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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 2022

Issued on  | Posted on  | Report number: A-17-23-52000

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 2022 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 2022, (2) conducted risk assessments for 43 programs not susceptible to improper payments and determined the programs were not at risk for improper payments, and (3) published corrective action plans for 9 of the 13 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 6 of 13 programs; also reported an improper and unknown payment rate of less than 10 percent for 7 of the 13 programs.

EY concluded that HHS did not comply with several other PIIA requirements. EY found HHS (1) HHS did not conduct improper payment risk assessments for each program with annual outlays greater than $10 million at least once every three years; (2) did not report an improper and unknown payment estimate for Covid-19 UIP, Temporary Assistance for Needy Families, Foster Care, and Head Start programs; (3) reported improper and unknown payment rates in excess of 10 percent for Medicaid, and Children's Health Insurance Program; (4) had completed minimal recovery audit activities for the identified improper payments for the Medicare Advantage and Medicare Prescription Drug Benefit programs; (5) did not effectively demonstrate improvements to payment integrity for the Medicare Fee For Service program; and (6) has not calculated and reported an improper payment estimate for the state-based exchanges of the Advance Premium Tax Credit program.

23-A-17-075.01 to OS - Closed Implemented
Closed on 10/04/2023
We recommend that HHS either: (1) finalize the development of an approach that would facilitate a risk assessment and review of all programs with annual outlays greater than $10 million 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 over 200 programs that exceed the $10 million threshold in FY 2022, 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.

23-A-17-075.02 to OS - Closed Acceptable Alternative
Closed on 10/04/2023
We recommend that HHS continue to work with OMB and other stakeholders to develop and implement an approach to reporting on TANF IPs going forward. This process will aid in identifying root causes of TANF IPs and allow HHS to report CAPs in the AFR.

23-A-17-075.03 to OS - Closed Acceptable Alternative
Closed on 10/04/2023
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 2023.

23-A-17-075.04 to OS - Closed Implemented
Closed on 10/04/2023
We recommend that HHS continue to work with OMB and other stakeholders to develop and implement an approach to reporting on COVID-19 UIP in FY 2023.

23-A-17-075.05 to OS - Closed Implemented
Closed on 10/04/2023
We recommend that HHS continue to work with OMB and other stakeholders to develop and implement an approach to reporting on Head Start in FY 2023.

23-A-17-075.06 to OS - Closed Implemented
Closed on 10/04/2023
We recommend that HHS focus on the root causes of the IP percentage and evaluate critical and feasible action steps to assist states with their compliance efforts for these requirements. This would include working with the states to bring their respective systems into full compliance with the requirements to decrease the IP rate percentage below 10 percent. HHS should work with the states to follow up on repeat root causes of errors and enhance the CAPs for implementation. In addition, as HHS reviews only 17 states each year for the Medicaid and CHIP IP rate, HHS should continue to follow up with states during the interim period to verify that corrective actions identified after the Payment Error Rate Measurement (PERM) review are being implemented. HHS should also consider sharing corrective action best practices across states to help address these issues.

23-A-17-075.07 to OS - Closed Acceptable Alternative
Closed on 10/04/2023
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. 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' sole recovery audit strategies. If using a recovery audit contractor approach is determined to not be cost-effective, HHS should document how existing programs are cost-effective when compared to the use of a recovery audit contractor.

23-A-17-075.08 to OS - Closed Implemented
Closed on 10/04/2023
While HHS continues to make improvements in certain areas of the Medicare FFS program that have reduced IP, the impact of IP stemming from the two drivers mentioned above outweighed this progress in FY 2022. We recommend that HHS continue to focus on the root causes of the IP percentage, especially the new drivers related to SNF and Hospice, and evaluate and document critical and feasible action steps to meet the Medicare FFS reduction target.

23-A-17-075.09 to OS - Closed Implemented
Closed on 10/04/2023
We recommend that HHS continue to work with OMB and other relevant stakeholders to complete the IP measurement program for the State-based Exchanges to report a full and accurate IP estimate.

View in Recommendation Tracker