[Federal Register Volume 59, Number 185 (Monday, September 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23692]


[[Page Unknown]]

[Federal Register: September 26, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Inspector General

 

Performance Standards for State Medicaid Fraud Control Units

AGENCY: Office of Inspector General, HHS.

ACTION: Notice.

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SUMMARY: In accordance with section 1902(a)(61) of the Social Security 
Act and the authority delegated to the Inspector General, this notice 
sets forth standards for assessing the performance of the State 
Medicaid Fraud Control Units. These standards will be used in the 
certification and recertification of each Unit and to determine if a 
Unit is effectively and efficiently carrying out its duties and 
responsibilities.
EFFECTIVE DATE: These performance standards are effective on September 
26, 1994.

FOR FURTHER INFORMATION CONTACT:

Paul F. Conroy, Office of Investigations, (202) 619-3210
Joel Schaer, Legislation, Regulations and Public Affairs Staff, (202) 
619-0089

SUPPLEMENTARY INFORMATION:

I. Background

    Since the enactment of the Medicare and Medicaid Anti-Fraud and 
Abuse Amendments of 1977, authorizing the establishment and funding for 
Medicaid Fraud Control Units (MFCUs), 42 States have created such fraud 
control units to investigate and prosecute Medicaid provider fraud and 
patient abuse and neglect in Medicaid funded facilities.
    A MFCU must be a single, identifiable entity of the State 
government composed of (i) one or more attorneys experienced in 
investigating or prosecuting civil fraud or criminal cases who are 
capable of giving informed advice on applicable law and procedures and 
providing effective prosecution or liaison with other prosecutors; (ii) 
one or more experienced auditors capable of supervising the review of 
financial records and advising or assisting in the investigation of 
alleged fraud; and (iii) a senior investigator with substantial 
experience in commercial or financial investigations who is capable of 
supervising and directing the investigative activities of the unit. 
While the preference of the enabling legislation has been for the unit 
to investigate and prosecute its own cases on a Statewide basis, the 
legislative history recognizes that not all States are lawfully able to 
establish the MFCU to do so.
    The State Medicaid agency is required to enter into an agreement 
with the MFCU to refer all suspected cases of provider fraud to the 
unit, and to comply with the unit's requests for provider records or 
computerized data that is kept by the Medicaid agency. To ensure that 
Medicaid overpayments identified by a MFCU in the course of its 
investigations are recovered, each MFCU is required either to undertake 
civil recovery actions or have procedures to refer overpayments for 
collection to other appropriate State agencies.
    The HHS Office of Inspector General (OIG) is delegated the 
authority to certify and recertify the MFCUs to ensure that the units 
fully comply with the governing statute and with Federal regulations 
set forth in 42 CFR part 1007. As part of its recertification process, 
the OIG reviews the State fraud units' applications for recertification 
and may conduct on-site visits to the units to observe their 
operations. The OIG also collects and analyzes statistical data on the 
number and type of cases under investigation, the number of convictions 
obtained, and the amount of recoveries.

II. Use Of Performance Standards

    Section 13625 of the Omnibus Budget Reconciliation Act of 1993, 
Public Law 103-66, amended section 1902 of the Social Security Act by 
adding a new paragraph (a)(61) that establishes a Medicaid State plan 
requirement that, effective January 1, 1995, a State must operate a 
MFCU in accordance with standards to be established by the Secretary.
    The OIG intends to use these performance standards in the 
certification and recertification of a Unit, as well as for assessing 
the effectiveness of a Unit during on-site reviews.

III. Standards For Assessing The MFCUS

    In cooperation with the Units themselves, represented by a working 
group from the National Association of Medicaid Fraud Control Units, 
the OIG has developed twelve performance standards to be used in 
evaluating a Unit's performance. Each of the current Unit directors has 
concurred with the standards and accompanying requirements or 
indicators set forth below.

Performance Standards

    1. A Unit will be in conformance with all applicable statutes, 
regulations and policy directives.
    In meeting this standard, the Unit must meet, but is not limited 
to, the following requirements--
    A. The Unit professional staff must consist of permanent employees 
working full-time on Medicaid fraud and patient abuse matters.
    B. The Unit must be separate and distinct from the single State 
Medicaid agency.
    C. The Unit must have prosecutorial authority or an approved formal 
procedure for referring cases to a prosecutor.
    D. The Unit must submit annual reports, with appropriate 
certifications, on a timely basis.
    E. The Unit must submit quarterly reports on a timely basis.
    F. The Unit must comply with the Americans with Disabilities Act, 
the Equal Employment Opportunity requirements, the Drug Free Workplace 
requirements, Federal lobbying restrictions, and other such rules that 
are made conditions of the grant.
    2. A Unit should maintain staff levels in accordance with staffing 
allocations approved in its budget.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit employ the number of staff that were included in 
the Unit's budget as approved by the OIG?
    B. Does the Unit employ the number of attorneys, auditors, and 
investigators that were approved in the Unit's budget?
    C. Does the Unit employ a reasonable size of professional staff in 
relation to the State's total Medicaid program expenditures?
    D. Are the Unit office locations established on a rational basis 
and are such locations appropriately staffed?
    3. A Unit should establish policies and procedures for its 
operations, and maintain appropriate systems for case management and 
case tracking.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit have policy and procedure manuals?
    B. Is an adequate, computerized case management and tracking system 
in place?
    4. A unit should take steps to ensure that it maintains an adequate 
workload through referrals from the single State agency and other 
sources.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit work with the single State agency to ensure 
adequate fraud referrals?
    B. Does the Unit work with other agencies to encourage fraud 
referrals?
    C. Does the Unit generate any of its own fraud cases?
    D. Does the Unit ensure that adequate referrals of patient abuse 
complaints are received from all sources?
    5. A Unit's case mix, when possible, should cover all significant 
provider types.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit seek to have a mix of cases among all types of 
providers in the State?
    B. Does the Unit seek to have a mix of Medicaid fraud and Medicaid 
patient abuse cases?
    C. Does the Unit seek to have a mix of cases that reflect the 
proportion of Medicaid expenditures for particular provider groups?
    D. Are there any special Unit initiatives targeting specific 
provider types that affect case mix?
    E. Does the Unit consider civil and administrative remedies when 
appropriate?
    6. A Unit should have a continuous case flow, and cases should be 
completed in a reasonable time.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Is each stage of an investigation and prosecution completed in 
an appropriate time frame?
    B. Are supervisors approving the opening and closing of 
investigations?
    C. Are supervisory reviews conducted periodically and noted in the 
case file?
    7. A Unit should have a process for monitoring the outcome of 
cases.
    In meeting this standard, the Unit's monitoring of the following 
case factors and outcomes will be considered--
    A. The number, age, and type of cases in inventory.
    B. The number of referrals to other agencies for prosecution.
    C. The number of arrests and indictments.
    D. The number of convictions.
    E. The amount of overpayments identified.
    F. The amount of fines and restitution ordered.
    G. The amount of civil recoveries.
    H. The numbers of administrative sanctions imposed.
    8. A Unit will cooperate with the OIG and other Federal agencies, 
whenever appropriate and consistent with its mission, in the 
investigation and prosecution of health care fraud.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit communicate effectively with the OIG and other 
Federal agencies in investigating or prosecuting health care fraud in 
their State?
    B. Does the Unit provide OIG regional management, and other Federal 
agencies, where appropriate, with timely information concerning 
significant actions in all cases being pursued by the Unit?
    C. Does the Unit have an effective procedure for referring cases, 
when appropriate, to Federal agencies for investigation and other 
action?
    D. Does the Unit transmit to the OIG, for purposes of program 
exclusions under section 1128 of the Social Security Act, reports of 
convictions, and copies of Judgment and Sentence or other acceptable 
documentation within 30 days or other reasonable time period?
    9. A Unit should make statutory or programmatic recommendations, 
when necessary, to the State government.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit recommend amendments to the enforcement provisions 
of the State's statutes when necessary and appropriate to do so?
    B. Does the Unit provide program recommendations to single State 
agency when appropriate?
    C. Does the Unit monitor actions taken by State legislature or 
State Medicaid agency in response to recommendations?
    10. A Unit should periodically review its Memorandum of 
Understanding (MOU) with the single State Medicaid agency and seek 
amendments, as necessary, to ensure it reflects current law and 
practice.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Is the MOU more than 5 years old?
    B. Does the MOU meet Federal legal requirements?
    C. Does the MOU address cross-training with the fraud detection 
staff of the State Medicaid agency?
    D. Does the MOU address the Unit's responsibility to make program 
recommendations to the Medicaid agency and monitor actions taken by the 
Medicaid agency concerning those recommendations?
    11. The Unit director should exercise proper fiscal control over 
the unit resources.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit director receive on a timely basis copies of all 
fiscal and administrative reports concerning Unit expenditures from the 
State parent agency?
    B. Does the Unit maintain an equipment inventory?
    C. Does the Unit apply generally accepted accounting principles in 
its control of Unit funding?
    12. A Unit should maintain an annual training plan for all 
professional disciplines.
    In meeting this standard, the following performance indicators will 
be considered--
    A. Does the Unit have a training plan in place and funds available 
to fully implement the plan?
    B. Does the Unit have a minimum number of hours training 
requirement for each professional discipline, and does the staff comply 
with the requirement?
    C. Are continuing education standards met for professional staff?
    D. Does training undertaken by staff aid in the mission of the 
Unit?
    These standards may be periodically reviewed and discussed with the 
Units and other State representatives to ascertain their effectiveness 
and applicability. Additional or revised performance standards may be 
proposed when deemed appropriate.

    Dated: September 16, 1994.
June Gibbs Brown,
Inspector General.
[FR Doc. 94-23692 Filed 9-23-94; 8:45 am]
BILLING CODE 4150-04-P