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Department of Health and Human Services Met Many Requirements, but It Did Not Fully Comply With the Payment Integrity Information Act of 2019 and Applicable Improper Payment Guidance for the Fiscal Year 2021

Issued on  | Posted on  | Report number: A-17-22-52000

Report Materials

Why OIG Did This Audit

The Office of Inspector General (OIG) must review the Department of Health and Human Services (HHS) compliance with the Payment Integrity Information Act of 2019 (PIIA, P.L. No. 116-117) and related applicable improper payment guidance. Ernst & Young (EY), LLP, under its contract with the HHS OIG, audited the fiscal year 2021 HHS improper payment information reported in the Agency Financial Report (AFR) to determine compliance with PIIA and related guidance from the Office of Management and Budget (OMB).

How OIG Did This Audit

Under its contract with OIG, EY assessed whether HHS complied with the PIIA reporting requirements and provided adequate disclosure within the annual AFR and accompanying materials.

What OIG Found

EY determined that HHS met many requirements but did not fully comply with PIIA. Among the items required for compliance with PIIA that HHS complied with, EY determined that HHS: (1) published the AFR for FY 2021, (2) conducted risk assessments for 38 programs not susceptible to improper payments and determined the programs were not at risk for improper payments, and (3) published corrective action plans for 8 of the 11 programs that are susceptible to significant improper payments as determined by HHS management, OMB or through legislation. EY also determined that HHS developed a plan to meet improper payment and unknown payment reduction targets for 7 of 11 programs; also reported an improper and unknown payment rate of less than 10 percent for 5 of the 11 programs.

EY concluded that HHS did not comply with several other PIIA requirements. EY found HHS: (1) did not report an improper and unknown payment estimate for the Temporary Assistance for Needy Families program, Advanced Premium Tax Credit and Foster Care; (2) reported improper and unknown payment rates in excess of 10 percent for Medicaid, Children's Health Insurance Program, and the Medicare Advantage; and (3) had completed minimal recovery audit activities for the identified improper payments for the Medicare Advantage and Medicare Prescription Drug Benefit programs.

22-A-17-057.01 to OS - Closed Unimplemented
Closed on 01/06/2023
We recommend that HHS either (1) implement a risk assessment strategy that ensures that all programs with annual outlays greater than $10 million are risk assessed at least once every three years or (2) work with OMB to develop an approach and obtain concurrence to perform risk assessments at a level that meets the intent of PIIA. As HHS has 236 programs that exceed the $10 million threshold in FY 2021, HHS should consider what additional resources are needed to perform these risk assessments for an organization as large and complex as HHS or what enhancements can be made to the current process to reduce the time and effort to risk assess each program.

22-A-17-057.02 to OS - Closed Unimplemented
Closed on 01/06/2023
We recommend that HHS continue to work with OMB and other stakeholders to develop and implement an approach to reporting on TANF improper payments in FY 2022. This process will aid in identifying root causes of TANF improper payments and allow HHS to report CAPs in the AFR.

22-A-17-057.03 to OS - Closed Implemented
Closed on 01/06/2023
We recommend that HHS continue to work with OMB and other relevant stakeholders, to complete the improper payment measurement program for the Federally facilitated Exchange in FY 2022. We also recommend that HHS continue to make progress in the development of an improper payment measurement methodology for the State-based Exchange to report an accurate improper payment estimate.

22-A-17-057.04 to OS - Closed Unimplemented
Closed on 01/06/2023
We recommend that HHS continue to work with OMB and other stakeholders to develop and implement an approach to reporting on Foster Care in FY 2022.

22-A-17-057.05 to OS - Closed Unimplemented
Closed on 01/06/2023
We recommend that HHS focus on the root causes of the improper payment percentage and evaluate critical and feasible action steps to assist states with their compliance efforts for these new requirements. This would include working with the states to bring their respective systems into full compliance with the requirements to decrease the improper payment rate percentage below 10 percent. HHS should work with the states to follow up on repeat root causes for errors and enhance the CAPs for implementation. In addition, as HHS reviews only 17 states each year for the Medicaid and CHIP improper payment rate, HHS should continue to follow up with states during the interim period to verify that corrective actions identified after the improper PERM review are being implemented. HHS should also consider sharing corrective action best practices across states to help address these issues.

22-A-17-057.06 to OS - Closed Implemented
Closed on 01/06/2023
We recommend that HHS focus on the root causes of the improper payment percentage and evaluate critical and feasible action steps to assist Medicare Advantage organizations with the compliance efforts. This would include working with the Medicare Advantage organizations, specifically those organizations with repeated noncompliance, to ensure that medical record documentation is sufficient and substantiates clinical diagnoses. These efforts could reduce medical record discrepancies, which would assist HHS in its efforts to decrease the improper payment rate percentage below 10 percent.

22-A-17-057.07 to OS - Closed Unimplemented
Closed on 01/06/2023
We recommend that HHS improve its recovery audit efforts as required under PIIA Section 2(i), to identify and recoup overpayments for Medicare Part C and Medicare Part D unless not deemed cost effective. HHS should also continue to explore alternative vehicles to conduct recovery audits that will fit into the larger Medicare Part C and Medicare Part D programs in FY 2022 in the event that the RADV and PPI-MEDIC programs cannot effectively serve as HHS's sole recovery audit strategies.

View in Recommendation Tracker
Report Type
Audit
HHS Agencies
Office of the Secretary
Issue Areas
Departmental Operational Issues Financial Stewardship
Target Groups
Elderly
Financial Groups
Medicare A Medicare B Medicare C Medicare D Other Funding

Notice

This report may be subject to section 5274 of the National Defense Authorization Act Fiscal Year 2023, 117 Pub. L. 263.