Tennessee Medicaid Fraud Control Unit: 2017 Onsite Inspection

WHY WE DID THIS STUDY

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.

HOW WE DID THIS STUDY

We conducted the onsite inspection of the Tennessee MFCU in April 2017. Our review covered the 3-year period of FYs 2014-2016. We based our inspection on an analysis of data from seven sources: (1) Unit documentation; (2) financial documentation; (3) structured interviews with key stakeholders; (4) structured interviews with the Unit's managers and selected staff; (5) a review of a purposive sample of 20 case files that were open at some point during the review period; (6) a review of all convictions submitted to OIG for program exclusion and all adverse actions submitted to the National Practitioner Data Bank during the review period; and (7) observation of Unit operations.

WHAT WE FOUND

The Tennessee MFCU reported strong statistical outcomes for Fiscal Years (FYs) 2014-2016, including 89 indictments, 80 convictions, 62 civil judgments and settlements, and total recoveries of $208 million. From the data reviewed, we found that the Unit generally operated in accordance with applicable laws, regulations, policy transmittals, and the MFCU performance standards. However, we made four findings, two involving the Unit's adherence to program requirements and two potentially affecting the Unit's success and impact: (1) the Unit investigated 11 cases that were ineligible for Federal matching funds because they involved allegations of patient abuse or neglect in non-facility settings; (2) although the Unit reported all convictions and adverse actions to Federal partners, it did not always do so within the established timeframes; (3) the Unit's staff size had not kept pace with increasing Medicaid program expenditures; and (4) the Unit made program integrity recommendations to the Medicaid agency orally, limiting its ability to monitor responses. We also made observations of Unit operations and practices, many of which are favorable.

WHAT WE RECOMMEND

We recommend that the Tennessee MFCU: (1) repay Federal matching funds spent on cases that were ineligible for Federal funding and ensure that investigated cases are within grant authority; (2) implement processes to ensure that it reports convictions and adverse actions to Federal partners within the appropriate timeframes; (3) continue to pursue its proposed expansion plan and work towards increasing Unit staff size to be commensurate with Medicaid expenditures; and (4) develop a policy to document its program recommendations to the State Medicaid agency and to monitor the response to those recommendations. The Unit concurred with all four recommendations.

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