Department of Health and Human Services OFFICE OF INSPECTOR GENERAL CHALLENGES APPEAR TO LIMIT STATES’ USE OF MEDICAID PAYMENT SUSPENSIONS Daniel R. Levinson Inspector General September 2017 OEI-09-14-00020 Report in Brief  September 2017  OEI‐09‐14‐00020    Why OIG Did This Review  Challenges Appear to Limit States’ Use of  State Medicaid agencies (Medicaid  Medicaid Payment Suspensions  agencies) are required to suspend  payments for health care items and  What OIG Found  services when there is a credible  Most Medicaid agencies (41 of 56) reported  Key Takeaway allegation of fraud against the  imposing 10 or fewer payment suspensions  provider, unless “good cause” exists  during FY 2014.  Medicaid agencies reported  Significant challenges  not to suspend payment.  Using  significant challenges associated with imposing  experienced by Medicaid  payment suspensions, when  agencies appear to have  payment suspensions.  These include:    appropriate, is important to protect  prevented the Federal  Medicaid funds: payment suspensions   demonstrating sufficient evidence to  payment suspension  support payment suspensions when  provisions from achieving  based on credible allegations of fraud  providers appealed,  their full potential to  can swiftly stop the flow of Medicaid  protect Medicaid funds.   not jeopardizing law enforcement  dollars to providers defrauding  investigations when providers appealed,  Medicaid.  A payment suspension can  and  remain in place throughout a law   sustaining payment suspensions through lengthy fraud  enforcement investigation and  investigations, without unintentionally driving innocent  potential prosecution of a health care  providers out of business.  fraud case.      Medicaid agencies often applied “good cause exceptions,” during  How OIG Did This Review  which payments are not suspended, while law enforcement  We collected self‐reported individual  investigated a credible allegation of fraud against a provider.   case data for credible allegations of  Additionally, Medicaid agencies reported taking actions that  fraud, payment suspensions, and good  improved their processes for payment suspensions, including how  cause exceptions during Federal fiscal  they handle fraud allegations and collaborate with law  year (FY) 2014 from Medicaid agencies.   enforcement.  We also surveyed both Medicaid  agencies and Medicaid Fraud Control  What OIG Recommends and Agency Response    We recommend that the Centers for Medicare & Medicaid  Units regarding challenges and benefits  Services provide additional technical assistance to help Medicaid  of payment suspensions that are based  agencies fully utilize Medicaid payment suspensions as a program  on a credible allegation of fraud.    integrity tool.  CMS concurred with our recommendation.      Full report can be found at http://oig.hhs.gov/oei/reports/oei‐09‐14‐00020.asp   TABLE OF CONTENTS Objective ......................................................................................................1 Background ..................................................................................................1 Methodology ................................................................................................6 Findings........................................................................................................7 Most Medicaid agencies imposed few payment suspensions based on credible allegations of fraud, reporting 10 or fewer suspensions in FY 2014 ...................................................................7 Medicaid agencies experienced significant challenges with imposing payment suspensions ........................................................8 Medicaid agencies often applied good cause exceptions .................9 Medicaid agencies improved their processes for implementing payment suspensions, including how they handle credible allegations of fraud and collaborate with law enforcement ...........10 Conclusion and Recommendation .............................................................12 Agency Comments and Office of Inspector General Response .................13 Appendix A: State Medicaid Agency FY 2014 Data .....................14 Appendix B: Agency Comments ...................................................17 Acknowledgments......................................................................................19 OBJECTIVE To examine State Medicaid agencies’ (Medicaid agencies’) and Medicaid Fraud Control Units’ (MFCUs’) experiences with payment suspensions when there is a credible allegation of fraud against a health care provider. BACKGROUND A payment suspension is a program integrity tool for States to stop, as early as possible, Medicaid payments when there is a credible allegation of fraud against a provider.1 When a Medicaid agency determines that a credible allegation of fraud exists, the agency must suspend all or part of the Medicaid payments to the provider while law enforcement investigates and potentially prosecutes the provider, unless “good cause” exists not to suspend payment. Credible Allegation of Fraud The Centers for Medicare & Medicaid Services (CMS) generally describes allegations as credible “when they have indicia of reliability and the State Medicaid agency has reviewed all allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis.”2 To accommodate variations among States, the regulations allow Medicaid agencies “flexibility to determine what constitutes a ‘credible allegation of fraud’ consistent with individual State law.”3 Before determining that an allegation of fraud is credible, a Medicaid agency must conduct a preliminary investigation and may informally consult with MFCUs or other State agencies or law enforcement.4, 5 Allegations of fraud may come from a variety of sources, such as through a Medicaid agency’s analysis of provider billing data, fraud hotline tips, and law enforcement agencies.6 When a Medicaid agency determines that a credible allegation of fraud exists, Federal regulations require the agency to either impose a payment 1 In this report, we use the term “States” to refer collectively to the 50 States, the District of Columbia, and the U.S. Territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands. 2 42 CFR § 455.2. 3 76 Fed. Reg. 5935 (February 2, 2011). 4 42 CFR § 455.14. 5 CMS, Medicaid Payment Suspension Toolkit. Accessed at http://www.cms.gov/Medicare-Medicaid-Coordination/Fraud- Prevention/FraudAbuseforProfs/Downloads/medicaid-paymentsuspension-toolkit- 0914.pdf on May 11, 2017. 6 42 CFR § 455.2. 1 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) suspension or apply an exception indicating that “good cause” exists not to suspend payments.7, 8 Additionally, by no later than the next business day, the Medicaid agency must refer the case for investigation to the State’s MFCU (or other appropriate law enforcement agency if the State does not have a MFCU).9, 10 The MFCU can then accept the referral and begin an investigation, or decline to investigate the provider. If the MFCU declines, then the Medicaid agency must either discontinue the payment suspension or find another law enforcement agency to investigate.11 See Exhibit 1 on the next page for a general overview of the process. Medicaid Payment Suspension When Medicaid agencies impose a payment suspension, Federal regulations specify that they must notify providers of the payment suspension, the temporary nature of the payment suspension, and an appeals process. Notice of payment suspension to provider. Generally, within 5 days of imposing the payment suspension, regulations require Medicaid agencies to send a notice of the payment suspension to the provider. The notice can be delayed up to 90 days if the MFCU provides a written request to delay notification. The notice must include (1) the legal basis for the payment suspension, (2) the general nature of the fraud allegation (but not specific information concerning an ongoing investigation), and (3) the applicable State administrative appeals process and corresponding citations to State law, among others.12 Length of payment suspensions. Federal implementing regulations describe payment suspensions as temporary.13 According to these regulations, the payment suspensions will not continue after authorities determine that there is insufficient evidence of provider fraud or legal proceedings related to alleged fraud are complete.14 Federal regulations do not further define the length of payment suspensions, other than that they are “temporary.” 7 P.L. No. 111-148, § 6402(h) codified at Social Security Act (SSA) § 1903(i)(2)(C). Federal regulations were amended effective March 25, 2011. 42 CFR § 455.23. 8 A Medicaid agency can apply a good cause exception and then later impose a payment suspension (or vice versa) for the same credible allegation of fraud. 9 42 CFR § 455.23(d). 10 MFCUs operate in 49 States and the District of Columbia, except North Dakota and all of the U.S. territories. 11 42 CFR § 455.23(d). Some States may have also State-specific authority to impose a payment suspension outside of the Federal authority that is the subject of this report. 12 42 CFR § 455.23(b). 13 SSA § 1903(i)(2)(C); 42 CFR § 455.23(c). 76 Fed. Reg. 5933 (February 2, 2011). 14 42 CFR § 455.23(c). 2 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Exhibit 1. General Overview of States’ Processes For Credible Allegations of Fraud This exhibit illustrates a general overview of the payment suspension process; it does not represent all potential outcomes or State-specific processes. 3 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Provider appeals of payment suspensions. If an individual State’s law provides for an administrative appeals process, the provider may request, and must be granted, a review of the payment suspension consistent with the State’s appeals process.15 In general, when a provider appeals a payment suspension, a State administrative court holds a hearing and may either uphold or overturn the payment suspension.16 Good Cause Exception On a case-by-case basis, a Medicaid agency may determine that there is good cause not to suspend payments when there is a credible allegation of fraud against a provider, and instead apply a “good cause exception.”17 For example, law enforcement officials may request that the Medicaid agency not impose a payment suspension to avoid alerting the provider, which could jeopardize a law enforcement investigation.18 When a Medicaid agency applies a good cause exception, providers continue to be paid (i.e., payments are not suspended) and providers are not notified that they are under investigation. Law Enforcement Investigations Law enforcement investigations of credible allegations of fraud continue whether a Medicaid agency imposes a payment suspension or applies a good cause exception. On a quarterly basis, the Medicaid agency must request certification from the MFCU or other applicable law enforcement agency of the continuing investigation.19 The MFCU or other applicable law enforcement agency may resolve the investigation in several ways. The investigation continues until (1) appropriate legal action is initiated, (2) the case is closed or dropped because of insufficient evidence to support the allegation of fraud, or (3) the matter is resolved between the Medicaid agency and the provider.20 Federal regulations do not impose a time limit on law enforcement investigations. 15 42 CFR § 455.23. 16 For the purposes of this report, we use the term “State administrative court” to refer to the administrative law judges, administrative hearing officers, hearing commissions, and other State court authorities that may judge the legality of payment suspensions in a given State. 17 SSA § 1903(i)(2)(C); 42 CFR § 455.23(e)-(f). 18 42 CFR § 455.23(e)-(f). 19 42 CFR § 455.23(d)(3)(ii); CMS, Medicaid Payment Suspension Toolkit. Accessed at http://www.cms.gov/Medicare-Medicaid-Coordination/Fraud- Prevention/FraudAbuseforProfs/Downloads/medicaid-paymentsuspension-toolkit- 0914.pdf on May 11, 2017. 20 42 CFR § 455.16(a)-(c). 4 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) CMS Oversight of Medicaid Payment Suspensions CMS conducts oversight of Medicaid agencies’ use of payment suspensions in several ways. CMS collects selected data related to payment suspensions, provides technical assistance, and issues guidance. Annually, CMS collects data such as the number of payment suspensions, good cause exceptions, and referrals to law enforcement from each Medicaid agency.21 CMS also provides technical assistance to Medicaid agencies upon request. Further, in March 2011 and October 2014, CMS issued guidance to States about the Federal payment suspension regulations. In 2011, CMS published an informational bulletin addressing questions about implementation of the Federal payment suspension regulations, such as potential sources of credible allegations of fraud.22 In 2014, CMS published a toolkit that includes additional information on the payment suspension process, such as whether a State may rely on the MFCU to determine if an allegation of fraud is credible. It also outlines factors and steps that Medicaid agencies may consider if a payment suspension creates access to care issues for beneficiaries.23 Office of Inspector General Related Work The Office of Inspector General (OIG) initiated a series of reviews to determine whether Medicaid agencies imposed Medicaid payment suspensions when there is a credible allegation of fraud against a provider in accordance with the Federal regulations. OIG found that the Medicaid agencies in Arkansas, Pennsylvania, Minnesota, and Louisiana complied with the Federal regulations and properly suspended payments when there was a credible allegation of fraud against a provider.24 However, OIG found that the Medicaid agencies in Washington, Ohio, New Jersey, and Florida did not fully comply with the Federal payment suspension regulations and OIG recommended these States address the identified areas of noncompliance.25 21 42 CFR § 455.23(g)(3), 76 Fed. Reg. 5939 (February 2, 2011). 22 CMS, CPI-B 11-04, CPI-CMCS Informational Bulletin. Accessed at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu/files/payment-suspensions- info-bulletin-3-25-2011.pdf on May 11, 2017. 23 CMS, Medicaid Payment Suspension Toolkit. Accessed at http://www.cms.gov/Medicare-Medicaid-Coordination/Fraud- Prevention/FraudAbuseforProfs/Downloads/medicaid-paymentsuspension-toolkit- 0914.pdf on May 11, 2017. 24 OIG, multiple State-specific reports during 2014–2016. Accessed at www.oig.hhs.gov. Reference numbers: A-06-15-00026 (Arkansas), A-03-14-00202 (Pennsylvania), A-05- 14-00009 (Minnesota), (A-06-16-00010) (Louisiana). 25 OIG, multiple State-specific reports during 2014–2016. Accessed at www.oig.hhs.gov. Reference numbers: A-09-14-02018 (Washington), A-05-14-00008 (Ohio), A-02-13- 01046 (New Jersey), and A-04-14-07046 (Florida). 5 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) METHODOLOGY We collected and examined case data for allegations of fraud that Medicaid agencies determined to be credible during Federal fiscal year (FY) 2014 (October 1, 2013–September 30, 2014). We surveyed both Medicaid agencies and MFCUs (collectively referred to as respondents). We collected and examined challenges and benefits that the respondents described as relating to the various steps in the payment suspension process, such as determining whether allegations of fraud were credible, imposing payment suspensions, and applying good cause exceptions. Data Collection and Analysis Credible allegation of fraud case data. We requested that Medicaid agencies report certain data elements to OIG associated with credible allegations of fraud during FY 2014. We sent our contacts an Excel spreadsheet to record the data elements for each credible allegation of fraud case, such as whether the Medicaid agency imposed a payment suspension, applied a good cause exception, and made a referral to law enforcement. We compiled and calculated aggregate numbers for the data elements across all Medicaid agencies, including the number of credible allegations of fraud, payment suspensions, and good cause exceptions. We received responses from all 56 Medicaid agencies. Survey data. We surveyed all 56 Medicaid agencies and all 50 MFCUs to learn about their experiences related to the payment suspension process from March 2011 until the completion of OIG’s data collection in October 2015. We sent the Medicaid agency survey to the individual that each Medicaid agency identified as its primary contact for this review. We sent the MFCU survey to the MFCU directors. We received responses from all 106 respondents during August–October 2015. We synthesized the survey data and conducted qualitative analysis to identify the most significant challenges and benefits identified by respondents, based on their experiences in using the payment suspension process in their States. Limitations The survey data that Medicaid agency and MFCU respondents submitted and the case data Medicaid agencies submitted was self-reported. We generally did not verify the accuracy or completeness of the self-reported data submitted by respondents. 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. 6 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) FINDINGS Most Medicaid agencies imposed few payment suspensions based on credible allegations of fraud, reporting 10 or fewer suspensions in FY 2014 Despite the potential of payment suspensions to help prevent taxpayer- funded Medicaid dollars from being paid when there is a credible allegation of fraud against a provider, each of 41 Medicaid agencies reported imposing 10 or fewer payment suspensions in FY 2014. Furthermore, only 2 Medicaid agencies reported imposing over 50 payment suspensions each. Exhibit 2 displays the distribution of payment suspensions across States for FY 2014. See Appendix A for State-level Medicaid data on payment suspensions, credible allegations of fraud, and good cause exceptions in FY 2014. Exhibit 2. States’ Medicaid Payment Suspensions in FY 2014 3 States, 21-50 Payment 10 States, Suspensions 11-20 Payment Suspensions 2 States, 51+ Payment Suspensions 41 States, 0-10 Payment Suspensions Source: OIG analysis of payment suspension data from 56 Medicaid agencies, 2017. Thirty-one Medicaid agencies reported 10 or fewer credible allegations of fraud in FY 2014 (see Appendix A). Because determining an allegation to be credible is a prerequisite for imposing a payment suspension, Medicaid agencies in these States consequently imposed few payment suspensions. Further, credible allegations of fraud identified by Medicaid agencies are an important source of fraud referrals for MFCUs, OIG, and other law enforcement agencies responsible for investigating and prosecuting providers who defraud Medicaid. 7 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) For allegations of fraud that Medicaid agencies determined to be credible, many agencies reported using more good cause exceptions than payment suspensions. Of the combined 1,308 credible allegations of fraud in FY 2014 across all States, Medicaid agencies reported:  631 good cause exceptions (48 percent) and  360 payment suspensions (28 percent). For 124 (9 percent) credible allegations of fraud, Medicaid agencies reported using both payment suspensions and good cause exceptions. For the remaining 193 (15 percent) credible allegations of fraud, Medicaid agencies reported that they did not use any good cause exceptions or payment suspensions.26 Medicaid agencies experienced significant challenges with imposing payment suspensions Both Medicaid agency and MFCU respondents described a variety of challenges associated with imposing payment suspensions based on a credible allegation of fraud. Challenge: Demonstrating a sufficient level of evidence to support payment suspensions when providers appealed Respondents indicated that State administrative courts (courts) sometimes expected the Medicaid agency to present a higher level of evidence of provider fraud, rather than basing its determination on whether the allegation of fraud was simply “credible,” as defined in Federal regulations. When Medicaid agencies used the credible allegation of fraud threshold and providers appealed the payment suspensions, courts sometimes ruled in favor of the providers by overturning the payment suspension, citing a lack of evidence to support the payment suspension. Challenge: Not jeopardizing ongoing law enforcement investigations when providers appealed Medicaid agencies explained that when a provider appeals, it is sometimes necessary to present a level of evidence that can risk compromising the fraud case. Imposing a payment suspension alerts a provider to the investigation, but if a provider appeals, Medicaid agencies could face additional concerns. Through the appeals’ discovery process, providers can receive copies of investigative reports and other evidence gathered by 26 Medicaid agencies may not have imposed a payment suspension or applied a good cause exception because they continued to investigate an open credible allegation of fraud case, they determined that there was insufficient evidence of fraud (and therefore, did not further pursue the allegation), or the MFCU or other law enforcement entity did not accept the referral to investigate the allegation. 8 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) MFCUs. Access to details of the investigation can give fraudulent providers an opportunity to alter or remove incriminatory evidence before the MFCU can secure it. Challenge: Sustaining payment suspensions through lengthy fraud investigations without driving innocent providers out of business Medicaid agencies pointed to a contradiction between the description of payment suspensions as “temporary” and the reality that health care law enforcement investigations are often lengthy. Federal regulations specify that payment suspensions are temporary enforcement actions that Medicaid agencies are to impose while MFCUs or other law enforcement entities investigate the fraud allegations. However, respondents pointed out that law enforcement investigations often take many months, and sometimes years. Investigations can involve multiple steps, such as interviewing witnesses, implementing search warrants, filing subpoenas, and coordinating with other law enforcement agencies. In light of this, respondents reported that courts sometimes overturned payment suspensions, ruling that the suspensions were in place too long to reasonably be considered “temporary.” Respondents also described that lengthy payment suspensions can result in providers going out of business because of a loss of revenue. This outcome would be appropriate or desirable in a case when the evidence demonstrates that the provider was actually defrauding the program. However, this outcome is particularly harmful to providers when their payments are suspended but law enforcement ultimately decides not to prosecute. Medicaid agencies often applied good cause exceptions Medicaid agencies more frequently applied good cause exceptions than imposed payment suspensions in FY 2014. Given the challenges associated with payment suspensions based on credible allegations of fraud, respondents explained that good cause exceptions enable MFCUs to build a sufficient level of evidence to support payment suspensions, prevent jeopardizing law enforcement investigations, and do not limit patient access to services provided by health care providers. Medicaid agencies often applied a good cause exception at the request of law enforcement (61 percent of exceptions in FY 2014) to avoid alerting providers that investigations are underway. Imposing a payment suspension and sending the required notice to providers, in contrast, would alert providers to the investigation. “Law enforcement request” 9 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) exceptions allow time for investigators to gather more evidence to support subsequent payment suspensions or to bring criminal charges against providers. Once fraudulent providers are aware of investigations, respondents explained that those providers may alter or destroy records, expatriate or hide funds, or close their practices before law enforcement can execute search warrants and seize evidence. Medicaid agencies also explained that they applied good cause exceptions when a payment suspension would limit beneficiaries’ access to health care services. Imposing a payment suspension can risk beneficiaries’ access to services because providers may stop offering services if their business is severely hurt by the revenue loss from the payment suspension. For example, Medicaid agencies might apply a good cause exception on a provider practicing in a rural area where the provider is the sole source of essential specialized services in that area. Medicaid agencies can use two types of good cause exceptions in situations like these, either the “not in the best interest of the State” exception (20 percent of exceptions in FY 2014) or the “access to care” exception (1 percent of exceptions in FY 2014).27 Medicaid agencies improved their processes for implementing payment suspensions, including how they handle credible allegations of fraud and collaborate with law enforcement Despite the challenges associated with payment suspensions, Medicaid agencies indicated that during our review period they took steps to improve their internal processes for addressing credible allegations of fraud. Respondents explained that their agencies developed more formal structures for responding to credible allegations of fraud and suspending payments or applying good cause exceptions. Specifically, some Medicaid agencies improved particular aspects of State processes, such as the timing of various steps in the process, how credible allegations are to be referred to the MFCU, and under what circumstances to delay payment suspensions or end good cause exceptions if the investigations did not reveal actual fraud. Medicaid agencies indicated that they more clearly understand how and when to suspend payments, and the specific roles of the Medicaid agency and MFCU in the payment suspensions process. 27 The other good cause exceptions used in FY 2014 include other remedies (9 percent); law enforcement declines to certify (5 percent); provider supplied evidence (2 percent); and multiple exceptions (3 percent). Percentages of good cause exception types do not sum to 100 percent because of rounding. 10 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Medicaid agencies and MFCUs engaged in greater collaboration with each other. Respondents described more frequent and substantial communication, such as informal and regularly scheduled meetings to discuss providers suspected of fraud. Medicaid agencies and MFCUs worked together to determine whether allegations were credible, decide whether (and when) to suspend a payment, and prepare for provider appeal hearings. For example, one Medicaid agency described its coordination with the MFCU to impose a payment suspension on the same day as the MFCU executed a search warrant at the provider’s facility. This level of collaboration ensured that the provider was not alerted in advance of the search warrant. 11 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) CONCLUSION AND RECOMMENDATION Federal payment suspension regulations afford State Medicaid agencies and their law enforcement partners flexibility in determining how to deal with credible allegations of fraud. Required by Federal regulations to either impose a payment suspension or apply a good cause exception, Medicaid agencies more frequently opted for good cause exceptions. While this choice may allow States to avoid the challenges they experience with imposing payment suspensions, good cause exceptions permit payments to continue to providers under investigation for fraud. Ideally, Medicaid agencies would find ways to overcome the stated challenges that still allow them to fully utilize payment suspensions to stop swiftly the flow of Medicaid dollars to providers defrauding Medicaid. CMS has issued regulations and guidance for implementing payment suspensions, including the 2014 toolkit to help Medicaid agencies make judicious, case-by-case decisions about credible allegations of fraud. To maximize protection of the Medicaid program, we recommend that CMS: Provide additional technical assistance to help Medicaid agencies fully utilize Medicaid payment suspensions as a program integrity tool Because of the various experiences and challenges that States encountered imposing Medicaid payment suspensions, CMS should provide additional technical assistance to Medicaid agencies. To accomplish this, CMS should examine the annual data submitted by Medicaid agencies and identify those agencies that have a low number of payment suspensions based on credible allegations of fraud. CMS should provide additional technical assistance to these Medicaid agencies to help them fully utilize payment suspensions as a program integrity tool. For example, CMS may advise Medicaid agencies to work with their law enforcement partners to identify the earliest time at which a payment suspension would no longer jeopardize the fraud investigation, thereby preventing further waste of Medicaid funds. 12 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL RESPONSE CMS concurred with OIG’s recommendation. CMS stated that it will continue to provide technical assistance to Medicaid agencies on the use of the payment suspension tool and will follow up when appropriate to determine if additional technical assistance is needed. In providing additional technical assistance in response to the findings of this report, CMS should prioritize the delivery of technical assistance to those State agencies that have a low number of payment suspensions based on credible allegations of fraud. For the full text of CMS’s comments, see Appendix B. 13 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) APPENDIX A: STATE MEDICAID AGENCY FY 2014 DATA* Credible Payment Good Cause Medicaid Agency** Allegations of Suspensions Exceptions Fraud Alabama 7 6 2 Alaska 20 20 0 Arizona 5 5 0 Arkansas 40 9 37 American Samoa 0 0 0 California 45 22 21 Colorado 4 1 4 Connecticut 15 6 5 Delaware 0 0 0 D.C. 9 1 0 Florida 5 4 5 Georgia 17 1 17 Guam 0 0 0 Hawaii 7 1 5 Idaho 7 2 4 Illinois 16 5 8 Indiana 2 2 0 Iowa 145 20 101 Kansas 4 3 2 Kentucky 27 3 22 Louisiana 128 5 122 Maine 2 0 2 Maryland 17 12 6 Massachusetts 21 2 17 Michigan 39 12 8 Minnesota 60 17 0 14 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Credible Payment Good Cause Medicaid Agency** Allegations of Suspensions Exceptions Fraud Mississippi 9 2 8 Missouri 87 28 59 Montana 3 1 1 Nebraska 21 3 21 Nevada 7 0 0 New Hampshire 1 1 0 New Jersey 13 11 2 New Mexico 6 6 3 New York 135 16 129 North Carolina 57 11 42 North Dakota 6 6 0 N. Mariana Islands 0 0 0 Ohio 32 30 32 Oklahoma 2 0 2 Oregon 6 6 0 Pennsylvania 2 2 2 Puerto Rico 19 8 0 Rhode Island 7 4 2 South Carolina 9 5 0 South Dakota 0 0 0 Tennessee 7 7 0 Texas 70 70 30 U.S. Virgin Islands 0 0 0 Utah 12 12 0 Vermont 25 5 19 Virginia 5 5 0 Washington 104 69 13 15 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Credible Payment Good Cause Medicaid Agency* Allegations of Suspensions Exceptions Fraud West Virginia 2 2 0 Wisconsin 12 12 0 Wyoming 7 3 2 TOTAL 1308 484*** 755*** * The case data that Medicaid agencies submitted was self-reported. Generally, OIG did not verify the accuracy or completeness of the self-reported case data submitted by Medicaid agencies. ** American Samoa, Delaware, Guam, the Northern Mariana Islands, South Dakota, and the U.S. Virgin Islands did not have any Medicaid payment suspension data to submit. ***The total number of payment suspensions and good cause exceptions include 124 cases with both payment suspensions and good cause exceptions. Source: OIG analysis of credible allegation of fraud data from 56 Medicaid agencies, 2017. 16 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) APPENDIX B Agency Comments 17 Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) 18 ACKNOWLEDGMENTS Linda Min served as the team leader for this study. Others in the Office of Evaluation and Inspections who conducted the study include Matt DeFraga and Anthony Soto McGrath. Office of Evaluation and Inspections staff who provided support include Clarence Arnold, Kevin Manley, China Tantameng, and Marcia Wong. We would also like to acknowledge the contributions of other Office of Inspector General staff, including Rose Folsom, Jessica Swanstrom, Megan Tinker, Andrew VanLandingham, and Paul Westfall. This report was prepared under the direction of Blaine Collins, Regional Inspector General for the Office of Evaluation and Inspections in the San Francisco regional office, and Abby Amoroso and Michael Henry, Deputy Regional Inspectors General. To obtain additional information concerning this report or to obtain copies, contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. Challenges Appear to Limit States’ Use of Medicaid Payment Suspensions (OEI-09-14-00020) 19 Office of Inspector General http://oig.hhs.gov The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, 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 individuals 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 individuals. 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.