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Transcript for audio podcast: OIG Outlook 2013: Deputy IG for Audit Services, Gloria Jarmon

From the Office of Inspector General of Department of Health and Human Services

http://www.oig.hhs.gov

[Roberta Baskin] Leading the office of Audit Services with 600 plus auditors, the largest civilian audit organization in the Federal government, is Gloria Jarmon, Deputy Inspector General, and welcome Gloria. I know that improper payment is a priority issue in the Federal government and especially in Health and Human Services, why is that?

[Gloria Jarmon] Well, first I want to let you know Roberta that an improper payment occurs in the Federal government whenever the wrong person is paid the wrong amount for the wrong reason, and we're talking about large dollars. Just in fiscal year 2011, the estimated improper payments in the Federal government were 115.3 billion dollars, that's billion with a "B."

[Roberta Baskin] Yea.

[Gloria Jarmon] And the Department of Health and Human Services with the size of the programs here made up over half of that estimated improper payments, about 65 billion of the improper payments--

[Roberta Baskin] Sixty five billion.

[Gloria Jarmon] Sixty five billion with most of that being Medicare fee for service and Medicaid programs.

[Roberta Baskin] Well, tell us about OIG's role on the issue of improper payments.

[Gloria Jarmon] OIG has been doing work in this area for many years. Our current work relates primarily to overseeing the improper payment error rate calculations that are done by the department. And we also do audits to make sure that the improper payment work is being done in accordance with the legislation. And we do audits also of individual providers, suppliers, organizations, that includes our hospital work and our work with community mental health centers and home health agencies.

[Roberta Baskin] Well, Medicaid is also a complex high priority for you and your auditors. Tell us a little bit about your Medicaid work.

[Gloria Jarmon] Well, the Medicaid program is a very large and complex program, which makes it more vulnerable to fraud and abuse. Medicaid insures about 62 million low income individuals and the size of the program is funded by both the Federal government and by the state government. In 2010 the Federal share was about 263 billion, again with a "B" and the state share was 126 billion. And we've been doing work in this area for a long time. A lot of our branches have been to the Center for Medicare and Medicaid Services, CMS, where we have asked them to revise their regulations so that the Medicaid rates paid to state operated centers are based on the cost. Our recent work in New York on developmental centers shows that it happened in 2009. The amount the Federal government would have paid would have been about 700 million dollars less than what was paid.

[Roberta Baskin] You only deal with very big numbers. What are some other arenas where you're looking at significant cost savings?

[Gloria Jarmon] We're also doing work related to durable medical equipment and supplies. This includes motor wheelchairs and also includes lower prosthesis, lower limb prosthesis and some of the work that we've done there recently have showed that if the rates for the Medicaid pays for test strips had been done based on competitive bids and manufacturer, using manufacturer's rebates in Ohio--

[Roberta Baskin] These are the diabetic testing--

[Gloria Jarmon] These are the diabetic test strips. Medicaid would have saved about eight million dollars in 2009. And so, we're also looking at other states and we're also looking at other medical supplies and equipment.

[Roberta Baskin] I know the grant oversight is becoming a bigger challenge and a bigger arena for you in oversight. What are your auditors doing in terms of grants oversight?

[Gloria Jarmon] Well, HHS is the largest grant making agency and in 2013 we're planning to do even more work looking at grant programs. We found some internal control problems. We'll be looking at AIDS relief. We'll be looking at colleges and universities where there's a lot of grants that are received and subsidized child care, and in cases where grant work and our auditors and evaluators do find any potential fraud, we always coordinate closely with our investigators and lawyers.

[Roberta Baskin] Finally, the Affordable Care Act has expanded your bandwidth, so what are you doing in terms of the new programs created by the Affordable Care Act, in terms of auditing work?

[Gloria Jarmon] We're trying to focus on areas of higher risk and where higher dollars are involved. Some of the larger Federal dollars are going to some of the programs like pre-existing insurance programs and also programs that relate to employer retirement, reinsurance programs, and the co-op program where loans are being given to non-profits and health organizations in all the States. And we're also looking at information technology issues, because, of course, a whole lot of data is being transmitted. We want to make sure it's being done as safe and secure as possible.

[Roberta Baskin] Thank you Gloria Jarmon. It sounds like you and your auditors have your work cut out for you in 2013.

[Gloria Jarmon] Thank you Roberta.

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