements, our report 

describes AoA’s activities in developing the program with respect to:

I. providing cash benefits; 

II. determining eligibility; 

III. providing quality assurance and protecting against waste, 

fraud, and abuse; and

IV. recouping unpaid and accrued benefits. 

I. Providing cash benefits 

To provide cash benefits, AoA must first develop at least three actuarially 

sound benefit plan alternatives to present to the CLASS Independence 

Advisory Council. The Secretary must designate one of the alternatives as 

the CLASS Independence Benefit Plan, which must include details about 

premiums, cash benefit amounts, benefit eligibility, and access to 

advocacy services and advice and counseling services. AoA must 

94 Kathleen Sebelius, Letter to Congress, October 14, 2011. Accessed at 

http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011.

95 Kathleen Sebelius, HealthCare Blog: The CLASS Program, October 14, 2011. Accessed at 

http://www.healthcare.gov/blog/2011/10/class10142011.html on October 18, 2011.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 15

establish procedures for active enrollees to apply for benefits and 

procedures to pay benefits. 

AoA focused on developing actuarially sound benefit plans

AoA made progress in attempting to develop at least three actuarially 

sound benefit plan alternatives.96 Because program implementation 

depends on completing this requirement, AoA focused its efforts on 

developing alternatives for the CLASS Independence Benefit Plan. To 

develop benefit plans, AoA assessed program models, collaborated with 

other agencies and experts, and prepared for the appointment of the 

CLASS Independence Advisory Council. 

AoA expected to provide cash benefits in 2018 at the earliest, pending the 

designation of a benefit plan by October 1, 2012.97 However, HHS 

reported in October 2011 that it was unable to identify an actuarially 

sound benefit plan within the legal requirements of the CLASS Act.98

AoA must complete the following requirements pertaining to providing 

cash benefits if the Secretary designates a benefit plan at a later time: 

• establish procedures for active enrollees to apply for benefits, 

• establish procedures for crediting beneficiaries’ Life Independence 

Accounts and allowing beneficiaries to access accounts using a debit 

card,

• establish procedures for crediting institutions caring for Medicaid 

beneficiaries and States providing Medicaid coverage, and 

• establish procedures for authorized representatives to access eligible

beneficiaries’ Life Independence Accounts.

AoA Developed and Assessed Program Models. AoA hired a Director of 

Actuarial Integrity and Benefit Design (i.e., Chief Actuary) in January 

2011 to lead AoA in the actuarial modeling and market research activities 

necessary to develop actuarially sound benefit plan alternatives. In June 

2011, the Chief Actuary developed a CLASS Enhancement Plan outlining 

the features that the program should include to be actuarially sound. 

To develop actuarially sound benefit plan alternatives, AoA worked with 

ASPE to assess different program models based on a wide range of 

96 For a detailed analysis of the benefit plan alternatives, see HHS, A Report on the Actuarial, Marketing, and 

Legal Analyses of the CLASS Program. Accessed at http://aspe.hhs.gov/daltcp/reports/2011/class/index.pdf on 

October 15, 2011.

97 AoA expected enrollment to begin in 2013 at the earliest. Enrollees must pay premiums for 60 months 

before they are eligible to receive benefits, making 2018 the earliest date for benefit payments.

98 Kathleen Sebelius, Letter to Congress, October 14, 2011. Accessed at 

http://www.hhs.gov/secretary/letter10142011.html on October 15, 2011.
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 16

scenarios (e.g., various participation rates and rates of benefit claims) and 

alternative program features (e.g., various eligibility requirements, 

enrollment procedures, and premium levels). AoA worked with the HHS 

Office of the General Counsel to ensure that the program features under 

consideration met the requirements of the CLASS Act. 

AoA worked to determine potential premiums by estimating enrollment 

rates, enrollment demographics, and the number of active enrollees who 

would collect benefits immediately following the required 5-year vesting 

period. AoA estimated the proportion of direct enrollees likely to become

eligible for benefits.99

Because the expected number of enrollees would affect the benefit plan, 

AoA considered potential marketing strategies for the program to 

maximize enrollment. A larger enrollment would reduce the risk of having 

a disproportionate number of unhealthy enrollees, which could result in 

higher benefit costs or cause the program to be actuarially unsound. 

 

AoA Collaborated With Other Agencies and Experts

In June 2011, AoA hosted a technical expert meeting on the actuarial 

modeling of the benefit plan alternatives. This meeting included actuaries, 

economists, demographers, sociologists, ASPE staff, and AoA staff. The 

meeting addressed six major issues:

. AoA worked with 

Federal actuaries and experts in the LTC insurance field to develop the 

CLASS program. AoA incorporated the information it gathered from 

meetings with experts and actuaries into ongoing benefit plan modeling 

efforts. 

• characteristics of likely program enrollees, 

• future LTC utilization by enrollees, 

• reasonableness of key assumptions used in potential benefit plans (e.g., 

assumptions regarding interest rates, progression of disabilities, and 

morbidity), 

• expected participation levels, 

• alternative benefit plan designs to increase financial stability, and

• strategies to improve the program beyond changes to the benefit plan. 

In June 2011, AoA held a meeting with actuaries from CMS, the Social 

Security Administration, and the Office of Personnel Management. 

99 Direct enrollees are individuals who enroll through the method designed for those who are self-employed, 

have more than one employer, or have an employer that does not participate in automatic enrollment. Because 

these individuals are not automatically enrolled and must opt into the program, AoA expects them to generally

be less healthy than those who are automatically enrolled. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 17

Participants discussed various benefit plan alternatives, actuarial models 

for the program, and the actuarial certification of the program.

AoA Prepared for the Appointment of the CLASS Independence Advisory 

Council. AoA is not directly responsible for establishing the CLASS 

Independence Advisory Council but worked with the Secretary to prepare 

for the council’s appointment. The President is responsible for appointing 

members of the council. The Secretary signed a charter for the council on 

November 9, 2010. On November 16, 2010, AoA issued a Federal 

Register Notice soliciting nominees for the council by December 1, 2010, 

and sent the names to the White House.100 AoA hired a logistics 

contractor in June 2011 to organize 2- to 3-day public meetings for council 

members to attend after their appointment. 

II. Determining eligibility

The CLASS Act requires the Secretary to establish an Eligibility 

Assessment System by January 1, 2012, to provide eligibility assessments 

of active enrollees applying for benefits. AoA must establish procedures 

for determining benefit eligibility, appealing benefit eligibility denials, and 

redetermining benefit eligibility. AoA must also determine intervals at 

which beneficiaries must recertify their eligbility.

AoA examined legal issues related to establishing an Eligibility 

Assessment System

The CLASS Act requires the Secretary to establish an Eligibility 

Assessment System by January 1, 2012. However, the Secretary may wait 

until October 1, 2012, to designate a benefit plan. Because the benefit 

plan must contain details about benefit eligibility, AoA reported that 

establishing an Eligibility Assessment System should be contingent upon 

designating a benefit plan. Therefore, AoA worked with the HHS Office 

of the General Counsel on the legal issues surrounding this requirement. 

Because of the 5-year vesting period, AoA reported that 2018 is the 

earliest year active enrollees will be able to submit a claim for benefits and 

have their eligibility assessed. 

AoA must complete the following requirements pertaining to determining 

eligibility if the Secretary designates a benefit plan at a later time: 

100 75 Fed. Reg. 70005 (Nov. 16, 2010).
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 18

• to establish procedures for benefit eligibility determination, appeals to 

benefit eligibility denials, and benefit eligibility redeterminations;101

and

• to determine intervals at which beneficiaries must recertify their 

eligibility.

III. Providing quality assurance and protecting against 

waste, fraud, and abuse

The CLASS Act requires AoA to include provisions in the CLASS 

program to protect against fraud and abuse. Specifically, AoA must 

establish procedures to ensure that entities providing services to active 

enrollees and eligible beneficiaries comply with conflict-of-interest 

requirements in the law, as well as standards of conduct for authorized 

representatives of beneficiaries. 

AoA developed provisions to protect against waste, fraud, and 

abuse

AoA developed provisions in benefit plan alternatives intended to protect 

against waste, fraud, and abuse after program implementation. The 

CLASS Enhancement Plan, developed by the Chief Actuary, describes a 

potential list of excluded services and supports that beneficiaries cannot 

purchase with the cash benefit (e.g., food, liquor, housing, luxury items). 

The Enhancement Plan also describes potential reenrollment rules not 

included in the CLASS Act to prevent enrollees from repeatedly lapsing in 

premium payments and then reenrolling permanently when their health 

deteriorates.102 AoA also established and selected a head of the Office of 

Program Integrity and Compliance within the CLASS Office. 

AoA must complete the following requirements pertaining to providing 

quality assurance and protecting against waste, fraud, and abuse if the 

Secretary designates a benefit plan at a later time: 

• to establish procedures to ensure that entities providing services (e.g., 

advocacy, counseling, and planning services) to active enrollees and 

beneficiaries comply with the requirements of the law; and 

• to establish standards of conduct for authorized representatives of 

eligible beneficiaries.

101 Benefit eligibility determination and redetermination processes must require certification by a licensed 

health care practitioner. PHSA § 3205(a)(2)(B).

102 If reenrollment occurs after a lapse in premium payments of between 90 days and 5 years (beginning with 

the first month of the lapse), enrollees will receive credit for paid premiums prior to the lapse. PHSA 

§ 3203(b)(1)(C). According to AoA, enrollees could continuously allow premium payments to lapse throughout 

the 5-year vesting period and begin steadily paying premiums only when they need to receive benefits. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 19

IV. Recouping unpaid and accrued benefits

In conjunction with the Secretary of the Treasury, AoA must establish a 

mechanism to recoup benefits if a beneficiary dies or fails to collect 

deferred benefits after 12 months. Recouped benefits must be returned to 

the CLASS Independence Fund. 

AoA will establish a mechanism to recoup unpaid and accrued 

benefits if the Secretary designates a benefit plan at a later 

time

AoA reported that it planned to establish a mechanism to recoup unpaid 

and accrued benefits later in the program development process. If the 

Secretary designated a benefit plan by October 1, 2012, AoA did not 

expect to recoup benefits in the event of a beneficiary death until 2018, the 

earliest year for benefit payments. Because deferred benefits can roll over 

from month to month, but not from year to year, AoA expected to recoup 

deferred benefits in 2019 at the earliest.

CONCLUSION

At the time of our review, AoA was in the early stage of CLASS program 

planning and development and focused most of its efforts on developing at 

least three actuarially sound benefit plan alternatives. However, on 

October 14, 2011, the Secretary informed Congress that HHS cannot 

identify a benefit plan that is both actuarially sound for the next 75 years 

and consistent with the requirements of the CLASS Act. Following this 

announcement, HHS suspended program implementation. OIG will 

determine the most appropriate way to meet OIG’s CLASS Act reporting 

requirements in future years based on the program’s status. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

AoA reviewed a draft of this report and had no comments. They noted 

that the report did not contain any recommendations and that HHS has 

suspended work on the program. For the full text of AoA’s comments, see 

Appendix B. AoA provided clarifying and technical comments, which 

were incorporated into the final report. 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 20

APPENDIX A 

OIG Reporting Requirement in the CLASS Act

PHSA Sec. 3209, 42 USC § 300ll-8 

SEC. 3209. INSPECTOR GENERAL’S REPORT. 

The Inspector General of the Department of Health and Human Services 

shall submit an annual report to the Secretary and Congress relating to the 

overall progress of the CLASS program and of the existence of waste, 

fraud, and abuse in the CLASS program. Each such report shall include 

findings in the following areas:

(1) The eligibility determination process.

(2) The provision of cash benefits. 

(3) Quality assurance and protection against waste, fraud, and abuse. 

(4) Recouping of unpaid and accrued benefits. 
APPENDIX B 

Agency Comments 

,.»'U....fQJ 

/+ ~ DEPARTMENT OF HEALTH &. HUMAN SERVICES 	 Office of the Assistant Secretary 

Administration on Aging ,,-4 Washington D.C. 20201 

NOV 2~Oll 

TO: Daniel R. Levinson 

Inspector General 

FROM: Kathy Greenlee 

Assistant Secretaryfor Aging 

SUBJECT: OIG Draft Report: Community Living Assistance Services and Supports Program: 

2011 Report to Congress, OEI-04-11-00450 

Thank you for the opportunity to comment on the subject OIG draft report. We appreciate your 

staff's professionalism and collegiality in conducting this review and preparing this report. As 

stated in the report, on October 14,2011, the Secretary informed Congress that she does not see a 

viable path for implementing the CLASS program, and we have suspended work on the program. 

The draft 010 report does not contain any recommendation, and we do not have any comments on 

the report. 

The Administration on Aging would again like to thank the OIO for their work in conducting this 

review. Ifwe can be offurther assistance, please let me know. 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 21 
 

OEI-04-11-00450 The CLASS Program: 2011 Report to Congress 22

ACKNOWLEDGMENTS

This report was prepared under the direction of Dwayne Grant, Regional 

Inspector General for Evaluation and Inspections in the Atlanta regional 

office, and Jaime R. Durley, Deputy Regional Inspector General. 

Sarah Langford served as the lead analyst for this study. Other principal 

Office of Evaluation and Inspections staff from the Atlanta regional office 

who contributed to the report include Starr Kidda and Janna Sayer; central 

office staff who contributed include Heather Barton. 
Office of Inspector General

http://oig.hhs.gov

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is 

to protect the integrity of the Department of Health and Human Services (HHS) programs, as well as the

health and welfare of beneficiaries served by those programs. This statutory mission is carried out through 

a nationwide network of audits, investigations, and inspections conducted by the following operating 

components:

Office of Audit Services

The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting audits with 

its own audit resources or by overseeing audit work done by others. Audits examine the performance of 

HHS programs and/or its grantees and contractors in carrying out their respective responsibilities and are 

intended to provide independent assessments of HHS programs and operations. These assessments help 

reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS.

Office of Evaluation and Inspections

The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, Congress, 

and the public with timely, useful, and reliable information on significant issues. These evaluations focus 

on preventing fraud, waste, or abuse and promoting economy, efficiency, and effectiveness of 

departmental programs. To promote impact, OEI reports also present practical recommendations for 

improving program operations. 

Office of Investigations

The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of fraud and 

misconduct related to HHS programs, operations, and beneficiaries. With investigators working in all 

50 States and the District of Columbia, OI utilizes its resources by actively coordinating with the 

Department of Justice and other Federal, State, and local law enforcement authorities. The investigative 

efforts of OI often lead to criminal convictions, administrative sanctions, and/or civil monetary penalties.

Office of Counsel to the Inspector General

The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, rendering 

advice and opinions on HHS programs and operations and providing all legal support for OIG’s internal 

operations. OCIG represents OIG in all civil and administrative fraud and abuse cases involving HHS 

programs, including False Claims Act, program exclusion, and civil monetary penalty cases. In 

connection with these cases, OCIG also negotiates and monitors corporate integrity agreements. OCIG 

renders advisory opinions, issues compliance program guidance, publishes fraud alerts, and provides other 

guidance to the health care industry concerning the anti-kickback statute and other OIG enforcement 

authorities.