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North Carolina State Medicaid Fraud Control Unit: 2016 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 onsite reviews of all Units and prepares public reports based on these reviews. These reviews assess Units' adherence to the 12 MFCU performance standards and Units' compliance with applicable Federal statutes and regulations.


We conducted an onsite review of the North Carolina Unit in March 2016. 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) 2013 through 2015; (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 2013 through 2015; and (7) observation of Unit operations.


For FYs 2013 through 2015, the North Carolina Unit reported 57 convictions, 49 civil judgments and settlements, and combined criminal and civil recoveries of over $134 million. Our review of the North Carolina Unit found that it was generally in compliance with applicable laws, regulations, and policy transmittals. However, we identified three areas where the Unit should improve its operations. Specifically, 8 percent of the case files did not contain any periodic supervisory reviews of cases. In addition, the Unit did not report all convictions and adverse actions to Federal partners in a timely manner. Finally, the Unit's case management system posed challenges to retrieving case information. We noted that the Unit partnered with another State agency to design and deliver a specialized training course for new investigators.


We recommend that the North Carolina Unit: (1) conduct and document supervisory reviews of Unit case files according to the Unit's policies and procedures, (2) implement processes to ensure it reports convictions and adverse actions to Federal partners within required timeframes, and (3) proceed with plans to replace the Unit's case management system to ensure case information is readily accessible to Unit staff as needed. The Unit concurred with all three recommendations.