The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently released the first Semiannual Report to Congress for 2018 (Report) that discusses the OIG’s work in identifying risks, problems, abuses, deficiencies, remedies and investigative outcomes related to the administration and operation of HHS programs. The OIG’s work was completed during the reporting period from October 1, 2017 through March 31, 2018. During that time, the OIG resolved various enforcement actions through ongoing investments into data analytics capacities and infrastructures, as well as continuous audits, investigations, and evaluations of HHS programs. The Report presents the OIG’s key accomplishments and expected recoveries.
The Report includes the following key enforcement statistics:
- Expected investigative recoveries of $1.46 billion;
- Criminal actions against 424 individuals or entities that engaged in crimes against HHS programs;
- Exclusion of 1,588 individuals and entities from Federal health care programs; and
- Civil actions against 349 individuals or entities.
The OIG reviewed the following key areas in its Report, among others:
- The OIG partners with the Department of Justice (DOJ), State Medicaid Fraud Control Units (MFCU) and other federal, state and local law enforcement agencies to combat health care fraud. From its various enforcement actions, the Report highlights two significant enforcement accomplishments during the reporting period. The first significant accomplishment was a Miami home health agency owner’s conviction for conspiracy to commit health care fraud. The owner was sentenced to over six years in prison and ordered to pay $45 million in restitution, jointly and severally with her co-defendants. The second accomplishment was a drug manufacturer’s agreement to pay $210 million to resolve False Claims Act liability and enter a five-year corporate integrity agreement (CIA) to resolve allegations of paying kickbacks.
- Pursuant to the OIG’s oversight responsibility of HHS programs, the Report discusses the OIG’s effort to identify HHS program mismanagement and abuse. For the first half of Fiscal Year 2018, the OIG expected recoveries of $187.5 million and $1.5 billion in potential savings. These savings included findings related to Improper Claims for Managed Long-Term Care and Improper Electronic Health Records Incentive Payments. The OIG conducted numerous audits, two of which were significant because they identified potential Medicare overpayments during the reporting period. In the first case, the OIG found that services related to the replacement of five recalled and failed medical devices cost Medicare $7.7 million. In the second case, the OIG found that 61 percent of Medicare claims for outpatient physical therapy services did not comply with Medicare requirements.
- A top priority for the OIG is combating the opioid epidemic. As such, the OIG’s investigation and oversight focused on prescription drug abuse, including opioid abuse. The OIG used advanced data analytics and tools to investigate opioid fraud and diversion cases. One example of the OIG’s successful accomplishment in combating the opioid epidemic is when it partnered with the Attorney General, the Federal Bureau of Investigations, and the Drug Enforcement Administration on the Opioid Fraud and Abuse Detection Unit. The collaboration between these agencies resulted in the selection of 12 judicial districts around the country where the OIG assigned Special Agents to support 12 prosecutors identified by the DOJ to focus solely on investigating and prosecuting opioid-related health care fraud cases. In another example, the Report stated that co-conspirators were convicted of charges resulting from their involvement in an unlawful prescription drug operation. Patient recruiters were found bringing “patients” to the clinic to obtain medically unnecessary prescriptions for controlled substances. The physician was responsible for illegally distributing enough prescription medication to constitute more than $15 million in the black market.
- The OIG’s efforts are geared towards the prevention and detection of fraud and abuse in Medicare to safeguard health care resources and protect beneficiaries. To that end, the OIG’s work also focuses on providing critical health and human services to vulnerable populations, including adults and children in foster care and individuals receiving care in group home settings. In particular, home and community-based services are very susceptible to fraud and abuse. During the reporting period, the OIG worked with law enforcement to investigate suspected fraud committed by providers and recommend safeguards to protect taxpayers and beneficiaries. One of the OIG’s significant accomplishments in this area included the settlement agreement of the nation’s largest for-profit provider of hospice services for their alleged submission of false claims to Medicare. The organization submitted false claims to Medicare for services provided to patients who were ineligible for hospice benefits and continuous home care services that were not medically necessary, not provided or not performed pursuant to Medicare requirements.
- The Report additionally addresses the OIG’s goal to protect the integrity of Medicaid and mitigate program risks. The OIG works with state MFCUs to combat Medicaid fraud. For example, the Report states that California and New York did not correctly determine Medicaid eligibility for newly eligible beneficiaries. As a result, the OIG estimated that California made Medicaid payments of $738.2 million on behalf of over 350,000 ineligible beneficiaries. The OIG also estimated that New York made federal Medicaid payments of $26.2 million on behalf of over 45,000 ineligible beneficiaries. In addition, the OIG has a history of assessing prescription drug payment policies and procedures, including Medicare Part B and D, Medicaid and the 340B Drug Discount Program. Its efforts resulted in identified opportunities for substantial cost savings, risks, and even CIAs to resolve fraud allegations. For example, the OIG identified vulnerabilities in Arkansas’ and Arizona’s handling of physician-administered drugs and associated Medicaid rebates. In another example, the OIG found that drug manufacturers may have led to $1 billion in lost Medicaid rebates due to potential drug misclassifications.
- The OIG Report touches on the Food and Drug Administration’s (FDA) effort and challenge to ensure the safety and security of foods in the U.S. In 2011, Congress granted the FDA the authority to require firms to recall certain harmful foods. According to the Centers for Disease Control and Prevention, each year roughly 48 million people get sick from a foodborne illness, 128,000 are hospitalized and 3,000 die. The Report identifies that although the FDA has the authority to recall harmful foods, there are deficiencies in the FDA’s oversight of recall initiation, monitoring, and information that is captured and maintained in the FDA’s electronic recall data system.
- The Report illustrates the OIG’s recognition of the importance of data management, use and security for effective and efficient operation of HHS programs. As a result, the OIG will continue to expand its data power. However, this will result in the maintenance and use of expanding amounts of sensitive data. The Report emphasizes that the OIG will continue its efforts to identify and mitigate cybersecurity risks. In particular, the Report states that the OIG conducted a series of audits at four HHS Operating Divisions to determine how well HHS systems were protected. The OIG determined that configuration management and access control vulnerabilities existed and security controls would need to be improved.
- The Report includes a summary of the Centers for Medicare & Medicaid Services’ program reports and reviews. For the Medicare program section, the summary discusses reports and reviews for financial management and improper payments; quality of care, safety and access; and program integrity. For the Medicaid program section, the summary discusses reports and reviews for financial management and improper payments; quality of care, safety and access; and drug pricing and reimbursement. The Report also includes a section on Medicare and Medicaid related legal and investigative activities.
- The Report concludes with summaries of the public health agencies reports and reviews and other HHS-related reviews and investigations throughout the reporting period.
The OIG Spring 2018 Semiannual Report is available at: