Department of Health and Human Services OFFICE OF INSPECTOR GENERAL WYOMING STATE MEDICAID FRAUD CONTROL UNIT: 2016 ONSITE REVIEW Suzanne Murrin Deputy Inspector General for Evaluation and Inspections September 2017 OEI-09-16-00530 WYOMING STATE MEDICAID FRAUD CONTROL UNIT: 2016 ONSITE REVIEW OEI-09-16-00530 WHY WE DID THIS STUDY The Office of Inspector General (OIG) administers the Medicaid Fraud Control Unit (MFCU or Unit) grant awards, annually recertifies the Units, and oversees the Units' performance in accordance with the requirements of the grant. As part of this oversight, OIG conducts periodic reviews of all Units and prepares public reports based on these reviews. These reviews assess the Units’ adherence to the 12 MFCU performance standards and compliance with applicable Federal statutes and regulations. HOW WE DID THIS STUDY We conducted an onsite review of the Wyoming Unit in October 2016. We based our review on an analysis of data from six sources: (1) policies, procedures, and documentation related to the Unit’s operations, staffing, and caseload; (2) financial documentation for fiscal years (FYs) 2013 through 2015; (3) structured interviews with key stakeholders; (4) structured interviews with Unit staff; (5) files for all cases that were open in FYs 2013 through 2015; and (6) observation of Unit operations. WHAT WE FOUND For FYs 2013 through 2015, the Wyoming Unit reported obtaining 11 criminal convictions; 25 global civil judgments and settlements; and total recoveries of over $3 million. We found that the Wyoming Unit was generally in compliance with applicable laws, regulations, and policy transmittals, and the Unit overcame training barriers by working with another MFCU to train its newly hired investigator. However, we identified three areas of concern: (1) the Unit did not pursue civil fraud cases other than “global” civil fraud cases (i.e., cases that involve the National Association of Medicaid Fraud Control Units and typically involve a group of MFCUs) during the review period; (2) although the Unit referred cases to its Federal and State agency partners, its written procedures for such referrals were incomplete; and (3) the Unit did not employ any investigators for a period of approximately 6 months, which appeared to have negative consequences for Unit investigations. WHAT WE RECOMMEND We recommend that the Wyoming Unit (1) develop and implement a plan to improve its ability to pursue nonglobal fraud cases as civil matters; (2) incorporate procedures for referring cases to Federal partners and other State agencies into its written policies and procedures manual; and (3) take steps to ensure that it does not lack an investigator for a significant period of time. The Unit concurred with all three recommendations. TABLE OF CONTENTS Objective ......................................................................................................1 Background ..................................................................................................1 Methodology ................................................................................................4 Findings........................................................................................................5 For FYs 2013 through 2015, the Unit reported 11 convictions, 25 global civil judgments and settlements, and total recoveries of approximately $3.2 million..........................................................5 The Unit did not pursue nonglobal cases of civil fraud during the FY 2013–2015 review period ....................................................6 Although the Unit referred cases to its Federal and State agency partners, its written procedures for such referrals were incomplete ........................................................................................6 The Unit did not employ any investigators for a period of approximately 6 months, which appeared to have negative consequences for Unit investigations...............................................7 Other observation .........................................................................................8 The Unit overcame training barriers by working with another MFCU to train its newly hired investigator .....................................8 Conclusion and Recommendations ..............................................................9 Unit Comments and Office of Inspector General Response .......... 11 Appendixes ................................................................................................12 A: 2012 Performance Standards ...................................................12 B: Referrals to the Wyoming MFCU, by Referral Source, FYs 2013 Through 2015 ................................................................16 C: Investigations Opened and Closed by the Wyoming MFCU, by Case Type, FYs 2013 Through 2015 ...........................17 D: Detailed Methodology .............................................................18 E: Unit Comments.........................................................................21 Acknowledgments......................................................................................26 OBJECTIVE To conduct an onsite review of the Wyoming State Medicaid Fraud Control Unit (MFCU or Unit). BACKGROUND The mission of MFCUs is to investigate and prosecute Medicaid provider fraud and patient abuse or neglect under State law.1 The Social Security Act (SSA) requires each State to operate a MFCU, unless the Secretary of Health and Human Services determines that operation of a Unit would not be cost-effective because minimal Medicaid fraud exists in a particular State and the State has other adequate safeguards to protect Medicaid beneficiaries from abuse and neglect.2 Currently, 49 States and the District of Columbia (States) have MFCUs.3 Each Unit must employ an interdisciplinary staff that consists of at least an investigator, an auditor, and an attorney.4 Unit staff review referrals of provider fraud and patient abuse or neglect to determine their potential for criminal prosecution and/or civil action. In fiscal year (FY) 2016, the 50 Units collectively reported 1,564 convictions; 998 civil judgments or settlements; and almost $1.9 billion in recoveries.5, 6 Units must meet a number of requirements established by the SSA and Federal regulations. For example, each Unit must:  be a single, identifiable entity of State government, distinct from the single State Medicaid agency;7 1 Social Security Act § 1903(q)(3). 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. 2 SSA § 1902(a)(61). 3 North Dakota and the territories of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands have not established Units. 4 SSA § 1903(q)(6); 42 CFR §1007.13. 5 Office of Inspector General (OIG), MFCU Statistical Data for Fiscal Year 2016, Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-units- mfcu/expenditures_statistics/fy2016-statistical-chart.pdf on March 7, 2017. 6 All FY references in this report are based on the Federal FY (October 1 through September 30). 7 SSA § 1903(q)(2); 42 CFR § 1007.5 and 1007.9(a). Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 1  develop a formal agreement, such as a memorandum of understanding (MOU) that describes the Unit’s relationship with the State Medicaid agency;8 and  have either statewide authority to prosecute cases or formal procedures to refer suspected criminal violations to an agency with such authority.9 MFCU Funding Each MFCU is funded jointly by its State and the Federal government. Federal funding for the MFCUs is provided as part of the Federal Medicaid appropriation, but it is administered by the Department of Health and Human Services (HHS) Office of Inspector General (OIG).10 Each Unit receives Federal financial participation equivalent to 75 percent of its total expenditures, with State funds contributing the remaining 25 percent.11 In FY 2016, combined Federal and State expenditures for the Units totaled approximately $259 million, approximately $194 million of which represented Federal funds.12 Administration and Oversight of the MFCU Program The Secretary of HHS delegated to OIG the authority to administer the MFCU grant program.13 To receive Federal reimbursement, each Unit must submit an initial application to OIG for approval and be recertified each year thereafter. In annually recertifying the Units, OIG evaluates Units’ compliance with Federal requirements and their adherence to performance standards. The Federal requirements for Units are contained in the SSA, regulations, and policy transmittals.14 In addition, OIG has published 12 performance standards that it uses to assess whether a Unit is effectively performing its responsibilities.15 The standards address topics such as staffing, maintaining adequate referrals, and cooperation with Federal authorities. Appendix A contains these performance standards. 8 42 CFR § 1007.9(d). 9 SSA § 1903(q)(1). 10 SSA § 1903(a)(6)(B). 11 Ibid. 12 OIG, MFCU Statistical Data for Fiscal Year 2016, Accessed at https://oig.hhs.gov/fraud/medicaid-fraud-control-units- mfcu/expenditures_statistics/fy2016-statistical-chart.pdf on March 7, 2017. 13 The SSA authorizes the Secretary of HHS to award grants to the Units (SSA § 1903(a)(6)(B)); the Secretary delegated this authority to the OIG. 14 On occasion, OIG issues policy transmittals to provide guidance and instructions to MFCUs. 15 77 Fed. Reg. 32645 (June 1, 2012). Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 2 OIG also performs periodic onsite reviews of the Units, such as this review of the Wyoming MFCU. During these onsite reviews, OIG evaluates Units’ compliance with laws, regulations, and policy transmittals, as well as adherence to the 12 performance standards. OIG also makes observations about beneficial practices, provides recommendations to the Units, and monitors the implementation of the recommendations. These evaluations differ from other OIG evaluations, as they support OIG’s direct administration of the MFCU grant program. These evaluations are subject to the same internal quality controls as other OIG evaluations, including internal peer review. OIG provides additional oversight, including collecting and disseminating performance data; conducting training; and providing technical assistance. Wyoming MFCU The Wyoming Unit’s office is located in Cheyenne. The Unit is an autonomous entity within the State’s Office of the Attorney General. At the time of our review, the Unit’s staff was composed of an attorney (who also acted as the Unit’s director), an investigator, an auditor, and a paralegal/office manager. The Unit’s attorney/director directly supervised the other three staff members. The Unit receives referrals from the State’s Division of Healthcare Financing, which is the program integrity unit within the State Medicaid agency. The Unit also receives referrals from other sources, such as OIG, private citizens and other State agencies. Appendix B illustrates the Unit’s referrals, by source, for FYs 2013 through 2015. When the Unit receives a referral, the Unit’s investigator or auditor conducts a preliminary assessment to determine whether the allegation has the potential for full investigation and is within the Unit’s MFCU grant authority. If the referral meets these criteria, the director then decides whether to open a case, have Unit staff conduct further preliminary investigation, or send the referral to another agency. After the Unit opens a case, the Unit’s investigator and/or auditor conducts a full investigation. The Wyoming Unit has the authority to investigate matters of Medicaid fraud and cases of patient abuse and neglect,16 but does not have original authority to prosecute criminal matters, which instead is vested with the county District Attorneys located across the State. However, District Attorneys may exercise their discretion to jointly prosecute cases with the Unit or authorize the Unit to proceed with the 16 For the purposes of this report, the category of patient abuse and neglect includes the misappropriation or theft of private funds belonging to patients in residential health care facilities. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 3 prosecution. Appendix C illustrates the number and type of investigations that were opened and closed by the Unit for FYs 2013 through FY 2015. Previous Review In 2011, OIG issued a report regarding its August 2010 onsite review of the Wyoming Unit. OIG made one recommendation in that report regarding the Unit’s MOU with the State Medicaid agency. That recommendation is now closed. METHODOLOGY We conducted the onsite review in October 2016. We based our review on an analysis of data from six sources: (1) policies, procedures, and documentation related to the Unit’s operations, staffing, and caseload; (2) financial documentation for FYs 2013 through 2015; (3) structured interviews with key stakeholders; (4) structured interviews with Unit staff; (5) files for cases that were open at some point during FYs 2013–2015; and (6) observation of Unit operations. Appendix D provides details of our methodology. 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. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 4 FINDINGS For FYs 2013 through 2015, the Unit reported 11 convictions, 25 global civil judgments and settlements, and total recoveries of approximately $3.2 million The Unit reported 11 convictions over the 3-year period—9 that involved provider fraud and 2 that involved patient abuse or neglect. All 25 of the Unit’s civil judgments and settlements for FYs 2013 through 2015 were the result of “global” cases.17 See Exhibit 1 for yearly convictions and global civil judgments and settlements. Exhibit 1: Convictions and Global Civil Judgments and Settlements, FYs 2013 Through 2015 3-Year Case Outcomes FY 2013 FY 2014 FY 2015 Total Convictions 3 5 3 11 Global Civil Judgments and 13 9 3 25 Settlements Source: OIG review of MFCU self-reported quarterly and annual statistical reports and other data, 2016. Approximately $140,000 of the Unit’s $3.2 million in total recoveries were from criminal cases. The Unit’s criminal recoveries declined each year of the review period, from $76,388 in 2013 to $21,013 in 2015. Unit management explained that the low criminal recoveries in FY 2015 resulted in part from the departures of the Unit’s sole investigator and attorney at the beginning of that FY.18 Approximately $3 million of the $3.2 million in total recoveries was from global civil cases. See Exhibit 2 for yearly criminal recoveries, global civil recoveries, and Unit expenditures.19 17 “Global” cases are civil False Claims Act cases that are litigated in Federal courts by the U.S. Department of Justice and typically involve a group of MFCUs. The National Association of Medicaid Fraud Control Units facilitates the settlement of global cases on behalf of the States. 18 For about a 6-month period during FY 2015, the Unit did not employ any investigators, and its sole attorney (appointed to the Unit by the Attorney General’s Office) served the Unit on an interim rather than a long-term basis. The Unit did not provide further explanation for the decline in recoveries from FY 2013 to FY 2014. 19 Figures in this paragraph and Exhibit 2 are rounded. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 5 Exhibit 2: Wyoming MFCU-Reported Recoveries and Total Expenditures, by Year, FYs 2013 Through 2015 Recovery Types FY 2013 FY 2014 FY 2015 3-Year Total Total Civil and Criminal Recoveries $1,623,272 $1,512,626 $44,448 $3,180,346 Global Civil Recoveries $1,546,884 $1,469,685 $23,435 $3,040,004 Criminal Recoveries $76,388 $42,941 $21,013 $140,342 Total Expenditures $489,024 $485,829 $410,907 $1,385,760 Source: OIG review of MFCU self-reported quarterly and annual statistical reports and other data, 2016. The Unit did not pursue nonglobal cases of civil fraud during the FY 2013-2015 review period Although the Wyoming Unit reported judgments, settlements, and recoveries from global civil cases, Unit management reported no nonglobal civil judgments, settlements, or recoveries for the 3-year review period.20 Wyoming enacted a Medicaid False Claims Act in 2013,21 and OIG State Fraud Policy Transmittal 99-01 states that “all provider fraud cases that are declined criminally [should] be investigated and/or analyzed fully for their civil potential.”22 However, Unit management reported that if a case did not have potential for criminal prosecution, the Unit would not pursue it as a civil fraud case and would refer the case to another agency. During interviews at the time of our onsite review, Unit management reported that it had made pursuing nonglobal civil fraud cases a priority beginning in FY 2016. Consequently, the Unit settled its first nonglobal civil fraud case in January 2017. 20 One consequence of not pursuing civil fraud cases was that the Unit did not maintain a balance of criminal and civil fraud cases in adherence with OIG performance standards. Performance standard 6(E) states “As part of its case mix, the Unit seeks to maintain, consistent with its legal authorities, a balance of criminal and civil fraud cases.” 21 The Wyoming Medicaid False Claims Act includes civil penalties for false Medicaid claims. Wyoming Statute §§ 42-4-301 to -306 (2013). 22 OIG, State Fraud Policy Transmittal 99-01, p. 2. This policy transmittal further states that Units should either try meritorious civil cases “under State law” or refer them to “the U.S. Department of Justice or the U.S. Attorney’s Office.” Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 6 Although the Unit referred cases to its Federal and State agency partners, its written procedures for such referrals were incomplete Unit stakeholders, specifically Federal and State agency partners, confirmed that the Unit referred cases to them and reported no concerns about the number or quality of Unit referrals. However, although the Unit’s policies and procedures manual contained a written procedure for referring cases to the State Medicaid agency, the manual contained no such procedure for referring cases to other State agencies (such as the Wyoming Department of Family Services) or to Federal partners (such as the Department of Justice or OIG). Performance standard 3(C) states that a Unit’s written policies and procedures should “include a process for referring cases, when appropriate, to Federal and State agencies.” Unit management explained that the Unit has processes for referring cases to Federal partners and to other State agencies, but acknowledged that these processes were not documented in the Unit’s policies and procedures manual. The Unit did not employ any investigators for a period of approximately 6 months, which appeared to have negative consequences for Unit investigations After the Unit’s sole investigator went on sick leave in October 2014 and then subsequently retired, the Unit did not employ an investigator for approximately 6 months, hiring a new investigator in April 2015.23 Although the Unit used investigators from other agencies as support on a part-time, case-by-case basis during this period, Federal regulations require that the Unit be staffed by a full-time “senior investigator with substantial experience in commercial or financial investigations.”24 23 According to Federal regulations, “employ” is defined as “full-time duty intended to last at least a year,” whether the Unit directly hires someone or employs that person on the basis of “full-time detail” from another agency. 42 CFR § 1007.1. The Wyoming Unit is the only MFCU that has an approved budget authorizing the employment of only one investigator. 24 42 CFR § 1007.13(a)(3). Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 7 MFCU performance standards also state that Units should employ an appropriate number of staff.25 The loss of the Unit’s sole investigator appeared to have at least two negative implications for Unit investigations: investigation delays and a lack of continuity once the Unit hired a new full-time investigator. Our review of the Unit’s case files found that some lacked documentation of any investigative activity during this 6-month period. This suggests that the lack of an investigator resulted in delays in these investigations.26 Performance standard 5 states that a Unit should maintain a continuous case flow to complete cases in an appropriate timeframe. Further, once the Unit hired a new investigator in April 2015, he did not have an existing investigator to provide context and background for ongoing investigations or help train him in the investigation of Medicaid provider fraud and patient abuse or neglect cases in Wyoming. Other observation: The Unit overcame training barriers by working with another MFCU to train its newly hired investigator To overcome training barriers associated with the high cost of extensive travel and the lack of an experienced investigator to train its newly hired investigator, the Unit’s newly hired investigator drove to the adjacent State of Colorado to train with staff from the Colorado MFCU. During this 3-day period, the investigator observed active investigations and met with the Colorado MFCU’s management and attorneys to discuss the investigation and prosecution of Medicaid provider fraud. Both the Wyoming Unit’s management and investigator reported that this practice was a highly cost-effective way to train the investigator and offered the additional benefit of furthering a positive working relationship with the other MFCU. 25 Performance standard 2(A) states that a Unit should employ the number of staff that is included in the Unit’s budget estimate, as approved by OIG. In addition, performance standard 2(C) states that a Unit should employ an appropriate mix and “number” of professional staff (such as investigators) to enable the Unit “to effectively investigate and prosecute” an appropriate volume of cases of Medicaid fraud and patient abuse and neglect. 26 Because the Unit’s director and sole investigator were no longer employed by the Unit at the time of our onsite review, we could not conclusively verify whether the case files simply lacked documentation of investigation activities or whether the activities did not occur. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 8 CONCLUSION AND RECOMMENDATIONS The Wyoming Unit was generally in compliance with applicable laws, regulations, and policy transmittals. For FYs 2013 through 2015, the Unit reported 11 convictions; 25 global civil judgments and settlements; and total recoveries of approximately $3.2 million. The Unit also overcame training challenges by working with another MFCU to train its newly hired investigator. However, we identified three areas of concern. Specifically, the Unit did not pursue fraud cases as civil matters under Wyoming’s civil fraud statute and therefore reported no nonglobal civil judgments, settlements, or recoveries for the review period. In addition, although the Unit referred cases to Federal and State agency partners, the Unit’s written procedures for such referrals were incomplete. Finally, the Unit did not employ any full-time investigators for a period of approximately 6 months, which appeared to have at least two negative implications for Unit investigations: delays in investigations and a lack of continuity once the Unit hired a new full-time investigator. Therefore, we recommend that the Wyoming Unit: Develop and implement a plan to improve its ability to pursue nonglobal fraud cases as civil matters The Unit should develop and implement a plan to pursue appropriate fraud cases as civil matters. As part of the plan, the Unit could provide training to staff and further develop litigation strategies to pursue nonglobal fraud cases as civil matters. We note that the Unit has already made progress with regard to pursuing nonglobal fraud cases since the time period we reviewed—it reports having settled its first nonglobal civil case. Incorporate procedures for referring cases to Federal partners and other State agencies into its written policies and procedures manual The Unit should revise its policies and procedures manual to document procedures for referring cases to Federal partners (such as the Department of Justice and OIG) and State agencies other than the State Medicaid agency. This will help ensure that staff, including new employees, become familiar with and adhere to these procedures. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 9 Take steps to ensure that it does not lack an investigator for a significant period of time Because the Wyoming Unit employs a sole investigator, the loss of that investigator can have a significant effect on Unit performance, as it did when the Unit’s sole investigator retired in FY 2015. To ensure that Unit investigations do not sit idle for significant periods of time, the Unit should take steps to ensure that it continuously employs an investigator, such as seeking approval for and hiring an additional investigator or developing a contingency plan to ensure that an investigator with the requisite qualifications is available to the Unit on a full-time, interim basis. Unit management and stakeholders said that hiring a second investigator would (1) ease the burden on its sole investigator during busy periods, (2) allow the Unit to expand its caseload, and (3) help prevent investigative delays when an investigator leaves employment. Additional potential benefits include facilitating investigator safety in the field and during interviews, providing better training for a newly hired investigator, and improving continuity when moving cases between investigators. If the Unit is unable to hire an additional investigator, the Unit should work with the Wyoming Attorney General’s Office and OIG to develop a written contingency plan with other options to ensure that an investigator who meets the requirements for that position is readily available to the Unit. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 10 UNIT COMMENTS AND OFFICE OF INSPECTOR GENERAL RESPONSE The Wyoming Unit concurred with all three of our recommendations. OIG anticipates that the Unit’s actions will implement our recommendations. With regard to our recommendation for the Unit to develop and implement a plan to improve its ability to pursue nonglobal fraud cases as civil matters, the Unit stated that it revised its policies to ensure that all cases not pursued criminally are assessed for civil merit. In the attachment to its comments, the Unit included the revised language. With regard to our recommendation for the Unit to incorporate procedures for referring cases to Federal partners and other State agencies into its written policies and procedures manual, the Unit stated that it revised its policies to reflect its current referral practices. In the attachment to its comments, the Unit included the revised language. With regard to our recommendation for the Unit to take steps to ensure that it does not lack an investigator for a significant period of time, the Unit explained that, due to State economic limitations, it is unable to hire an additional investigator at this time. However, the Unit reported that it has already implemented (as part of its regular process) several approaches that will help it to avoid investigative delays should it lose its investigator again. These actions include: (1) having the Unit’s paralegal and auditor contribute to investigations; (2) using on an “as needed” basis the assistance of an investigator (not paid from the MFCU grant) from another division of the Attorney General’s Office; and (3) working with State and Federal law enforcement partners on joint investigations. Furthermore, the Unit stated that it will reach out to OIG for assistance on any additional steps that may be desirable to incorporate into a contingency plan. The full text of the Unit’s comments is provided in Appendix E. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 11 APPENDIX A 2012 Performance Standards27 1. A UNIT CONFORMS WITH ALL APPLICABLE STATUTES, REGULATIONS, AND POLICY DIRECTIVES, INCLUDING: A. Section 1903(q) of the Social Security Act, containing the basic requirements for operation of a MFCU; B. Regulations for operation of a MFCU contained in 42 CFR part 1007; C. Grant administration requirements at 45 CFR part 92 and Federal cost principles at 2 CFR part 225; D. OIG policy transmittals as maintained on the OIG Web site; and E. Terms and conditions of the notice of the grant award. 2. A UNIT MAINTAINS REASONABLE STAFF LEVELS AND OFFICE LOCATIONS IN RELATION TO THE STATE’S MEDICAID PROGRAM EXPENDITURES AND IN ACCORDANCE WITH STAFFING ALLOCATIONS APPROVED IN ITS BUDGET. A. The Unit employs the number of staff that is included in the Unit’s budget estimate as approved by OIG. B. The Unit employs a total number of professional staff that is commensurate with the State’s total Medicaid program expenditures and that enables the Unit to effectively investigate and prosecute (or refer for prosecution) an appropriate volume of case referrals and workload for both Medicaid fraud and patient abuse and neglect. C. The Unit employs an appropriate mix and number of attorneys, auditors, investigators, and other professional staff that is both commensurate with the State’s total Medicaid program expenditures and that allows the Unit to effectively investigate and prosecute (or refer for prosecution) an appropriate volume of case referrals and workload for both Medicaid fraud and patient abuse and neglect. D. The Unit employs a number of support staff in relation to its overall size that allows the Unit to operate effectively. E. To the extent that a Unit maintains multiple office locations, such locations are distributed throughout the State, and are adequately staffed, commensurate with the volume of case referrals and workload for each location. 3. A UNIT ESTABLISHES WRITTEN POLICIES AND PROCEDURES FOR ITS OPERATIONS AND ENSURES THAT STAFF ARE FAMILIAR WITH, AND ADHERE TO, POLICIES AND PROCEDURES. A. The Unit has written guidelines or manuals that contain current policies and procedures, consistent with these performance standards, for the investigation and (for those Units with prosecutorial authority) prosecution of Medicaid fraud and patient abuse and neglect. B. The Unit adheres to current policies and procedures in its operations. C. Procedures include a process for referring cases, when appropriate, to Federal and State agencies. Referrals to State agencies, including the State Medicaid agency, should identify whether further investigation or other administrative action is warranted, such as the collection of overpayments or suspension of payments. D. Written guidelines and manuals are readily available to all Unit staff, either online or in hard copy. E. Policies and procedures address training standards for Unit employees. 4. A UNIT TAKES STEPS TO MAINTAIN AN ADEQUATE VOLUME AND QUALITY OF REFERRALS FROM THE STATE MEDICAID AGENCY AND OTHER SOURCES. A. The Unit takes steps, such as the development of operational protocols, to ensure that the State Medicaid agency, managed care organizations, and other agencies refer to the Unit all suspected provider fraud cases. Consistent with 42 CFR 1007.9(g), the Unit provides timely written notice to the State Medicaid agency when referred cases are accepted or declined for investigation. Continued on next page 27 77 Fed. Reg. 32645, June 1, 2012. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 12 B. The Unit provides periodic feedback to the State Medicaid agency and other referral sources on the adequacy of both the volume and quality of its referrals. C. The Unit provides timely information to the State Medicaid or other agency when the Medicaid or other agency requests information on the status of MFCU investigations, including when the Medicaid agency requests quarterly certification pursuant to 42 CFR 455.23(d)(3)(ii). D. For those States in which the Unit has original jurisdiction to investigate or prosecute patient abuse and neglect cases, the Unit takes steps, such as the development of operational protocols, to ensure that pertinent agencies refer such cases to the Unit, consistent with patient confidentiality and consent. Pertinent agencies vary by State but may include licensing and certification agencies, the State Long Term Care Ombudsman, and adult protective services offices. E. The Unit provides timely information, when requested, to those agencies identified in (D) above regarding the status of referrals. F. The Unit takes steps, through public outreach or other means, to encourage the public to refer cases to the Unit. 5. A UNIT TAKES STEPS TO MAINTAIN A CONTINUOUS CASE FLOW AND TO COMPLETE CASES IN AN APPROPRIATE TIMEFRAME BASED ON THE COMPLEXITY OF THE CASES. A. Each stage of an investigation and prosecution is completed in an appropriate timeframe. B. Supervisors approve the opening and closing of all investigations and review the progress of cases and take action as necessary to ensure that each stage of an investigation and prosecution is completed in an appropriate timeframe. C. Delays to investigations and prosecutions are limited to situations imposed by resource constraints or other exigencies. 6. A UNIT’S CASE MIX, AS PRACTICABLE, COVERS ALL SIGNIFICANT PROVIDER TYPES AND INCLUDES A BALANCE OF FRAUD AND, WHERE APPROPRIATE, PATIENT ABUSE AND NEGLECT CASES. A. The Unit seeks to have a mix of cases from all significant provider types in the State. B. For those States that rely substantially on managed care entities for the provision of Medicaid services, the Unit includes a commensurate number of managed care cases in its mix of cases. D. As part of its case mix, the Unit maintains a balance of fraud and patient abuse and neglect cases for those States in which the Unit has original jurisdiction to investigate or prosecute patient abuse and neglect cases. C. The Unit seeks to allocate resources among provider types based on levels of Medicaid expenditures or other risk factors. Special Unit initiatives may focus on specific provider types. E. As part of its case mix, the Unit seeks to maintain, consistent with its legal authorities, a balance of criminal and civil fraud cases. 7. A UNIT MAINTAINS CASE FILES IN AN EFFECTIVE MANNER AND DEVELOPS A CASE MANAGEMENT SYSTEM THAT ALLOWS EFFICIENT ACCESS TO CASE INFORMATION AND OTHER PERFORMANCE DATA. A. Reviews by supervisors are conducted periodically, consistent with MFCU policies and procedures, and are noted in the case file. B. Case files include all relevant facts and information and justify the opening and closing of the cases. C. Significant documents, such as charging documents and settlement agreements, are included in the file. D. Interview summaries are written promptly, as defined by the Unit’s policies and procedures. E. The Unit has an information management system that manages and tracks case information from initiation to resolution. F. The Unit has an information management system that allows for the monitoring and reporting of case information, including the following: 1. The number of cases opened and closed and the reason that cases are closed. Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 13 2. The length of time taken to determine whether to open a case referred by the State Medicaid agency or other referring source. 3. The number, age, and types of cases in the Unit’s inventory/docket 4. The number of referrals received by the Unit and the number of referrals by the Unit to other agencies. 5. The number of cases criminally prosecuted by the Unit or referred to others for prosecution, the number of individuals or entities charged, and the number of pending prosecutions. 6. The number of criminal convictions and the number of civil judgments. 7. The dollar amount of overpayments identified. 8. The dollar amount of fines, penalties, and restitution ordered in a criminal case and the dollar amount of recoveries and the types of relief obtained through civil judgments or prefiling settlements. 8. A UNIT COOPERATES WITH OIG AND OTHER FEDERAL AGENCIES IN THE INVESTIGATION AND PROSECUTION OF MEDICAID AND OTHER HEALTH CARE FRAUD. A. The Unit communicates on a regular basis with OIG and other Federal agencies investigating or prosecuting health care fraud in the State. B. The Unit cooperates and, as appropriate, coordinates with OIG’s Office of Investigations and other Federal agencies on cases being pursued jointly, cases involving the same suspects or allegations, and cases that have been referred to the Unit by OIG or another Federal agency. C. The Unit makes available, to the extent authorized by law and upon request by Federal investigators and prosecutors, all information in its possession concerning provider fraud or fraud in the administration of the Medicaid program. D. For cases that require the granting of “extended jurisdiction” to investigate Medicare or other Federal health care fraud, the Unit seeks permission from OIG or other relevant agencies under procedures as set by those agencies. E. For cases that have civil fraud potential, the Unit investigates and prosecutes such cases under State authority or refers such cases to OIG or the U.S. Department of Justice. F. The Unit transmits to OIG, for purposes of program exclusions under section 1128 of the Social Security Act, all pertinent information on MFCU convictions within 30 days of sentencing, including charging documents, plea agreements, and sentencing orders. G. The Unit reports qualifying cases to the Healthcare Integrity & Protection Databank, the National Practitioner Data Bank, or successor data bases. 9. A UNIT MAKES STATUTORY OR PROGRAMMATIC RECOMMENDATIONS, WHEN WARRANTED, TO THE STATE GOVERNMENT. A. The Unit, when warranted and appropriate, makes statutory recommendations to the State legislature to improve the operation of the Unit, including amendments to the enforcement provisions of the State code. B. The Unit, when warranted and appropriate, makes other regulatory or administrative recommendations regarding program integrity issues to the State Medicaid agency and to other agencies responsible for Medicaid operations or funding. The Unit monitors actions taken by the State legislature and the State Medicaid or other agencies in response to recommendations. 10. A UNIT PERIODICALLY REVIEWS ITS MEMORANDUM OF UNDERSTANDING (MOU) WITH THE STATE MEDICAID AGENCY TO ENSURE THAT IT REFLECTS CURRENT PRACTICE, POLICY, AND LEGAL REQUIREMENTS. A. The MFCU documents that it has reviewed the MOU at least every 5 years, and has renegotiated the MOU as necessary, to ensure that it reflects current practice, policy, and legal requirements. B. The MOU meets current Federal legal requirements as contained in law or regulation, including 42 CFR § 455.21, “Cooperation with State Medicaid fraud control units,” and 42 CFR § 455.23, “Suspension of payments in cases of fraud.” C. The MOU is consistent with current Federal and State policy, including any policies issued by OIG or the Centers for Medicare & Medicaid Services (CMS). Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 14 D. Consistent with Performance Standard 4, the MOU establishes a process to ensure the receipt of an adequate volume and quality of referrals to the Unit from the State Medicaid agency. E. The MOU incorporates by reference the CMS Performance Standard for Referrals of Suspected Fraud from a State Agency to a Medicaid Fraud Control Unit. 11. A UNIT EXERCISES PROPER FISCAL CONTROL OVER UNIT RESOURCES. A. The Unit promptly submits to OIG its preliminary budget estimates, proposed budget, and Federal financial expenditure reports. B. The Unit maintains an equipment inventory that is updated regularly to reflect all property under the Unit’s control. C. The Unit maintains an effective time and attendance system and personnel activity records. D. The Unit applies generally accepted accounting principles in its control of Unit funding. E. The Unit employs a financial system in compliance with the standards for financial management systems contained in 45 CFR 92.20. 12. A UNIT CONDUCTS TRAINING THAT AIDS IN THE MISSION OF THE UNIT. A. The Unit maintains a training plan for each professional discipline that includes an annual minimum number of training hours and that is at least as stringent as required for professional certification. B. The Unit ensures that professional staff comply with their training plans and maintain records of their staff’s compliance. C. Professional certifications are maintained for all staff, including those that fulfill continuing education requirements. D. The Unit participates in MFCU-related training, including training offered by OIG and other MFCUs, as such training is available and as funding permits. E. The Unit participates in cross-training with the fraud detection staff of the State Medicaid agency. As part of such training, Unit staff provide training on the elements of successful fraud referrals and receive training on the role and responsibilities of the State Medicaid agency. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 15 APPENDIX B Wyoming MFCU Referrals, by Referral Source, FYs 2013 Through 2015 FY 2013 FY 2014 FY 2015 Abuse/ Abuse/ Abuse/ Referral Source Fraud Fraud Fraud Total Neglect* Neglect* Neglect* HHS OIG 14 0 8 0 11 0 33 State Medicaid 1 0 8 2 1 0 12 Agency Provider 1 2 1 0 0 0 4 Private Citizen 2 0 1 0 0 1 4 State Agencies – 1 0 0 0 1 0 2 Other Law Enforcement 0 0 0 0 1 0 1 State Survey and 0 0 0 0 0 1 1 Certification Agency Total 19 2 18 2 14 2 57 Annual Total 21 20 16 Source: OIG analysis of Unit Quarterly and Annual Statistical Reports, 2016. *The category of referrals of abuse and neglect includes referrals of misappropriation of patient funds. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 16 APPENDIX C Investigations Opened and Closed by the Wyoming MFCU, by Case Type, FYs 2013 Through 2015 Annual Case Type FY 2013 FY 2014 FY 2015 3-Year Total Average* Opened 32 20 16 68 23 Patient Abuse and 3 2 2 7 2 Neglect Provider Fraud 29 18 14 61 20 Closed 15 22 13 50 17 Patient Abuse and 2 2 1 5 2 Neglect Provider Fraud 13 20 12 45 15 Source: OIG analysis of Unit Quarterly and Annual Statistical Reports, 2016. *Averages in this column are rounded. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 17 APPENDIX D Detailed Methodology To describe the caseload and assess the performance of the Wyoming MFCU, we collected data from six sources: (1) policies, procedures, and documentation related to the Unit’s operations, staffing, and caseload; (2) financial documentation for FYs 2013 through 2015; (3) structured interviews with key stakeholders; (4) structured interviews with Unit staff; (5) files for all cases that were open in FYs 2013 through 2015; and (6) observation of Unit operations. Data Collection Review of Unit Documentation. Prior to the onsite visit, we analyzed information regarding the Unit’s investigation of Medicaid cases, including information about the number of referrals the Unit received, the number of investigations the Unit opened and closed, the outcomes of those investigations, and the Unit’s case mix. We also collected and analyzed information about the number of cases that the Unit prosecuted or referred for prosecution and the outcomes of those prosecutions. We gathered this information from several sources, including the Unit’s quarterly statistical reports, its annual reports, its recertification questionnaire, its manuals of policy and procedures, and its MOU with the State Medicaid agency. We requested any additional data or clarification from the Unit as necessary. Review of Unit Financial Documentation. We reviewed the Unit’s internal fiscal controls and use of fiscal resources. Prior to conducting the onsite review, we reviewed the Unit’s financial policies and procedures; its response to an internal control questionnaire; and documents (such as financial status reports) related to MFCU grants. We reviewed four purposive samples to assess the Unit’s internal control of fiscal resources. The first three samples listed below were limited to the review period of FYs 2013 through 2015. These four samples included the following: 1. To assess the Unit’s expenditures, we selected a purposive sample of 24 items from the Unit’s 287 expenditure transactions. We selected routine and nonroutine transactions representing a variety of budget categories and payment amounts. 2. To assess the Unit’s travel expenditures, we selected a purposive sample of 24 items from the Unit’s 124 travel transactions. We selected a variety of travel expenditure categories related to both Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 18 in-State and out-of-State travel, such as hotel stays, airfare, and conference expenses. 3. To assess employees’ “time and effort”—i.e., their work hours spent on various MFCU tasks—we selected a sample of three pay periods, one from each fiscal year. We then requested and reviewed documentation (e.g., timecard records) to support the time and effort of the MFCU staff during the selected pay periods. 4. To assess the Unit’s control of its equipment, we selected and verified a purposive sample of 15 items from the current inventory list of 77 items maintained in the Unit’s office. Interviews With Key Stakeholders. In September and October 2016, we interviewed six individual stakeholders from five agencies who were familiar with MFCU operations. Specifically, we interviewed a program integrity manager from the State Medicaid agency’s Division of Healthcare Financing; an Assistant U.S. Attorney; the Chief Deputy Attorney General (from the Wyoming Attorney General’s Office);28 a manager from the State Medicaid agency’s Behavioral Health Division; and two OIG Special Agents who work closely with the Unit. We focused these interviews on the Unit’s relationship and interaction with OIG and other Federal and State authorities, and on opportunities for improvement. We used the information collected from these interviews to develop subsequent interview questions for Unit staff. Onsite Interviews With Unit Staff. We conducted structured interviews with the MFCU’s director, investigator, auditor, and paralegal/office manager in October 2016. We asked these individuals to provide information related to (1) the Unit’s operations, (2) Unit practices that contributed to the effectiveness and efficiency of Unit operations and/or performance, (3) opportunities for the Unit to improve its operations and/or performance, and (4) clarification regarding information obtained from other data sources. Onsite Review of Case Files. We asked the Unit to provide us with a list of cases that were open at any point during FYs 2013–2015. For the 108 open cases, we requested data that included, but were not limited to, the current status of the case; whether the case was criminal, civil, or global; and the date on which the case was opened. Because global cases are civil false claims actions that typically involve multiple agencies, such as the U.S. Department of Justice and a group of State MFCUs, we excluded those cases from our review of the Unit’s case files. Therefore, 28 The Chief Deputy Attorney General supervises the MFCU director. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 19 we excluded 69 cases that were categorized as “global” from the list of cases. The remaining number of case files was 39. We determined that all 39 cases had been open longer than 60 days. We reviewed the 39 case files to determine whether documentation for required supervisory reviews was present. We also reviewed these case files to determine whether there had been investigation or prosecution delays that were not explained in the case files. For all 39 case files, we also performed a qualitative review of selected issues, such as case development. While onsite, we consulted MFCU staff to address any apparent issues with individual case files, such as missing documentation. Onsite Review of Unit Operations. During our October 2016 onsite visit, we reviewed the Unit’s workspace and operations. Specifically, we visited the Unit headquarters in Cheyenne, Wyoming. While onsite, we observed the Unit’s offices and meeting spaces; security of data and case files; location of select equipment; and the general functioning of the Unit. Data Analysis We analyzed data to identify any opportunities for improvement and instances in which the Unit did not fully meet the performance standards or was not operating in accordance with laws, regulations, or policy transmittals.29 29 All relevant regulations, statutes, and policy transmittals are available online at http://oig.hhs.gov/fraud/medicaid-fraud-control-units-mfcu. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 20 APPENDIX E Unit Comments Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 21 Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 22 Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 23 Continued on next page Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 24 Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 25 ACKNOWLEDGMENTS Matthew DeFraga served as the project leader for this study. Others in the Office of Evaluation and Inspections who conducted the study include Jordan Clementi. Office of Evaluation and Inspections central office staff who provided support include Christine Moritz. We would also like to acknowledge the contributions of other Office of Inspector General staff, including Lonie Kim of the Office of Counsel to the Inspector General and staff from the Office of Investigations. 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. The report was prepared in consultation with Richard Stern, Director of the Medicaid Fraud Policy and Oversight Division. To obtain additional information concerning this report or to obtain copies, contact the Office of Public Affairs at Public.Affairs@oig.hhs.gov. Wyoming State Medicaid Fraud Control Unit: 2016 Onsite Review (OEI-09-16-00530) 26 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.