U.S. Department of Health and Human Services Office of Inspector General Medicaid Fraud Control Units Fiscal Year 2020 Annual Report Suzanne Murrin Deputy Inspector General for Evaluation and Inspections March 2021, OEI-09-21-00120 U.S. Department of Health and Human Services Office of Inspector General At a Glance March 2021, OEI-09-21-00120 Medicaid Fraud Control Units Fiscal Year 2020 Annual Report Medicaid Fraud Control Units (MFCUs) investigate and prosecute Medicaid provider fraud and patient abuse or neglect. The Department of Health and Human Services Office of Inspector General (OIG) is the designated Federal agency that oversees and annually approves Federal funding for MFCUs through a recertification process. For this report, OIG analyzed the annual statistical data on case outcomes (such as convictions, civil settlements and judgments, and recoveries) that 53 MFCUs submitted to OIG for fiscal year 2020. Those MFCUs operated in all 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. In June 2020, OIG also administered a survey to all MFCUs about the effects of the COVID-19 pandemic on MFCU operations. TABLE OF CONTENTS BACKGROUND 1 Methodology 2 CASE OUTCOMES 4 MFCUs reported that the pandemic created significant challenges for staff, operations, and 4 court proceedings, which led to lower case outcomes in FY 2020 MFCUs reported 1,017 total convictions in FY 2020 5 MFCUs reported criminal recoveries of $173 million in FY 2020 9 MFCUs reported 786 civil settlements and judgments in FY 2020 9 MFCUs reported civil recoveries of $855 million in FY 2020 10 CONCLUSION 12 APPENDICES 13 A. Office of Inspector General's Priority Outcome: Maximizing the Effectiveness of Medicaid 13 Fraud Control Units B. Beneficial Practices Described in Office of Inspector General Inspection Reports 14 C. Medicaid Fraud Control Unit Case Outcomes and Open Investigation by Provider Type and 21 Case Type for Fiscal Year 2020 ACKNOWLEDGMENTS AND CONTACT 28 ABOUT THE OFFICE OF INSPECTOR GENERAL 29 ENDNOTES 30 BACKGROUND The function of Medicaid Fraud Control Units (MFCUs or Units) is to investigate and prosecute Medicaid provider fraud and patient abuse or neglect. 1 The Social Security Act (SSA) requires each State to effectively operate a MFCU, unless the Secretary of Health and Human Services (HHS) determines that (1) the operation of a Unit would not be cost-effective because minimal Medicaid fraud exists in a particular State; and (2) the State has other adequate safeguards to protect beneficiaries from abuse or neglect. 2 In fiscal year (FY) 2020, all 50 States, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands operated MFCUs. 3, 4 MFCUs are funded jointly by Federal and State Governments. Each Unit receives a Federal grant award equivalent to 90 percent of total expenditures for new Units and 75 percent for all other Units. 5 In FY 2020, combined Federal and State expenditures for the Units totaled approximately $306 million, of which approximately $230 million represented Federal funds. 6 As illustrated in Exhibit 1, MFCU cases typically begin as referrals from external sources or are generated internally from data mining. 7 MFCU staff review referrals of possible fraud and patient abuse or neglect to determine the potential for criminal prosecution and/or civil action. If the Unit accepts a referral for investigation, the case may result in various possible outcomes. Criminal prosecutions may result in convictions and civil actions may result in civil settlements or judgments. Both criminal prosecutions and civil actions may include the assessment of monetary recoveries. The Office of Inspector General (OIG) has the authority to exclude convicted individuals and entities from any federally funded health care program on the basis of convictions referred from MFCUs. 8 In addition to achieving these case outcomes, Units may also make programmatic recommendations to their respective State Governments to help strengthen program integrity and efforts to fight patient abuse or neglect. Exhibit 1: The typical life cycle of a MFCU case. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Background | 1 Oversight of the MFCU Program Reducing Medicaid fraud is a top priority for OIG, and its role in overseeing MFCUs helps achieve that priority. OIG oversees the MFCU grant program by recertifying Units, conducting reviews or inspections (hereinafter referred to as inspections) of Units, 9 providing technical assistance to Units, and monitoring key statistical data about Unit caseloads and outcomes. 10 Further, OIG has identified enhancing Medicaid program integrity-including efforts to maximize the effectiveness of MFCUs-as an OIG Priority Outcome. (See Appendix A for details.) OIG reviews each Unit's application for recertification annually-OIG's approval of this application is necessary for the Unit to receive Federal reimbursement. 11 To recertify a Unit, OIG performs a desk review to assess the Unit's compliance with the Federal requirements for MFCUs contained in statute, regulations, and OIG policy transmittals. OIG also examines the Unit's adherence to 12 performance standards, such as those regarding staffing, maintaining adequate referrals, and cooperating with Federal authorities. 12 OIG further assesses a Unit's performance by conducting inspections of Units that may identify findings and make recommendations for improvement. During an inspection, OIG also makes observations regarding Unit operations and practices, and may identify beneficial practices that may be useful to other Units. Finally, OIG provides training and technical assistance to Units, as appropriate. OIG also provides ongoing technical assistance and guidance to Units. These activities may include conducting outreach, responding to questions from the Units, providing training to Units, and issuing policy transmittals to all Units. OIG also collects and presents statistical data reported by each MFCU annually, such as the numbers of open cases, indictments, and convictions and amounts of recoveries. These data can be accessed on the OIG website in two formats: a statistical chart and an interactive map. Methodology For this report, we analyzed information from the FY 2020 Annual Statistical Reports that 53 MFCUs submitted to OIG, the recertification materials that the MFCUs submitted to OIG, and OIG exclusions data. This report also includes information collected from a survey that OIG administered to all 53 MFCUs in June 2020 about the effects of the COVID-19 pandemic (pandemic) on MFCU operations. 13 We aggregated case outcomes across all Units for FY 2020 and for each of the preceding 4 years-FYs 2016 through 2019. These outcomes include convictions, civil settlements and judgments, and recoveries. For convictions and recoveries, we calculated an average across the 5-year period of FYs 2016 through 2020. We also calculated the return on investment (ROI) for MFCUs. 14 We identified the provider types with the highest numbers of criminal and civil outcomes in FY 2020 and the numbers of exclusions that OIG imposed in FY 2020 on individuals and entities as a Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Background | 2 result of conviction referrals from MFCUs. We also analyzed MFCU drug diversion cases using data for FYs 2016 through 2020. Additionally, we highlight the beneficial practices described in each Unit's more recent inspections, as described in Appendix B. Standards We conducted this study in accordance with the Quality Standards for Inspection and Evaluation issued by the Council of Inspectors General on Integrity and Efficiency. OIG inspections of the MFCUs and this annual report differ from other OIG evaluations in that they support OIG's direct administration of the MFCU grant program, but they are subject to the same internal quality controls as other OIG evaluations, including internal and external peer review. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Background | 3 CASE OUTCOMES MFCUs reported that the pandemic created significant challenges for staff, operations, and court proceedings, which led to lower case outcomes in FY 2020 MFCUs that responded to OIG's June 2020 survey reported that the pandemic created significant challenges for staff and operations, which limited case outcomes- particularly criminal outcomes. For example, as MFCUs initially moved to a telework environment, some staff reported experiencing challenges conducting work because of limitations with computer equipment and network infrastructure. Field work was also limited. To help protect staff and members of the public from the pandemic, MFCUs reported curtailing some in-person field work, such as interviews of witnesses and suspects. These activities were further limited because of an initial lack of personal protective equipment that was needed in order to conduct similar activities in nursing homes and other facilities. According to MFCUs, these cumulative challenges slowed the progress of investigations. MFCU staff also experienced challenges involving court proceedings, which often delayed the prosecution phase of cases. MFCUs reported that, as a result of the pandemic, court systems in general had closed their in-person operations and postponed or reduced the number of grand jury proceedings, criminal jury trials, and in-person court appearances. MFCUs reported that some court systems eventually began to adopt new methods to facilitate court proceedings, such as routinely using video conferences for hearings and limiting court appearances to certain persons, such as individuals that were incarcerated. However, MFCUs reported challenges associated with initially transitioning to these new methods. For example, several MFCUs reported challenges with presenting documentary and other evidence through video and remote audio technology. Although the pandemic had a significant effect on MFCU operations and case outcomes, MFCUs reported implementing steps to mitigate the pandemic's impact. For example, MFCUs developed guidelines to ensure safe in-person interactions- both in the office and in the field-and to ensure the use of available personal protective equipment. MFCUs also developed practices for interviewing witnesses remotely. To support employee-teleworking, MFCUs reported increasing communication among staff and management through regular video meetings, using shared team calendars, and having staff complete weekly activity logs. MFCUs also established various approaches to gathering and using information about the pandemic's effect on Medicaid program integrity. Some of these approaches included establishing a pandemic Medicaid fraud working group, developing a repository for information related to the pandemic to triage allegations and efficiently allocate resources, and creating a mechanism for tracking pandemic outbreaks in nursing homes and other residential facilities. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 4 MFCUs reported 1,017 total convictions in FY 2020 Total convictions resulting from MFCU cases declined from 1,527 in FY 2019 to 1,017 in FY 2020. In FY 2020, MFCU cases resulted in 774 convictions for fraud and 243 convictions for patient abuse or neglect, similar to the distribution in previous years. Exhibit 2 shows the total number of convictions during FYs 2016 through 2020. Exhibit 2: Fraud convictions accounted for about three-quarters of all FY 2020 convictions. Source: OIG analysis of Annual Statistical Reports for FYs 2016–2020. MFCU convictions lead to the exclusion of individuals and entities from participation in federally funded health care programs, broadening the impact of those convictions. When MFCUs make referrals to OIG regarding convictions for fraud and patient abuse or neglect in their respective States, OIG has the authority to exclude those convicted individuals and entities from federally funded health care programs. Through these referrals, MFCUs help ensure that individuals and entities convicted in one State are excluded from Medicaid programs in other States, as well as from other Federal programs related to health care. 15 In FY 2020, OIG imposed a total of 2,148 exclusions on individuals and entities. MFCU cases were responsible for 928 of those exclusions imposed by OIG. In addition to these 928 MFCU-generated exclusions, MFCUs participated in a large number of joint cases with the OIG Office of Investigations that also may have resulted in exclusions. Similar to previous years, significantly more convictions for fraud involved personal care services (PCS) attendants and agencies than any other provider type Compared to other provider types, PCS attendants and agencies had the highest number of fraud convictions each year during FYs 2016 through 2020. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 5 Exhibit 3 shows the number of PCS fraud convictions, as compared to total fraud convictions, in FYs 2016–2020. Exhibit 3: Fraud convictions involving PCS attendants and agencies accounted for a significant portion of total fraud convictions in FYs 2016–2020. Source: OIG analysis of Annual Statistical Reports for FYs 2016–2020. In FY 2020, fraud convictions involving PCS attendants and agencies accounted for 360 of the total 774 fraud convictions (47 percent). Additional information on the prevalence of Medicaid fraud involving PCS and efforts to combat such fraud can be found in OIG's 2020 Top Management and Performance Challenges Facing HHS (page 14). Exhibit 4 shows the provider types with the most fraud convictions in FY 2020. See Appendix C for detailed statistics on the number of convictions and recovery amounts for criminal cases, as well as MFCU caseloads and outcomes by provider type. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 6 Exhibit 4: Convictions of PCS attendants and agencies for fraud were significantly higher than for any other provider type in FY 2020. *LPN=Licensed Practical Nurse, RN=Registered Nurse, NP=Nurse Practitioner, and PA=Physician Assistant. Source: OIG analysis of FY 2020 Annual Statistical Reports. MFCUs reported 146 convictions from drug diversion cases in FY 2020 MFCU convictions related to drug diversion declined from 206 in FY 2019 to 146 in FY 2020, and associated criminal recoveries totaled $3.16 million in FY 2020. In a Medicaid context, drug diversion cases generally involve the fraudulent billing of Medicaid for drugs diverted from legal and medically necessary uses, or the fraudulent activities by Medicaid providers related to drug diversion regardless of whether the Medicaid program was billed. 16 MFCUs may conduct drug diversion investigations jointly with other State or Federal agencies, such as OIG or the U.S. Drug Enforcement Administration. Exhibit 5 shows the number of convictions associated with drug diversion cases during FYs 2016 through 2020. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 7 Exhibit 5: Convictions from drug diversion cases rose steadily each year before the pandemic. Source: OIG analysis of Annual Statistical Reports for FYs 2016–2020. In FY 2020, more convictions for patient abuse or neglect involved nurse's aides or nurses than any other provider type In FY 2020, convictions of nurse's aides or nurses accounted for 103 of the total 243 convictions for patient abuse or neglect (42 percent). Exhibit 6 shows the provider types with the most convictions for patient abuse or neglect. Exhibit 6: In FY 2020, convictions of nurse's aide and nurses for patient abuse or neglect were higher than any other provider type. *CNA=Certified Nurse Assistant. Source: OIG analysis of FY 2020 Annual Statistical Reports. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 8 MFCUs reported criminal recoveries of $173 million in FY 2020 MFCU criminal recoveries declined from $305 million in FY 2019 to $173 million in FY 2020. Total criminal recoveries varied over the 5-year period ending in FY 2020. There was a significant spike in criminal recoveries during FY 2017, which elevated the average for FYs 2016 through 2020 (see Exhibit 7). The spike in criminal recovery amounts in FY 2017 was a result of a single, large fraud case with a recovery amount totaling $268 million. 17 Exhibit 7: Criminal recoveries varied during FYs 2016 through 2020. Source: OIG analysis of Annual Statistical Reports for FYs 2016–2020. As an example of a case that resulted in criminal recoveries, the Ohio MFCU worked with Federal partners to prosecute six defendants for health care fraud conspiracy. The defendants billed Medicaid $48 million for services related to drug and alcohol recovery, many of which were not provided, were not medically necessary, or lacked proper documentation. The court ordered the defendants to pay approximately $43 million in restitution, with sentences ranging from 1 year of probation to 7.5 years in prison. 18 MFCUs reported 786 civil settlements and judgments in FY 2020 In contrast to the decline of criminal convictions in FY 2020, the total number of civil settlements and judgments increased from 658 in FY 2019 to 786 in FY 2020. 19 As shown in Exhibit 8, the total number of civil settlements and judgments increased in FY 2020 after a steady decline since FY 2016. Similar to FY 2019, more civil settlements and judgments involved pharmaceutical manufacturers than any other provider type in FY 2020. The number of pharmaceutical civil settlements and judgment increased in FY 2020, accounting for 263 of the 786 civil settlements and judgments (33 percent). Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 9 Exhibit 8: The total number of civil settlements and judgments increased in FY 2020, after declining from FY 2016 to FY 2019. Source: OIG analysis of Annual Statistical Reports for FYs 2016–2020. Medical device manufacturers had the second-highest level of civil settlements and judgments (see Exhibit 9). Exhibit 9: Pharmaceutical manufacturers had the highest number of civil settlements and judgments in FY 2020, followed by medical device manufacturers. *DMEPOS=Durable Medical Equipment, Prosthetics, Orthotics and Supplies. Source: OIG analysis of FY 2020 Annual Statistical Reports. MFCUs reported civil recoveries of $855 million in FY 2020 In FY 2020, civil recoveries decreased by 48 percent, from $1.6 billion in FY 2019 to $855 million. As shown in Exhibit 10, civil recoveries were substantially higher in FY 2016 and FY 2019, relative to other years. 20 In FY 2016, over half of the civil recoveries were attributable to two global cases that totaled $982 million. In FY 2019, Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 10 two global cases accounted for a significant portion of the civil recoveries and totaled more than $1.3 billion. Exhibit 10: Civil recoveries in FY 2020 were slightly lower than the average for FYs 2016-2020. Large monetary settlements or judgments may contribute to annual variability. Note: Dollar values are rounded to the nearest tenth. Source: OIG analysis of Annual Statistical Reports for FYs 2016-2020. The distribution of global and nonglobal cases in Types of Civil Cases FY 2020 remained similar to the distribution of A global case involves both the FY 2019. Approximately $637 million (or Federal Government and a group 74 percent) of the $855 million in civil recoveries of States and is coordinated by derived from global cases. 21 The remaining the National Association of $218 million (26 percent) derived from nonglobal Medicaid Fraud Control Units. cases. A nonglobal case is conducted by In one global case involving a pharmaceutical a Unit-individually or with other manufacturer, 28 States partnered with Federal law enforcement partners-and is agencies to pursue allegations that the not coordinated by the National Association of Medicaid Fraud pharmaceutical manufacturer provided kickbacks Control Units. to health care practitioners in exchange for prescribing medications that treat hypertension or Type 2 Diabetes. As a result of the investigation, the pharmaceutical manufacturer agreed to pay a total of $678 million-$103 million of which was related to State Medicaid programs. 22 Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Case Outcomes | 11 CONCLUSION The pandemic created significant challenges for MFCU staff, operations, and court proceedings. However, MFCUs reported taking steps to mitigate the effects of the pandemic and, despite challenges, continued to carry out their Medicaid program integrity functions in FY 2020. Overall, MFCUs' efforts in FY 2020 contributed to total recoveries of $1 billion, with an ROI of $3.36 for every $1 spent. MFCUs reported implementing practices to address the challenges caused by the pandemic, a few of which we highlight in the "Case Outcomes" section in this report. As in past MFCU annual reports, Appendix B describes the many beneficial practices implemented by the MFCUs identified by OIG during our inspections, which other MFCUs may want to consider for adoption. Beneficial practices from inspection reports published in FY 2020 include the following: • Designating staff as subject matter experts: The Arkansas Unit director designated Unit investigators as subject matter experts of specific, common provider types for efficient assignment and improved investigation of cases. • Creating in-house training videos: The Missouri Unit's Chief Auditor created in-house training videos for Unit investigators and attorneys. The videos contained step-by-step tutorials for creating and using investigative and trial tools. • Participating in an Elder Abuse Task Force to provide training to law enforcement and first responders: To encourage referrals, the Montana Unit regularly trained cadets at the Montana Law Enforcement Academy and trained other law enforcement and first responder personnel through its participation in the Montana Elder Abuse Task Force. The training focused on the Unit's mission and how the Unit can assist with crimes that law enforcement personnel and first responders might encounter. In addition to identifying beneficial practices to spur continued improvement, OIG annually recognizes the efforts of one MFCU with the Inspector General's Award for Excellence in Fighting Fraud, Waste, and Abuse. In 2021, the Maine MFCU received this award for its high number of case outcomes across a mix of case types, excellent partnership with OIG and other Federal partners, and active participation in the National Association of Medicaid Fraud Control Units' activities. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Conclusion | 12 APPENDIX A Office of Inspector General's Priority Outcome: Maximizing the Effectiveness of Medicaid Fraud Control Units It is a top OIG priority to strengthen the effectiveness of MFCUs as key partners in combating fraud and abuse. As part of its oversight, OIG strives to support the MFCUs in ways that maximize their effectiveness. Over the past few years, OIG has engaged in numerous actions to help drive MFCU effectiveness. These include activities in five categories: (1) enhancing OIG oversight; (2) increasing the use of data; (3) expanding the MFCU program to better align with a growing and evolving Medicaid program; (4) enhancing MFCU training where it can be of greatest assistance to MFCUs; and (5) increasing collaboration between MFCUs and OIG. To assess the impact of these efforts, OIG has established two key performance indicators: (1) indictment rate and (2) conviction rate. The table below shows these rates for FYs 2016 through 2020 and the targets that OIG aims to achieve in FYs 2021 through 2022. Key Performance FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Indicators (actual) (actual) (actual) (actual) (actual) Target Target Indictment Rate 16.3% 17.2% 16.7% 18.8% 17.2% 19.0% 18.4% Conviction Rate 89.6% 88.7% 89.8% 90.3% 87.7% 89.1% 89.0% Calculations: Indictment rate = (total number of criminal cases with indictments or charges plus number of nonglobal civil cases open, filed, or referred for filing) divided by (total number of open cases) Conviction rate = (total number of criminal cases resulting in a defendant convicted) divided by (total number of cases resulting in a defendant acquitted, dismissed, or convicted) To calculate these measures, OIG aggregates data that Units submit through Annual Statistical Reports. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix A | 13 APPENDIX B Beneficial Practices Described in Office of Inspector General Inspection Reports This appendix summarizes MFCU practices that OIG has highlighted as being beneficial to Unit operations. Other Units should consider whether adopting similar practices in their States may yield similar benefits. All of OIG's MFCU reports are available at https://oig.hhs.gov/reports-and- publications/oei/m.asp#mfcu. A Unit takes steps to maintain an adequate volume and quality of referrals STANDARD 4 from the State Medicaid agency and other sources. Arizona Engaging with Medicaid partners and providing guidance to ensure quality OEI-07-15-00280 referrals: MFCU staff attended quarterly meetings with the State Medicaid December 2015 agency and Managed Care Organizations (MCOs). These meetings provided guidance to MCOs about what constitutes a quality referral and the types of referrals that will result in the Unit opening a case for investigation. California Providing training to MCO representatives to increase fraud referrals: The OEI-09-15-00070 Unit provided quarterly training for MCO representatives that resulted in February 2016 increased fraud referrals from MCOs to the Unit. Hiring an outreach liaison to increase referrals: The Unit hired a field representative to provide outreach and increase the number of fraud referrals sent to the Unit. The field representative acted as a liaison between the Unit and other State agencies, and trained staff from these agencies about Medicaid fraud and the Unit's role in combating fraud and patient abuse or neglect by providers. Kansas Supplementing reviews of referrals for patient abuse or neglect and OEI-12-18-00210 enhancing referral coordination: The Unit's nurse investigator reviewed July 2019 complaints about patient abuse or neglect that had been previously closed by the State's survey and certification agency to determine whether the complaints warranted further investigation. In addition, the nurse investigator arranged for the Unit to receive complaints of patient abuse or neglect at the same time the State's survey and certification agency sent the complaints to local law enforcement agencies. After reviewing the complaints, the nurse investigator contacted the law enforcement agencies to help determine whether further investigation by those agencies or the Unit was warranted. continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 14 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) A Unit takes steps to maintain an adequate volume and quality of referrals STANDARD 4 from the State Medicaid agency and other sources. (continued) Kentucky Engaging with Medicaid partners to encourage fraud referrals and enhance OEI-06-17-00030 collaboration: The Unit regularly met with the State Medicaid agency, other September 2017 State agencies, and MCOs to encourage fraud referrals and improve communication and collaboration. The results included improved quality, completeness, and timeliness of fraud referrals. Michigan Co-developing a streamlined process for referring patient abuse or neglect OEI-09-13-00070 cases with a State licensing agency: Unit management and the Michigan January 2014 Department of Licensing and Regulatory Affairs developed a streamlined process for referring cases of patient abuse or neglect. This process helped to ensure that referrals from the Department of Licensing and Regulatory Affairs were consistent with the Unit's statutory functions, thereby promoting Unit efficiency. Montana Participating in an Elder Abuse Task Force to provide training to law OEI-12-19-00170 enforcement and first responders: To encourage referrals, the Unit regularly March 2020 trained cadets at the Montana Law Enforcement Academy and trained other law enforcement and first responder personnel through its participation in the Montana Elder Abuse Task Force. The training focused on the Unit's mission and how the Unit can assist with crimes that law enforcement personnel and first responders might encounter. New York Establishing data analytics working groups to improve the Unit's ability to OEI-12-17-00340 data mine: The Unit established data analytics working groups to provide September 2018 guidance, training, and an assessment of the Unit's data mining efforts. The groups include the Data Analytics Tool Group, the Data Sources Groups, the Fraud and Abuse Group, and the Governance Group. New Mexico Co-developing a referral process with the State Medicaid agency to ensure OEI-09-14-00240 receipt of referrals: Unit management and the State Medicaid agency worked February 2015 closely to develop and implement an improved referral process that ensures that the Unit receives all appropriate fraud referrals generated by MCOs. Ohio Establishing a program integrity group comprised of personnel from other OEI-07-14-00290 Medicaid program integrity entities: The Unit established the Ohio Program April 2015 Integrity Group, which combines the knowledge and resources of all the State agencies that are responsible for Medicaid program integrity. In addition, the Unit spearheaded the Managed Care Program Integrity Group, which meets quarterly. continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 15 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) A Unit takes steps to maintain an adequate volume and quality of referrals STANDARD 4 from the State Medicaid agency and other sources. (continued) Oregon Establishing an outreach group to increase referrals for patient abuse or OEI-09-16-00200 neglect cases from broader areas of the State: The Unit created a group that December 2016 provided outreach to help increase referrals for patient abuse or neglect and facilitate Unit work in broader areas of the State. This group provided outreach about the Unit's mission and legal authorities by establishing Unit liaisons for each county in Oregon and attending multidisciplinary team meetings at the county level. South Dakota Having providers teach their peers about implications of Medicaid fraud: OEI-07-16-00170 The Unit used providers who had previously been investigated for Medicaid September 2016 fraud to educate their peers. These providers gave presentations alongside Unit staff at training conferences-this helped to highlight Medicaid billing issues and the implications of Medicaid fraud. Washington Revising its MOU and contracts with State Medicaid partners to ensure the OEI-09-16-00010 receipt of fraud referrals from MCOs: The Unit worked with the State September 2016 Medicaid agency to revise both the memorandum of understanding between the Unit and the agency and the agency's contracts with MCOs to ensure that the Unit received copies of all fraud referrals from MCOs. A Unit takes steps to maintain a continuous case flow and to complete STANDARD 5 cases in an appropriate timeframe based on the complexity of the cases. Arkansas Designating staff as subject matter experts: The Unit director designated Unit OEI-12-19-00450 investigators as subject matter experts of specific, common provider types for September 2020 efficient assignment and improved investigation of cases. New York Developing a strategic plan to optimize and prioritize resources: The Unit OEI-12-17-00340 developed a written strategic plan to help Unit staff make informed decisions September 2018 regarding the optimal use of resources. The plan provides guidance to prioritize certain types of investigations, such as criminal investigations that are related to systematic patient abuse and neglect, fraud allegations against managed care companies, and fraud investigations of large providers. The plan also establishes a priority for false claims investigations with higher potential for monetary recoveries or risk of patient harm. Ohio Establishing a technical support team: The Unit employed a special projects OEI-07-14-00290 team to provide technical support to all its investigative teams. April 2015 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 16 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) A Unit maintains case files in an effective manner and develops a case STANDARD 7 management system that allows efficient access to case information and other performance data. Massachusetts Using an intranet system to streamline case management: The Unit used its OEI-07-15-00390 intranet system to streamline its administrative processes, such as periodic June 2016 supervisory reviews of case files. The Unit found that this helped improve case management and the effectiveness of investigations and prosecutions. A Unit cooperates with OIG and other Federal agencies in the STANDARD 8 investigation and prosecution of Medicaid and other health care fraud. Alaska Improving communication with stakeholders to increase joint cases with OEI-09-16-00430 Federal partners: Unit stakeholders reported that the MFCU Director made September 2017 efforts to improve communication with agencies such as OIG and the State Medicaid agency. As a result, the number of joint OIG-MFCU cases tripled from FY 2012 to FY 2015. Also, the Unit collaborated with Federal and State partners to investigate allegations of PCS fraud that led to convictions and significant monetary recoveries. California Co-locating Unit and OIG staff to facilitate referrals and communication: OEI-09-15-00070 Unit investigators have workstations at an OIG field office-this facilitated the February 2016 mutual referral of cases and improved communication and cooperation with OIG on joint cases. Florida Co-locating Unit and OIG staff to improve cooperation on joint cases: Unit OEI-07-15-00340 staff have workstations at an OIG field office-this improved communication June 2016 and cooperation with OIG on joint cases, including fraud cases generated through the U.S. Department of Justice (DOJ) Medicare Strike Force. Idaho Monitoring media sources to report convictions of providers to OIG: The OEI-12-18-00320 Unit's legal secretary monitored media sources for convictions of patient August 2019 abuse and neglect cases. Although the convictions were a result of investigations by local authorities and not the Unit, the legal secretary reviewed the conviction information and submitted the police reports and court documents to OIG. As a result of those efforts, OIG has excluded seven individuals from federally funded health programs. Massachusetts Developing partnerships with law enforcement and clinical experts to OEI-07-15-00390 investigate drug cases: The Unit developed partnerships with other State and June 2016 Federal agencies and used clinical experts to facilitate the investigation and prosecution of drug diversion and pharmaceutical cases. continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 17 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) A Unit cooperates with OIG and other Federal agencies in the STANDARD 8 investigation and prosecution of Medicaid and other health care fraud. (continued) Virginia Developing partnerships with agencies composed of diverse professional OEI-07-15-00290 disciplines: The Unit's partnerships with the Food and Drug Administration, the August 2016 Internal Revenue Service, and the Social Security Administration led to successful Medicaid fraud prosecutions, particularly with regard to pharmaceutical manufacturers, and increased Unit recoveries. A Unit makes statutory or programmatic recommendations, when STANDARD 9 warranted, to the State government. Alaska Making program integrity recommendations to fight PCS fraud: The Unit OEI-09-16-00430 made program integrity recommendations to safeguard against PCS provider September 2017 fraud, and worked with the State Medicaid agency to implement these recommendations. Minnesota Developing legislation to protect Medicaid beneficiaries from abuse: The OEI-06-13-00200 Unit helped develop legislation to protect Medicaid beneficiaries by March 2014 strengthening background checks for individuals who serve as guardians and conservators of Medicaid beneficiaries. New Mexico Partnering with the Medicaid agency to revise MCO contracts and improve OEI-09-14-00240 referral coordination: The Unit consistently provided program integrity February 2015 recommendations to the State Medicaid agency during quarterly joint protocol meetings. One of these recommendations resulted in the inclusion of language in MCO contracts that clarified the State Medicaid agency role in referring to the MFCU all "verified" allegations of fraud, waste, or abuse in a managed care setting. Washington Using information from a case closure form to make program integrity OEI-09-16-00010 recommendations to State agencies: The Unit used a case closure form to September 2016 make numerous program integrity recommendations to State agencies and tracked the responses to these recommendations in a database. STANDARD 12 A Unit conducts training that aids in the mission of the Unit. Kentucky Implementing a mentoring program to develop Unit attorneys: The Unit OEI-06-17-00030 created an executive advisor position to help Unit attorneys develop litigation September 2017 skills. The executive advisor also mentored new attorneys and served as a cochair on Unit prosecutions. continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 18 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) STANDARD 12 A Unit conducts training that aids in the mission of the Unit. (continued) Maryland Developing an internal boot camp to train new staff: The Unit developed an OEI-07-16-00140 internal "boot camp" training program that helped new staff develop a full September 2016 understanding of the Unit's work. Experienced MFCU staff gave 1- to 2-hour lectures on topics such as civil and criminal investigation procedures, interviewing techniques, and understanding medical codes. Missouri Creating in-house training videos: The Unit's Chief Auditor created in-house OEI-12-18-00490 training videos for Unit investigators and attorneys. The videos contained step- January 2020 by-step tutorials for creating and using investigative and trial tools. New York Using a moot-court approach for training attorneys: The Unit used moot- OEI-12-17-00340 court training to train Unit attorneys. This training helped the Unit attorneys September 2018 practice opening arguments to prepare for trial. North Carolina Partnering with another State agency to establish an academy for financial OEI-07-16-00070 investigators: The Unit partnered with another State agency to create the September 2016 North Carolina Financial Investigators Academy. The academy provided instruction to financial investigators on topics such as elements of criminal law, search and seizure procedures, interviewing, and testifying. The Unit required all its newly hired financial investigators to attend the academy, regardless of previous experience. Wyoming Using staff from another MFCU to train a new investigator: The Unit used a OEI-09-16-00530 MFCU investigator from a neighboring State to help train its newly hired September 2017 investigator. As part of the training, the newly hired investigator observed work on active Medicaid fraud cases and met with the MFCU's management and attorneys from the neighboring State to discuss progress. This was a cost- effective training option for the Unit and furthered a positive working relationship with the neighboring MFCU. continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 19 Beneficial Practices Described in Office of Inspector General Inspection Reports (continued) Beneficial practices not relating directly to a specific performance OTHER standard. Vermont Co-developing provider focus teams with the State Medicaid agency to OEI-02-13-00360 improve program integrity: The Unit director created provider focus teams in December 2013 collaboration with the State Medicaid agency. These teams facilitated existing cases, developed training for providers, and made program recommendations. Co-developing a working group with State and Federal partners to improve health care for the elderly: The Unit director helped create the Vermont Elder Justice Working Group, which consisted of representatives from State and Federal advocacy groups, regulatory agencies, and law enforcement agencies. The group's mission was to improve health care for the elderly living in long- term care facilities by improving communication among stakeholders and law enforcement agencies. Virginia Using specialty software to better analyze, maintain, and share OEI-07-15-00290 documentary evidence: The Unit used specialty software designed to read the August 2016 text in a document, analyze it for keywords, and systematically code it according to criteria established by an analyst. This improved the Unit's abilities to process and track evidence collected during investigations and to share that evidence with Federal and State partners working on joint cases. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix B | 20 APPENDIX C Medicaid Fraud Control Unit Case Outcomes and Open Investigations by Provider Type and Case Type for Fiscal Year 2020 Exhibit C1: Number of convictions, settlements and judgments, and recoveries by provider type and case type CRIMINAL CIVIL Settlements Amount of and Amount of PROVIDER TYPE Convictions Recoveries Judgments Recoveries Patient Abuse or Neglect Assisted Living Facility 8 $45,093 1 $4,788 Developmental Disability Facility 10 $13,956 1 $0 Hospice 0 $0 0 $0 Nondirect Care Staff 10 $79,421 0 $0 Nurse Aide (CNA or Other) 56 $282,430 0 $0 Nursing Facilities 11 $55,069 9 $1,366,143 Nurse (LPN, RN, or NP) or Physician 47 $59,574 0 $0 Assistant Personal Care Aide or Other Home 39 $323,264 0 $0 Care Aide Other 62 $1,485,814 1 $144,440 Fraud-Facility-Based Medicaid Providers and Programs-Inpatient and/or Residential Assisted Living Facility 1 $1,147,322 2 $577,506 Developmental Disability Facility 1 $37,075 0 $0 (Residential) Hospice 2 $347,035 2 $1,282,364 Hospital 10 $23,679,690 44 $50,697,061 Inpatient Psychiatric Services for 0 $0 12 $20,163,475 Individuals under Age 21 Nursing Facility 1 $0 9 $23,895,840 Other Inpatient Mental Health Facility 0 $0 23 $10,336,054 Other Long-Term Care Facility 0 $0 4 $423,604 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 21 Number of convictions, settlements and judgments, and recoveries by provider type and case type (continued) CRIMINAL CIVIL Settlements Amount of and Amount of PROVIDER TYPE Convictions Recoveries Judgments Recoveries Fraud-Facility-Based Medicaid Providers and Programs-Outpatient and/or Day Services Adult Day Center 1 $32,633 4 $661,119 Ambulatory Surgical Center 0 $0 1 $5,613 Developmental Disability Facility 2 $68,425 2 $40,349 (Nonresidential) Dialysis Center 0 $0 0 $0 Mental Health Facility (Nonresidential) 21 $10,255,952 11 $17,373,695 Substance Abuse Treatment Center 9 $24,799,396 7 $4,738,537 Other Facility (Nonresidential) 8 $1,911,689 7 $3,993,545 Fraud-Licensed Practitioners Audiologist 0 $0 0 $0 Chiropractor 1 $100,180 1 $30,418 Clinical Social Worker 10 $1,943,242 4 $628,193 Dental Hygienist 0 $0 3 $131,154 Dentist 13 $2,560,572 18 $4,932,636 Nurse (LPN, RN, or Other Licensed) 52 $1,161,395 6 $246,432 Nurse Practitioner 9 $7,170,015 1 $11,156 Optometrist 1 $95,000 1 $6,073 Pharmacist 11 $7,074,522 1 $171,713 Physician Assistant 2 $2,390 0 $0 Podiatrist 1 $57,240 1 $366,125 Psychologist 7 $1,378,172 2 $43,511 Therapist (Non-Mental Health, PT, ST, 7 $1,151,551 3 $96,118 OT, or RT) Other Practitioner 12 $911,342 9 $742,815 Fraud-Medical Services Ambulance 2 $851,987 1 $385,000 Billing Services 4 $1,193,307 7 $3,156,236 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 22 Number of convictions, settlements and judgments, and recoveries by provider type and case type (continued) CRIMINAL CIVIL Settlements Amount of and Amount of PROVIDER TYPE Convictions Recoveries Judgments Recoveries Fraud-Medical Services (continued) Home Health Agency 21 $4,948,195 9 $15,195,008 Lab (Clinical) 0 $0 19 $4,133,672 Lab (Radiology and Physiology) 0 $0 2 $16,176 Lab (Other) 1 $257,500 4 $1,882,218 Medical Device Manufacturer 0 $0 54 $3,123,112 Pain Management Clinic 2 $1,331,324 7 $4,274,810 Personal Care Services Agency 21 $4,700,311 7 $3,190,996 Pharmaceutical Manufacturer 0 $0 263 $549,147,525 Pharmacy (Hospital) 0 $0 0 $0 Pharmacy (Institutional Wholesale) 0 $0 6 $6,710,024 Pharmacy (Retail) 17 $6,573,002 34 $20,366,201 Suppliers of Durable Medical 5 $4,214,477 45 $2,567,637 Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Transportation (Nonemergency) 20 $7,192,516 7 $11,672,105 Other 8 $399,633 42 $15,329,992 Fraud-Other Individual Providers Emergency Medical Technician or 1 $3,604 0 $0 Paramedic Nurse's Aide (CNA or Other) 11 $33,224 0 $0 Optician 0 $0 1 $263,489 Personal Care Services Attendant 339 $6,065,610 10 $48,663 Pharmacy Technician 4 $201,747 0 $0 Unlicensed Counselor (Mental Health) 11 $1,232,139 2 $59,000 Unlicensed Therapist (Non-Mental 2 $4,367 0 $0 Health) Other 53 $12,900,713 2 $9,099 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 23 Number of convictions, settlements and judgments, and recoveries by provider type and case type (continued) CRIMINAL CIVIL Settlements Amount of and Amount of PROVIDER TYPE Convictions Recoveries Judgments Recoveries Fraud-Physicians (MD/DO) by Medical Specialty Allergist/Immunologist 0 $0 0 $0 Cardiologist 1 $9,662 2 $1,154,369 Emergency Medicine 4 $5,405 0 $0 Family Practice 22 $27,154,788 11 $3,550,748 Geriatrician 0 $0 0 $0 Internal Medicine 11 $1,895,411 5 $1,129,229 Neurologist 1 $3,100 1 $253,273 Obstetrician/Gynecologist 2 $25,864 3 $252,725 Ophthalmologist 1 $24 3 $1,540,423 Pediatrician 2 $72,555 1 $50,000 Physical Medicine and Rehabilitation 1 $48,030 1 $2,007,377 Psychiatrist 4 $531,104 6 $1,523,751 Radiologist 0 $0 0 $0 Surgeon 0 $0 2 $348,130 Urologist 0 $0 1 $150,000 Other MD/DO 16 $3,081,223 7 $1,700,435 Fraud-Program Related Managed Care Organization (MCO) 0 $0 21 $48,728,862 Medicaid Program Administration 0 $0 0 $0 Other 5 $34,336 10 $7,770,320 TOTAL 1,017 $173,194,614 786 $854,801,084 Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 24 Exhibit C2: Number of open investigations at the end of FY 2020 by provider type and case type OPEN INVESTIGATIONS PROVIDER TYPE Criminal Civil Total Patient Abuse or Neglect Assisted Living Facility 241 6 247 Developmental Disability Facility 161 5 166 Hospice 3 0 3 Nondirect Care Staff 126 0 126 Nurse Aide (CNA or Other) 426 5 431 Nursing Facilities 863 52 915 Nurse (RN, LPN, or NP) or Physician Assistant 313 1 314 Personal Care Aide or Other Home Care Aide 270 0 270 Other 843 6 849 Fraud-Facility-Based Medicaid Providers and Programs-Inpatient and/or Residential Assisted Living Facility 57 11 68 Developmental Disability Facility (Residential) 41 6 47 Hospice 76 34 110 Hospital 75 202 277 Inpatient Psychiatric Services for Individuals under 11 12 23 Age 21 Nursing Facility 136 209 345 Other Inpatient Mental Health Facility 19 39 58 Other Long-Term Care Facility 29 29 58 Fraud-Facility-Based Medicaid Providers and Programs-Outpatient and/or Day Services Adult Day Center 76 4 80 Ambulatory Surgical Center 3 8 11 Developmental Disability Facility (Nonresidential) 31 14 45 Dialysis Center 0 68 68 Mental Health Facility (Nonresidential) 354 59 413 Substance Abuse Treatment Center 140 51 191 Other Facility (Nonresidential) 103 66 169 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 25 Exhibit C2: Number of open investigations at the end of FY 2020 by provider type and case type (continued) OPEN INVESTIGATIONS PROVIDER TYPE Criminal Civil Total Fraud-Licensed Practitioners Audiologist 6 2 8 Chiropractor 26 6 32 Clinical Social Worker 80 6 86 Dental Hygienist 2 3 5 Dentist 309 52 361 Nurse (LPN, RN, or Other Licensed) 491 7 498 Nurse Practitioner 83 5 88 Optometrist 33 9 42 Pharmacist 62 23 85 Physician Assistant 31 0 31 Podiatrist 27 10 37 Psychologist 61 17 78 Therapist (Non-Mental Health, PT, ST, OT, or RT) 92 32 124 Other Practitioner 132 15 147 Fraud-Medical Services Ambulance 60 42 102 Billing Services 31 79 110 Home Health Agency 674 130 804 Lab (Clinical) 104 490 594 Lab (Radiology and Physiology) 22 41 63 Lab (Other) 36 193 229 Medical Device Manufacturer 4 666 670 Pain Management Clinic 57 21 78 Personal Care Services Agency 197 10 207 Pharmaceutical Manufacturer 161 2,690 2,851 Pharmacy (Hospital) 1 4 5 Pharmacy (Institutional Wholesale) 11 227 238 Pharmacy (Retail) 320 911 1,231 Transportation (Nonemergency) 254 25 279 Suppliers of Durable Medical Equipment, Prosthetics, 177 569 746 Orthotics, and Supplies (DMEPOS) Other 79 341 420 continued on the next page Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 26 Exhibit C2: Number of open investigations at the end of FY 2020 by provider type and case type (continued) OPEN INVESTIGATIONS PROVIDER TYPE Criminal Civil Total Fraud-Other Individual Providers Emergency Medical Technician or Paramedic 3 1 4 Nurse Aide (CNA or Other) 72 1 73 Optician 1 6 7 Personal Care Services Attendant 1,719 16 1,735 Pharmacy Technician 21 0 21 Unlicensed Counselor (Mental Health) 69 5 74 Unlicensed Therapist (Non-Mental Health) 6 1 7 Other 441 48 489 Fraud-Physicians (MD/DO) by Medical Specialty Allergist/Immunologist 8 3 11 Cardiologist 15 13 28 Emergency Medicine 17 26 43 Family Practice 277 31 308 Geriatrician 1 0 1 Internal Medicine 147 23 170 Neurologist 29 4 33 Obstetrician/Gynecologist 26 5 31 Ophthalmologist 17 12 29 Pediatrician 46 8 54 Physical Medicine and Rehabilitation 32 13 45 Psychiatrist 87 18 105 Radiologist 9 17 26 Surgeon 32 13 45 Urologist 3 3 6 Other MD/DO 338 82 420 Fraud-Program Related Managed Care Organization (MCO) 22 84 106 Medicaid Program Administration 23 11 34 Other 164 118 282 Total 11,645 8,075 19,720 Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Appendix C | 27 ACKNOWLEDGMENTS AND CONTACT Acknowledgments Matt DeFraga served as the team leader for this study, and Kira Evsanaa served as the lead analyst. Office of Evaluation and Inspections (OEI) staff who provided support include Susan Burbach, Jordan Clementi, Kevin Farber, Christina Lester, Petra Nealy, and Keith Peters. We would also like to acknowledge the contributions of other Office of Inspector General (OIG) staff, including Alexis Crowley, Lonie Kim, Tracy Meder, Jessica Swanstrom, and Angela Tvarozek. This report was prepared under the direction of Blaine Collins, Regional Inspector General for Evaluation and Inspections in the San Francisco regional office, and Abby Amoroso and Michael Henry, Deputy Regional Inspectors General, in consultation with Richard Stern, Director of the Medicaid Fraud Policy and Oversight Division. Contact To obtain additional information concerning this report, contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. OIG reports and other information can be found on the OIG website at oig.hhs.gov. Office of Inspector General U.S. Department of Health and Human Services 330 Independence Avenue, SW Washington, DC 20201 Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Acknowledgments and Contact | 28 ABOUT THE OFFICE OF INSPECTOR GENERAL 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: 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 audits help reduce waste, abuse, and mismanagement and promote economy and efficiency throughout HHS. 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. 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. 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. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 About OIG | 29 ENDNOTES 1 Social Security Act (SSA) § 1903(q)(3)–(4). Regulations at 42 CFR § 1007.11(b)(1) add that a Unit's responsibilities may include reviewing complaints of misappropriation of patients' private funds in residential health care facilities. Unit investigations of patient abuse and neglect are limited to incidents occurring in (1) health care facilities that receive Medicaid payments and (2) board and care facilities, which are residential settings that receive payments on behalf of two or more unrelated adults who reside in the facility and receive nursing care services or a substantial amount of personal care services (PCS). SSA § 1903(q)(4). As of December 27, 2020, MFCUs may also receive Federal financial participation to investigate and prosecute abuse or neglect of Medicaid beneficiaries in a noninstitutional or other setting. Consolidated Appropriations Act, 2021, P.L. No. 116-260, Division CC, § 207. 2 SSA § 1902(a)(61). 3 The SSA authorizes the Secretary of HHS to award grants (SSA § 1903(a)(6)) and to certify and annually recertify Units (SSA § 1903(q)). The Secretary delegated this authority to OIG. See also 42 CFR § 1007.15. Units must meet several requirements established by the SSA and Federal regulations. For example, each Unit must (1) be a single, identifiable entity of State Government, separate and distinct from the State Medicaid agency (SSA § 1903(q)(2); 42 CFR §§ 1007.5(a) and 1007.9(a)); (2) employ an interdisciplinary staff that consists of at least an investigator, an auditor, and an attorney (SSA § 1903(q)(6); 42 CFR § 1007.13); (3) develop a formal agreement, such as a memorandum of understanding, describing the Unit's relationship with the State Medicaid agency (42 CFR § 1007.9(d)); and (4) have either statewide authority to prosecute cases or formal procedures to refer suspected criminal violations to an agency with such authority (SSA § 1903(q)(1); 42 CFR § 1007.7). 4The territories of American Samoa, Guam, and the Northern Mariana Islands have not established Units. Puerto Rico and the U.S. Virgin Islands received certification to operate in FY 2019 and North Dakota received certification to operate in FY 2020. 5SSA § 1903(a)(6). For a Unit's first 3 years of operation, the Federal Government contributes 90 percent of funding and the State contributes 10 percent. Thereafter, the Federal Government contributes 75 percent and the State contributes 25 percent. 6 OIG's analysis of MFCU Annual Statistical Reports from FY 2020. 742 CFR § 1007.20. MFCUs must receive approval from OIG to conduct data mining. As of February 2021, 21 MFCUs were approved for data mining. OIG, Data Mining Applications, https://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/data- mining.asp. Accessed on February 2, 2021. 8SSA § 1128; 42 U.S.C. § 1320a-7. See also OIG, Background Information, https://oig.hhs.gov/exclusions/background.asp. Accessed on March 12, 2021. 9These inspections were conducted onsite before the COVID-19 pandemic. Because of the pandemic, OIG has since conducted inspections in a remote, virtual format. 10 OIG provides information on MFCU operations and outcomes but does not direct or encourage MFCUs to investigate or prosecute a specific number of cases. MFCU investigators and prosecutors should apply professional judgment and discretion in determining what criminal and civil cases to pursue. 11 42 CFR § 1007.15. 12 MFCU performance standards are published at 77 Fed. Reg. 32645 (June 1, 2012). 13The survey collected information about (1) operational challenges that the MFCUs may have encountered during the pandemic, (2) how MFCUs addressed those challenges, and (3) practices that helped MFCUs address those challenges. In addition, the survey collected information from MFCUs about their broader needs for training. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Endnotes | 30 14To calculate the ROI for MFCUs, we first calculated the total recoveries by adding the $173 million in criminal case recoveries to the $855 million in civil case recoveries. We then divided the $1 billion in total recoveries by the total MFCU grant expenditures of $306 million, resulting in the overall ROI of $3.36 for every $1 spent. 15OIG, LEIE Downloadable Databases, https://oig.hhs.gov/exclusions/exclusions_list.asp. Accessed on January 22, 2021. The list of OIG-excluded individuals or entities can be found on the OIG website. 16OIG, State Fraud Policy Transmittal 2020-3, MFCU Authority to Receive Federal Funding to Investigate and Prosecute Diversion and Misuse of Pharmaceuticals, October 28, 2020. This transmittal describes the situations when Units are eligible to receive Federal financial participation to investigate and prosecute drug diversion cases. 17 One large, 268-million-dollar case prosecuted in FY 2017 accounted for about 39 percent of all criminal recoveries in FY 2017. The Texas MFCU prosecuted this case, which involved a doctor and other codefendants who defrauded Medicaid and Medicare by improperly recruiting individuals and falsifying medical documents. 18United States Department of Justice, Last of Six Sentenced in Scheme to Defraud Medicaid of Millions, June 16, 2020. https://www.justice.gov/usao-ndoh/pr/last-six-sentenced-scheme-defraud-medicaid-millions. Accessed on February 9, 2021. 19 Our data collection did not identify a specific cause for the rise in civil case outcomes, but one explanation could have been efforts to refocus prosecutive and court resources on civil cases during a time when criminal court proceedings were curtailed or stayed. 20 The spikes in civil recoveries in FYs 2016 and 2019 significantly elevated the average for civil recoveries in FYs 2016–2020. 21To calculate the percentages for civil global and nonglobal recoveries, we used the total civil recoveries of $854,801,085 and rounded the dollar value to the nearest tenth. Total civil recoveries accounted for $855 million and global cases accounted for $637 million in FY 2020. 22Wisconsin Department of Justice, $678 Million National Kickback Settlement with Novartis Pharmaceuticals, September 24, 2020. https://www.doj.state.wi.us/sites/default/files/news-media/9.21.20_Novartis.pdf. Accessed on February 8, 2021. Medicaid Fraud Control Units Fiscal Year 2020 Annual Report OEI-09-21-00120 Endnotes | 31