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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently released its first Semiannual Report (Report) to Congress for 2019.  The Report discusses the OIG’s work in identifying risks, problems, abuses, deficiencies, remedies, and investigative outcomes related to the administration and operation of HHS programs between October 1, 2018 and March 31, 2019.  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 includes the following key enforcement statistics:
  • The OIG issued 71 audits and 10 evaluations, resulting in 212 new audit and evaluation recommendations;
  • The OIG implemented 186 recommendations made by HHS operating divisions;
  • It expects audit recoveries of $496 million;
  • The OIG expects to identify $247 million in costs questioned by the OIG because of an alleged violation, unsupported or inadequate documentation, or expenditure of funds where the intended purpose is unnecessary or unreasonable;
  • The OIG reports potential savings of $777 million to HHS programs discovered through audit;
  • It expects investigative recoveries of $2.3 billion;
  • The OIG took criminal actions against 421 individuals or entities;
  • It took civil actions against 331 individuals or entities; and
  • The OIG excluded 1,293 individuals and entities from federal health care programs.
OIG highlights its key initiatives and focus areas in the report:
  • Affirmative Litigation Cases Under the Civil Monetary Penalties Law (CMPL): The CMPL authorizes the OIG to impose administrative penalties, assessments, and exclusions against a person who submits, or causes to be submitted, claims to a federal healthcare program that the person knows, or should know, are false or fraudulent. One case example involves Millennium Health, LLC f/k/a Millennium Laboratories, Inc. (Millennium) in Michigan, which entered into a False Claims Act settlement in 2015 to resolve allegations that Millennium provided free point of care urine drug testing cups (POCT cups) to physicians in exchange for the physicians’ agreement to return the urine specimens to Millennium for additional testing provided by and billed to federal healthcare programs.  The allegations violated the Anti-Kickback Statute and the Prohibition on Certain Physician Referrals. Since September 2017, the OIG has also pursued affirmative litigation actions against physicians, physician practices, and other providers based on their alleged unlawful receipt of free POCT cups from Millennium during the relevant timeframe, leading to the recovery of more than $2 million.  Recently, Recovery Pathways, LLC (Recovery), a drug and alcohol rehabilitation center, agreed to pay the OIG $64,555 to resolve allegations that it solicited and received remuneration in the form of POCT cups from Millennium.
  • Preventing and Treating Opioid Misuse: The OIG utilizes data analytics and other investigative tools to help combat the opioid crisis. OIG uses its criminal, civil, and administrative enforcement authority to prevent fraud.  One example of an OIG enforcement action that was taken to combat the opioid epidemic includes an action against a California physician assistant that received a 10-year prison sentence on 39 counts of unlawful distribution of controlled substances.
  • Protecting Children in the Department’s Care: The Office for Refugee Resettlement (ORR), as part of the HHS Administration for Children and Families (ACF) is responsible for providing shelter and care of unaccompanied alien children that have been transferred from the Department of Homeland Security’s custody. ORR found that the number of children separated from their parents or guardians was unknown.  It also reported that two now closed UAC facilities did not conduct required fingerprint background checks for staff, and a UAC facility did not properly document the care and release of 13 percent of children released in 2015.
  • Ensuring Quality of Care and Protecting Patients from Harm: The OIG prioritizes ensuring that patients receive a high quality of care and that patients are protected from harm.  It uses enforcement actions, audits, and reviews to work toward these priorities.  One OIG enforcement action example from the reporting period involved action against a physician that was convicted of health care fraud for implanting medically unnecessary pacemakers into his patients.  The physician then billed for the unnecessary procedures and follow-up care.
  • Ensuring Program Integrity and Effective Administration of Medicare: Medicare spent nearly $700 billion on 58.4 million beneficiaries in FY 2017.  The 2018 Annual Report to the Board of Trustees also estimated that the Medicare Part A Trust Fund will be depleted by 2026, with Medicare Part B spending growing at an annual rate of approximately 8.2 percent over the next five years.  That rate will outpace the projected growth of the U.S. economy, which is expected to grow at a 4.7 percent annual rate during that time.  The OIG worked to identify improper payments and foster more prudent payment during the reporting period to help alleviate these issues.  The OIG took enforcement action against providers misusing Medicare dollars, recommended ways to reduce improper payments to skilled nursing facilities (SNFs), discovered vulnerabilities associated with the hospital wage index system, and discovered duplicative payments for transportation and unallowable non-emergency transportation services.
  • Ensuring Program Integrity and Effective Administration of Medicaid: The OIG and states continue to focus on protecting Medicaid integrity by combatting fraud, waste, and abuse. The OIG continues to make recommendations to CMS and states on ways to ensure program integrity and effectiveness.  During the reporting period, the OIG recommended that CMS recover $1.6 billion due to the Federal Government in Medicaid overpayments.  The OIG also examined states’ use of hospital tax programs as a funding source for the states’ shares of Medicaid expenditures.
  • Protecting HHS Data, Systems, and Beneficiaries from Cybersecurity Threats: The OIG has acted to ensure the security of HHS IT systems and the personal information and data collected and maintained by HHS programs.  One OIG review recommended that the National Institutes of Health (NIH) develop a security framework, conduct a risk assessment, and implement additional security controls over genomic data following a finding that the NIH had not assessed national security risks when permitting foreign principal investigators to access U.S. genomic data.  The OIG has also examined states’ responses to Medicaid data breaches during the review period.
  • Protecting HHS Grant and Contract Integrity– The OIG oversaw the $109 billion in HHS grants awarded for FY 2018. This oversight led to the OIG recommending that HHS take actions to address program integrity vulnerabilities in the Small Business Innovation Research (SBIR) program funding.  The OIG also found improper reimbursements to Centers for Disease Control and Prevention (CDC) contractors in the World Trade Center Health Program that totaled $8 million.

The OIG Report is available at:

https://oig.hhs.gov/reports-and-publications/archives/semiannual/2019/2019-spring-sar.pdf

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