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Kentucky State Medicaid Fraud Control Unit: 2017 Onsite Review


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.


We conducted an onsite review of the Kentucky Unit in January 2017. We based our review on an analysis of data from seven sources: (1) policies, procedures, and documentation related to the Unit's operations, staffing, and caseload; (2) financial documentation for fiscal years (FYs) 2014 through 2016; (3) structured interviews with key stakeholders; (4) a survey of Unit staff; (5) structured interviews with the Unit's management; (6) a sample of files for cases that were open in FYs 2014 through 2016; and (7) observation of Unit operations.


For FYs 2014 through 2016, the Unit reported 52 criminal convictions; 49 civil judgments and settlements; and combined criminal and civil recoveries of approximately $121 million. Our review found that the Kentucky Unit was generally in compliance with applicable laws, regulations, and policy transmittals. The Unit maintained proper fiscal control of its resources. The Unit collaborated with other government and industry stakeholders to encourage effective referrals of fraud, and appointed an executive advisor to mentor and support staff. We identified one area in which the Unit should improve its operations: timeliness of reporting. The Unit did not report all convictions or adverse actions to Federal partners within the appropriate timeframes.


We recommend that the Kentucky Unit implement processes to ensure that it reports convictions and adverse actions to Federal partners within the appropriate timeframes. The Unit concurred with our recommendation.