Department of Health and Human Services: Review of the Management
of Inspector General Operations (10-JUN-03, GAO-03-685).
Janet Rehnquist became the Inspector General of the Department of
Health and Human Services (HHS) in August 2001. GAO was asked to
conduct a review of the Inspector General's organization and
assess her leadership, independence, and judgment in carrying out
the mission of the Office of Inspector General (OIG). GAO
examined indicators of the OIG's productivity and compared them
to the organization's past performance. GAO also determined
whether employee morale has been sustained by surveying all OIG
employees and comparing the results to those obtained through an
identical survey administered in 2002. On March 4, 2003, the
Inspector General resigned her office effective June 1, 2003.
However, in this report we refer to Ms. Rehnquist as the
Inspector General.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-685
ACCNO: A07125
TITLE: Department of Health and Human Services: Review of the
Management of Inspector General Operations
DATE: 06/10/2003
SUBJECT: Inspectors general
Productivity in government
Surveys
Performance measures
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-03-685
Report to Congressional Committees
United States General Accounting Office
GAO
June 2003 DEPARTMENT OF HEALTH AND HUMAN SERVICES
Review of the Management of Inspector General Operations
GAO- 03- 685
The credibility of inspectors general is largely premised on their ability
to act objectively and impartially* both in substance and in perception.
Some of the HHS Inspector General*s actions* including her decision to
delay a politically sensitive audit* created the perception that she
lacked appropriate independence in certain situations. The Inspector
General exhibited serious lapses in judgment that further troubled many
OIG staff.
For example, she inappropriately obtained a firearm that she briefly
possessed at her workplace and OIG credentials that identified her as a
law enforcement officer. The Inspector General also initiated a variety of
personnel changes in a manner that resulted in the resignation or
retirement of a significant portion of senior management, disillusioned a
number of higher level OIG officials and other employees, and fostered an
atmosphere of anxiety and distrust. Ultimately, the collective effect of
these actions compromised her ability to serve as an effective leader of
HHS*s Office of Inspector General. Examining productivity trends is
difficult because the work of the OIG often
involves multiyear efforts and the results recorded for a single year are
heavily dependent on work initiated in prior years. Similarly, savings
achieved in any one year can be attributable to the culmination of efforts
made over several years. Given these constraints, GAO noted that
productivity at the OIG over the last 3 years increased in some areas and
declined in others. Overall savings attributable to the OIG*s efforts* as
reported in its semiannual reports to the Congress* increased from $15.6
billion in fiscal year 2000 to $21.8 billion in fiscal year 2002. The
number of individuals convicted for violating HHS program statutes and
regulations* another key indicator of the OIG*s performance* also
increased. On the other hand, declines were noted in the number of
settlements with providers who submitted false claims to the government
and the OIG*s education and outreach activities.
GAO*s survey results showed that employees* overall views of the
organization, management, and their personal job satisfaction generally
remained positive and relatively unchanged between 2002 and 2003. However,
field office staff and those in lower level positions were
considerably more positive in their views of the organization than their
counterparts in headquarters and at the highest levels of management. Two
units in particular* the OIG*s Office of Counsel and the Office of
Evaluation and Inspections* also had marked declines in morale. Both
reported
significantly lower levels of trust and confidence in the organization and
less job satisfaction, compared to 1 year earlier. The Inspector General
generally disagreed with some of our findings. In our response, we address
why these findings raise concerns about the management of the OIG. We also
provided our draft report to the Office of the HHS Secretary, but did not
receive comments. Janet Rehnquist became the Inspector General of the
Department of Health and Human
Services (HHS) in August 2001. GAO was asked to conduct a review of the
Inspector General*s
organization and assess her leadership, independence, and judgment in
carrying out the mission of the Office of Inspector
General (OIG). GAO examined indicators of the OIG*s productivity and
compared them to the organization*s past performance. GAO also determined
whether employee morale has been sustained by surveying all OIG employees
and comparing the
results to those obtained through an identical survey administered in
2002.
On March 4, 2003, the Inspector General resigned her office effective June
1, 2003. However, in this report we refer to Ms. Rehnquist as the
Inspector General.
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 685. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact William J. Scanlon (202) 512- 7114. Highlights of
GAO- 03- 685, a report to the Chairman and Ranking Minority Member, Senate
Committee on Finance and the Ranking Minority Member, Senate Special
Committee on Aging
June 2003
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Review of the Management of Inspector General Operations
Page i GAO- 03- 685 Review of HHS OIG Operations Letter 1 Results in Brief
2 Background 3 Examination of the Inspector General*s Actions Regarding
Independence and Judgment 7 Evaluation of OIG Productivity 20 Measure of
Employee Morale 28 Agency Comments and Our Evaluation 31 Appendix I Scope
and Methodology 36
Appendix II Insufficient Internal Controls Over the OIG*s Credentialing
System 42
Appendix III Comments from the Inspector General 44
Appendix IV GAO Contacts and Staff Acknowledgments 50 GAO Contacts 50
Acknowledgments 50 Tables
Table 1: Select OIG Performance Measures* Fiscal Year 1997 through Fiscal
Year 2002 21 Table 2: Medicare Exclusions Imposed* Fiscal Year 1997
through
Fiscal Year 2002 22 Table 3: Number and Amount of False Claims Act
Settlements, Fiscal Years 2000 through 2002 a 22 Table 4: Number and
Amount of CMPs Imposed, Fiscal Year 1997 through Fiscal Year 2002 23 Table
5: Number of Active CIAs and Newly Negotiated CIAs for Fiscal Year 1997
through Fiscal Year 2002 24 Table 6: Testimonies, Speeches, and Other
Presentations by Component for Fiscal Years 2000, 2001, and 2002 25
Contents
Page ii GAO- 03- 685 Review of HHS OIG Operations Table 7: Number and
Percentage of OEI Projects That Were Begun in Fiscal Years 2000, 2001, and
2002 and Canceled by
February 28, 2003 27 Abbreviations
CIA Corporate Integrity Agreement CMP Civil Monetary Penalty CMS Centers
for Medicare & Medicaid Services DOJ Department of Justice GS General
Schedule HHS U. S. Department of Health and Human Services MOU Memorandum
of Understanding
OAS Office of Audit Services OCIG Office of Counsel to the Inspector
General OEI Office of Evaluation and Inspections OI Office of
Investigations OIG Office of Inspector General OMP Office of Management
and Policy PCIE President*s Council on Integrity and Efficiency
This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.
Page 1 GAO- 03- 685 Review of HHS OIG Operations June 10, 2003 The
Honorable Charles E. Grassley
Chairman The Honorable Max Baucus Ranking Minority Member Committee on
Finance
United States Senate The Honorable John Breaux Ranking Minority Member
Special Committee on Aging
United States Senate This report responds to your October 21, 2002, letter
asking us to conduct a review of the Department of Health and Human
Services (HHS) Office of Inspector General (OIG). As agreed with your
office, we examined the
activities at the OIG under the leadership of Inspector General Janet
Rehnquist, who took office in August 2001 and resigned her office
effective June 1, 2003. 1 Accordingly, the objectives of our review were
to (1) assess the Inspector General*s leadership, independence, and
judgment in carrying out the OIG*s mission, (2) identify changes in the
OIG*s
productivity over the last 3 years, and (3) determine whether employee
morale has been sustained over the last few years. To perform our review,
we interviewed more than 200 current and former OIG employees. We examined
more than 8,000 pages of documents*
including OIG reports, internal studies, personnel records, and policies
and procedures. We also replicated a Web- based employee survey conducted
by the OIG in January 2002* administered in January and February 2003* to
assess any changes in employee views about their work environment. 2 In
addition, to assess the level of cooperation between the OIG and some of
its law enforcement partners, we spoke with officials from the Department
of Justice (DOJ), Medicaid Fraud Control Units from 1 Although Ms.
Rehnquist recently resigned, for purposes of this report, we will refer to
her
as the Inspector General. 2 We included three additional questions
regarding employee morale and trust, and obtained demographic information
about respondents that was not captured in the OIG*s survey. United States
General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 685 Review of HHS OIG Operations several states, and the
National Association of Medicaid Fraud Control Units. We also interviewed
three current or former inspectors general
from other federal agencies to better understand their role and the
conduct expected of them. We performed our review from October 2002
through May 2003 in accordance with generally accepted government auditing
standards. For a detailed description of our scope and methodology, see
appendix I.
During her tenure, the Inspector General took a number of actions that
damaged her credibility and ultimately created an atmosphere of anxiety
and distrust within certain segments of the OIG. Concerns regarding her
independence* including those arising from her decision to delay a
politically sensitive audit and her intervention in ongoing cases in
response to external requests* and personnel changes she initiated among
senior management, disillusioned members of her senior staff, headquarters
employees, and employees working in two OIG units. In
addition, the Inspector General*s brief possession of a firearm at the
workplace and law enforcement credentials represented serious lapses in
judgment. We also believe that the Inspector General should have devoted
more attention to some aspects of OIG operations, such as a major
budgetary shortfall, which limited travel and training and required senior
managers to reallocate staff positions regardless of where those positions
were most needed. Examining the productivity of the OIG in a given time
period is complex. The OIG engages in a variety of activities so that its
productivity involves several dimensions. Moreover, comparing success from
one year to the next is difficult because results are dependent on work in
the pipeline that was initiated in prior years. Given these constraints,
measures of the OIG*s
performance over the last 3 years reveal gains in some productivity
indicators and declines in others. On one hand, overall savings
attributable to its work increased from $15.6 billion in fiscal year 2000
to $21.8 billion
in fiscal year 2002. On the other hand, we identified some downward
changes. For example, there was a significant decline in the number of
settlements with providers who submitted false claims to the government.
As a consequence, the recoveries associated with these settlements also
declined, from about $974 million in fiscal year 2000 to about $519
million in fiscal year 2002. We also found that the OIG*s outreach
activities that increase public and provider awareness of fraud and abuse
problems in health care, and the OIG*s efforts to combat them, have
dropped appreciably since fiscal year 2001. Results in Brief
Page 3 GAO- 03- 685 Review of HHS OIG Operations Employee views of the
organization, management, and their personal job satisfaction remained
positive and relatively unchanged from 2002 through 2003, in the
aggregate. However, we identified several groups of OIG
employees whose morale had been adversely affected during this time
period. In particular, there were considerably more negative views
expressed by those at headquarters and those in senior management
positions than their counterparts in the field and in lower level
positions.
These groups were concerned with a range of issues including the
organization*s respect for staff, clarity of goals, and communication
efforts. In addition, there were distinct declines since 2002 in the
positive
views of employees working in the evaluation unit and the Office of
Counsel. These groups had low levels of trust and confidence in the
organization and expressed a significantly lower level of job satisfaction
compared to 1 year earlier.
In written comments on a draft of this report, the Inspector General
disagreed with some of our findings related to her independence and
judgment, the agency*s productivity, and employee morale. In our response,
we address why these findings raise concerns about the management of the
OIG. We also provided our draft report to the Office of the HHS Secretary,
but did not receive comments. In 1978, Congress passed the Inspector
General Act, creating Inspector
General offices in 12 federal agencies. 3 This followed growing reports of
serious and widespread breakdowns in agencies* internal controls. These
new OIGs were established as independent and objective offices within
their respective agencies to promote economy, efficiency, and
effectiveness in government programs and operations and to prevent and
detect fraud and abuse. In addition, they were created to keep agency
heads and Congress fully informed about problems and deficiencies in
program operations, as well as needed corrective action. Over the years,
the act has been amended to increase the number of inspectors general. The
President, with the advice and consent of the Senate, appoints inspectors
general at cabinet- level departments and other large agencies,
including HHS. The inspectors general at smaller, independent agencies and
other federal entities are appointed by the heads of their organizations
and have essentially the same authorities and duties as those appointed by
3 Pub. L. No. 95- 452, 92 Stat. 1101 (1978) (5 U. S. C. App. (2000)).
Background
Page 4 GAO- 03- 685 Review of HHS OIG Operations the President. Presently,
there are 28 inspectors general appointed by the President and 29
appointed by their agency heads. Inspectors general hold a unique place in
the executive branch of government. They report to and are subject to the
general supervision of their agency heads, but carry out their duties
independently. In addition,
they have reporting obligations to both the heads of their agencies and
Congress. 4 Those that are presidentially appointed are among the few such
appointees that are to be selected *without regard to political
affiliation and solely on the basis of integrity and demonstrated
ability.* 5 To help
maintain their independence and fulfill their mission* which often
involves being publicly critical of their own departments* inspectors
general must familiarize their departmental colleagues with their special
role.
Because they are charged with independently protecting the integrity of
federal programs, inspectors general must be impartial in fact and
appearance. Government Auditing Standards, 6 effective in January 2003,
call for auditors to *be free, both in fact and appearance from personal,
external, and organizational impairments to independence.* These standards
also require that auditors *avoid situations that could lead reasonable
third parties with knowledge of the relevant facts and circumstances to
conclude that the auditor is not capable of exercising
objective and impartial judgment . . ..* Given that their independence and
impartiality is so critical, inspectors general need to be sensitive to
how their actions might be perceived and interpreted by their staffs, the
administration, Congress, and the public.
4 The inspector general Act of 1978, as amended, requires that Inspectors
General report semiannually to the head of the department or agency and
Congress on the activities of the office during the 6- month periods
ending March 31 and September 30. The semiannual reports are intended to
keep the agency heads and Congress fully informed of significant findings
and recommendations initiated by the inspectors general. 5 5 U. S. C. App.
S: 3( a). 6 U. S. General Accounting Office, Government Auditing
Standards: Amendment No. 3 Independence, GAO- 02- 338G (Washington, D. C.:
Jan. 25, 2002). Although issued in 2002,
this revised standard on independence did not become effective until
January 1, 2003, to allow audit organizations sufficient implementation
time. However, the previous standard also stressed the importance of
independence. For example, it required auditors to *be free from personal
and external impairments to independence* and stated that auditors *should
be organizationally independent and should maintain an independent
attitude and appearance.*
Page 5 GAO- 03- 685 Review of HHS OIG Operations About 300 of the
approximately 1,600 HHS OIG employees are employed in its Washington D. C.
headquarters. The remainder work in its 8 regional offices and 85 field
offices in all 50 states. The OIG consists of five
components, or major units, each headed by a deputy inspector general. The
office is led by 13 Senior Executive Service level employees, who all work
in headquarters, and about 60 GS- 15 level employees. 7 About twothirds of
the GS- 15 employees are spread across the various components in
headquarters with the remaining third located in the OIG*s regional
offices.
Consistent with the act, the OIG maintains the Office of Audit Services
(OAS) and the Office of Investigations (OI). 8 They each represent about
40 percent of the OIG*s budget. OAS is responsible for auditing a variety
of HHS health care programs and generally spends about 80 percent of its
resources on projects related to the Medicare and Medicaid programs. 9 Its
findings can result in program improvements and the return of overpayments
to the federal government. In addition, OAS provides audit
support to OI. OI investigators typically pursue allegations of criminal
conduct that they receive from contractors that process Medicare claims,
state Medicaid Fraud Control Units, officials involved in administering
HHS*s many grant programs, and others. When investigators find evidence of
potential wrongdoing, they refer the matter to DOJ for possible
prosecution or the OIG may opt to impose other sanctions. The OIG has
established three additional components to enable it to fulfill its
mission. The Office of Evaluation and Inspections (OEI) conducts short-
term management evaluations of HHS programs that generally involve
significant expenditures and services to beneficiaries or in which
important management issues have surfaced. Its reports are expected to
identify opportunities for improvement in departmental programs. While OAS
may audit the same federal programs examined by OEI, the scope of 7 The
General Schedule (GS) is a personnel classification and pay system used by
the federal government. It includes a range of levels of difficulty and
responsibility for positions graded GS- 1 through GS- 15. Senior Executive
Service managers are subject to a
different system of promotion criteria and higher pay. 8 Section 3( d) of
the Inspector General Act requires each inspector general to appoint an
assistant inspector general for auditing and an assistant inspector
general for investigations.
9 Medicare is the federal health insurance program that serves the
nation*s elderly and certain disabled individuals. Medicaid is a jointly
funded, federal- state health insurance program for certain low- income
people.
Page 6 GAO- 03- 685 Review of HHS OIG Operations OEI studies is typically
broader and would more likely involve the use of surveys, interviews, and
other qualitative research methods. A relatively small component, OEI
represents about 10 percent of the office*s
resources. The Office of Counsel to the Inspector General (OCIG) provides
legal services to the OIG. Among other things, it renders advisory
opinions to health care providers and develops model industry guidance for
compliance with relevant laws and regulations. It also has several
sanctions at its disposal to penalize those who abuse HHS programs.
Finally, the Office of Management and Policy (OMP) is responsible for the
administration of the office, which includes overseeing the budget,
supporting the office*s information technology needs, and working with the
media. It is also responsible for the OIG*s human resource management
activities, but obtains significant personnel support from the
department*s centralized Program Support Center. OCIG and OMP each
represent about 5 percent of the OIG*s budget. The OIG plays an
instrumental role in identifying and investigating individuals and
entities that may have abused HHS programs. It may make referrals to DOJ
for possible prosecution under applicable criminal statutes. In addition,
health care providers who violate federal laws and
regulations may face a variety of civil sanctions. The OIG may make use of
the False Claims Act 10 *the federal government*s primary civil remedy for
false or fraudulent claims* and refer such matters to DOJ. The act imposes
substantial penalties on those who knowingly submit false claims to
Medicare and other federal programs. If a provider has filed a false claim
that DOJ opts not to pursue through the use of the False Claims Act, the
OIG may impose other sanctions, such as civil monetary penalties (CMP),
against that health care provider. CMPs are also imposed for other types
of improper conduct, such as violations of statutory prohibitions on
*kickbacks* in connection with patient
referrals. 11 The OIG also can assess CMPs against hospitals for *patient
dumping,* that is, failing to provide appropriate treatment to patients 10
31 U. S. C. S:S: 3729- 3733. 11 The antikickback provisions of the Social
Security Act generally prohibit persons from paying or soliciting
remuneration in order to induce another to refer business reimbursed under
a federal health care program. See 42 U. S. C. S: 1320a- 7b( b).
Page 7 GAO- 03- 685 Review of HHS OIG Operations presenting a medical
emergency. 12 The amount of the CMP imposed is related to each provider*s
specific violation. The OIG may also exclude
health care providers from participating in Medicare, Medicaid, and other
federal health programs if they have, for example, been convicted of a
criminal offense related to Medicare* including health care fraud or
patient abuse and neglect* or had their license suspended or revoked.
OCIG may also opt to negotiate corporate integrity agreements with health
care providers. 13 Although the OIG focuses the majority of its attention
on health care programs, its activities extend to other areas as well. For
example, the OIG has made the detection, investigation, and prosecution of
absent parents who fail to pay court- ordered child support a priority.
The OIG works with other federal, state, and local agencies to expedite
the collection of these payments. Parents who repeatedly fail to honor
such obligations are subject to criminal prosecution. The OIG*s recent
activities with respect to parents who have defaulted on their child
support payments resulted in
152 convictions and more than $7 million in court- ordered criminal
restitution in fiscal year 2002. We examined the independence that was
reflected in the Inspector General*s decision- making during her tenure.
In addition, we reviewed personnel changes that she initiated and
evaluated her judgment in several instances. We interviewed appropriate
staff, including the Inspector General herself, and examined relevant
documentation.
Current and former OIG headquarters employees frequently expressed
concerns about the Inspector General*s independence. These concerns
centered on several incidents* some of which were widely reported by the
media. Employees also identified other audits and investigations that
12 Under the Emergency Medical Treatment and Active Labor Act (EMTALA),
all hospitals that participate in Medicare are required to screen* and if
an emergency medical condition is present, stabilize* any patient who
comes to the emergency department, regardless of the individual*s ability
to pay. See 42 U. S. C. S: 1395dd( a). 13 Under corporate integrity
agreements, providers agree to take affirmative steps to improve
compliance and report periodically to the OIG. The OIG, in turn, agrees
not to seek further administrative penalties for the behavior in question.
Examination of the
Inspector General*s Actions Regarding Independence and Judgment
The Inspector General*s Independence
Page 8 GAO- 03- 685 Review of HHS OIG Operations they felt may have
suffered from inappropriate management intervention. We concluded that the
following four incidents involved actions on the
part of the Inspector General that at least contributed to the perception
of a lack of independence. In the spring of 2002, the OIG was scheduled to
begin an audit of the Florida Retirement System. The objective was to
evaluate whether the state appropriately charged the federal government
for the pension expenses of state agency employees who help administer
federal programs. The auditors specifically wanted to determine whether
funds designated as federal contributions to the retirement system were
used to provide for pension expenses, and whether the federal contribution
rates were reasonable.
The OIG*s first meeting to discuss this audit with Florida pension
officials was scheduled for April 16, 2002. The day before, the Chief of
Staff to the Florida governor placed an urgent call to the Office of the
HHS Secretary, requesting that the audit be delayed to accommodate the new
pension department director who was going to assume his position in a few
weeks. This call was ultimately referred to the Inspector General, who
instructed her Deputy for Audit Services to delay the audit for a few
days. The Inspector General subsequently ordered a second delay until
July. Due to subsequent scheduling problems affecting both OIG and Florida
pension
staff, the audit team did not begin its work until September 2002.
Allegations made by OIG employees and the media suggested that the federal
government*s contributions to the Florida retirement system could be
excessive and that a report on these contributions might affect the
outcome of the Florida governor*s race that November. When asked about the
incident, the Inspector General stated that she agreed to temporarily
postpone the audit until she could determine the appropriate response to
the request and did not have any involvement in subsequent delays. She
also insisted that audits are frequently delayed, that her decision to
delay the audit was not politically motivated, and that, even if the audit
had begun in April, it would not have been completed before the election.
She told us that, in hindsight, she could have handled the situation
differently by referring the request to the Deputy for Audit Services, but
she did not believe she acted inappropriately in these circumstances.
We believe that the Inspector General did not appropriately investigate
the implications of her decision before agreeing to delay what ultimately
resulted in a report containing significant monetary findings. First,
Florida Florida Pension Audit
Page 9 GAO- 03- 685 Review of HHS OIG Operations pension department
officials could have known that a substantial overpayment existed, and
that a delay in the OIG*s audit could have
benefited the state by changing the time frames used to calculate the
amount it owed. In fact, the draft report on the Florida pension audit
contains a finding that there were excessive federal contributions
totaling
about $517 million, which the state will be required to return or offset
against the amount of future federal contributions to the retirement fund.
Second, given that the team was scheduled to begin its work in April 2002
and had estimated that the audit report would be drafted in 6 months, it
is conceivable that the report could have been available by election day,
if the audit had begun when originally planned. Finally, contrary to the
Inspector General*s recollection, we found that she sent an e- mail
message to her Deputy for Audit Services in April 2002 instructing him to
postpone the audit until July 2002. The Inspector General acknowledged
that, although short delays in commencing audits are common, it was
admittedly unusual for a request for a delay to be directed to, and
resolved at, her level.
In February 2000, the OIG alleged that York Hospital* located in York,
Pennsylvania* had submitted improper claims for services provided to
Medicare beneficiaries. The OIG had notified the hospital that it planned
to impose a CMP and was engaged in negotiations with the hospital when the
Inspector General assumed office. 14 The OIG attorneys had estimated that
York Hospital*s potential liability was $726,000.
Soon after taking office, the Inspector General received a letter from
three members of Congress encouraging her to settle the case quickly.
According to the former Chief Counsel, 15 the Inspector General told him,
*I
hate this case; get rid of it.* Feeling as though they had to move fast,
OIG attorneys lost the benefit of time* which they explained is a key
factor in resolving a case in the government*s favor* and quickly settled
the matter. The former Chief Counsel also noted that the settlement amount
of 14 Prior to imposing a CMP, the OIG typically seeks to resolve the
matter through
negotiations. The negotiation process allows the government to obtain a
monetary recovery and spares the provider from having to admit liability.
When a settlement is not pursued or cannot be reached, the OIG must give
the provider the opportunity for a hearing.
15 On January 8, 2003, the Inspector General waived the attorney- client
privilege pertaining to both her former and current Chief Counsels
concerning matters that arose during her tenure, except with respect to
open investigations pending before the grand jury, matters under court
seal, confidential sources, or other open inquiries. York Hospital
Page 10 GAO- 03- 685 Review of HHS OIG Operations $270,000 was far less
than the attorneys believed the government could have received had
negotiations proceeded as they had planned.
The Inspector General indicated that she in no way directed a settlement
or personally involved herself in the York Hospital negotiations. She also
stated that if her OCIG staff perceived that they were under pressure to
settle the case quickly, they misinterpreted her instructions. She told us
that she simply wanted to settle this case in a timely manner. Although
the Inspector General said she did not intend to pressure her staff, the
former Chief Counsel told us that he and those responsible for negotiating
with hospital officials clearly perceived a sense of urgency. He also told
us that her staff perceived that timing, rather than maximizing the
settlement amount, was her main concern. We believe that her staff acted
accordingly, possibly against the government*s financial interest.
Two medical societies representing providers of lithotripsy 16 services
threatened to sue the Centers for Medicare & Medicaid Services (CMS) over
a regulation resulting in the denial of claims submitted for payment to
the Medicare program. The CMS regulation implemented statutory
restrictions on physician referrals to providers in which the physicians
have an ownership interest and included lithotripsy services within the
scope of these restrictions. The medical societies maintained that
Congress did not intend to include lithotripsy services within the scope
of the statute and intended to litigate this matter, if a settlement could
not be
reached quickly. A partner in the law firm representing the two medical
societies, who was also a friend of the Inspector General, contacted her
for assistance in expediting this case. The Inspector General directed her
former Chief Counsel to contact the law firm and begin negotiating the
matter, which was under the jurisdiction of CMS and not the OIG. The
former OIG Chief Counsel was hesitant to intervene until the appropriate
attorney representing CMS in this matter could be consulted. Because CMS*s
attorney was unavailable for about a week, the former Chief Counsel took
no action during this time. According to the former Chief Counsel, the
Inspector General admonished him severely when she discovered that he had
not followed her instructions to immediately contact the law firm. 16
Lithotripsy is a procedure typically performed by urologists to break up
kidney stones without the need for surgery. Lithotripsy Claims
Page 11 GAO- 03- 685 Review of HHS OIG Operations The Inspector General
asserted that her office had a legitimate role in this matter. Although
the issue was being disputed between the medical
societies representing the lithotripsy providers and CMS, the Inspector
General believed that her OCIG staff, which advised Congress on physician
referral matters, was in a unique position to resolve the issue. She
pointed out that she did not personally involve herself in the matter, nor
instruct her staff about how to resolve the issue. Instead, she stated
that her goal was to help resolve a matter in which her attorneys had vast
expertise.
Despite the OIG*s expertise in this matter, we agree with the former Chief
Counsel that it would have been inappropriate for the OIG to intervene by
contacting the law firm to initiate discussions, particularly in the
absence of CMS*s attorney. If the Inspector General wanted OCIG*s
expertise to be offered to CMS, it would have made sense for OCIG to
contact CMS*s attorney before proceeding. CMS*s attorney responsible for
handling this matter told us that she would have been troubled if the OIG
had
commenced discussions without her agency*s participation. Given the
Inspector General*s personal relationship with the medical societies*
attorney and the OIG*s lack of jurisdiction in the matter, her actions
created the impression that she was more interested in helping a friend
than offering advice to CMS, which called her independence into question.
On February 20, 2001, the OIG sent its draft report on adjusted community
rate proposals for Medicare+ Choice organizations 17 to CMS for comment.
This report was of potentially significant interest to congressional
committees, which were then considering the adequacy of payments in the
Medicare+ Choice program. While OIG guidelines generally provide up to 45
days for audited entities to comment on its draft reports, the publication
of this report was delayed for 14 months while the OIG waited for comments
from CMS. Ultimately CMS agreed with the OIG*s findings in written
comments on April 16, 2002.
Some employees alleged that the delay in issuing this report reflected a
lack of independence on the Inspector General*s part. They suggested that
the Inspector General should have taken a more active role in expediting
17 Medicare+ Choice was designed to expand Medicare beneficiaries* health
plan choices by encouraging the wider availability of HMOs and other types
of health plans, such as preferred provider organizations. Adjusted
community rate proposals detail the revenue that Medicare+ Choice
organizations project is needed to cover contributions to profit or
reserves and the direct medical and administrative costs of delivering
services to enrollees. Adjusted Community Rating Audit
Page 12 GAO- 03- 685 Review of HHS OIG Operations the report*s issuance.
They pointed out that the CMS Administrator initially disagreed with the
draft report*s findings and hired a consultant to validate the OIG*s
results. According to these employees, it took CMS more than a year to
replicate the OIG*s work and determine that it agreed
with the report*s findings. OIG employees told us that the Inspector
General tolerated this situation because she was unwilling to issue a
relatively controversial report without the benefit of CMS*s agreement.
The delay in issuing this report diminished its usefulness because
congressional committees were focused on other concerns by the time the
report was finalized. The Inspector General stated that she was only
vaguely familiar with this project but was certain that she did not direct
her audit team to delay the report*s issuance. Although she recalled that
the CMS Administrator initially disagreed with the report*s conclusions,
she told us that she did not remember the specific time frames associated
with it. Our evidence shows that the Inspector General*s staff tried to
enlist her assistance in expediting CMS*s comments to no avail. By
permitting CMS to delay the report*s publication, the Inspector General
created the appearance among her staff of being unduly influenced by CMS.
In our view, a time sensitive report of congressional interest should
have, at the very least, garnered more of the Inspector General*s
attention.
During the Inspector General*s tenure, staff turnover among the OIG senior
headquarters staff has been considerable. Between September 2001 and
November 2002, at least 20 OIG senior managers retired, resigned, or were
reassigned. Ten of these were Senior Executive Service 18 employees, most
of whom had over 25 years of government service and had played an
important leadership role at the OIG for many years. The others were GS-
15 employees who were instrumental in carrying out specific office
functions. 19 The Inspector General*s representative characterized these
changes as voluntary and beneficial to the overall mission of the office.
18 In several important areas, including reassignments and reductions in
grade, federal regulations allow greater flexibility for personnel
decisions regarding Senior Executive Service employees than for general
schedule employees. Under these regulations, the Inspector General had
more discretion with respect to Senior Executive Service- level managers
in the OIG than GS- 15- level managers. 19 The Inspector General made many
of these changes by taking advantage of opportunities presented to her
when two of the Deputy Inspectors General decided to retire. The Inspector
General*s
Personnel Changes
Page 13 GAO- 03- 685 Review of HHS OIG Operations The Inspector General
told us that these changes were made to provide senior managers with new
insights into agency operations and to
capitalize on the fresh perspectives they could bring to their new jobs.
However, we found that the sudden and unexplained nature of many of the
Inspector General*s actions resulted in a widespread perception of
unfairness among her staff. In addition, the promotion of a close advisor
to
the Inspector General, to the position of Director of Public and
Congressional Affairs, raises a legal concern.
We found the circumstances surrounding the departures of eight senior OIG
managers to be particularly troubling. Four of these eight managers who
left the OIG or were detailed elsewhere were members of the Senior
Executive Service. One of the four took an early retirement after the
Inspector General proposed that the department assign him to a position
outside of his local commuting area with the assumption that he would
retire instead. Another retired after most of his responsibilities were
reassigned to another official or eliminated. A third resigned about 6
weeks after the Inspector General reassigned his job responsibilities and
directed that he not report to his office and instead spend his time
seeking new employment. Finally, one manager was detailed to a temporary
position within HHS and was also instructed not to return to his OIG
office. He is currently seeking new employment. These four individuals
told us that the Inspector General had not informed them of specific
deficiencies in their performance, given them any opportunity to improve
their performance, worked with them to find a mutually satisfactory
resolution to her concerns, or provided an adequate rationale for her
decisions to remove them from their positions. Moreover, three of these
managers told us that they were shocked with the urgency
she displayed when asking them to leave the OIG, and two perceived that a
single event ultimately led to the Inspector General*s decision to remove
them. For example, in one instance, a senior manager linked his removal to
an incident in which a problem had to be resolved in the Inspector
General*s absence. Although he successfully contacted her and proposed a
solution, she did not wish to address the matter until her return to the
office. He delayed taking action, as she directed. However, according to
this official, when the Inspector General returned, she was angry and
suggested that he had tried to pressure her into accepting his proposed
solution, essentially excluding her from the decision- making process.
Describing their departures from the OIG, these four individuals told us
that they felt they had no alternative but to leave their positions. Other
OIG staff also told us that these four changes* all of which were
initiated by the Inspector General* were involuntary.
Page 14 GAO- 03- 685 Review of HHS OIG Operations The other four
individuals whose departures were particularly troubling were GS- 15 level
managers from OMP, OCIG, OI, and the Inspector
General*s Immediate Office. 20 One manager resigned after being reassigned
twice within 9 months. According to several OIG employees, the purpose of
this manager*s second reassignment was to accommodate the Inspector
General*s preference that this manager no longer work in the OIG
headquarters building. The Inspector General gave no explanation why she
wanted this individual to work in a remote location. A second was
reassigned to an interagency task force for an indefinite period after his
position was abolished. The Inspector General reportedly no longer wanted
him in the OIG headquarters building. The third individual was temporarily
reassigned to a position at another HHS agency and subsequently resigned.
He told us that his duties were curtailed following a briefing of
congressional staff in which he voiced an official OIG opinion that
conflicted with that of CMS. The fourth individual retired after being
reassigned from the Inspector General*s Immediate Office to another
component. Some staff members perceived that the reassignment of this
individual resulted, in part, from her requesting* without the Inspector
General*s knowledge* a gun safe to properly store a firearm that the
Inspector General had recently acquired. Like the reassignments at the
senior executive level, the Inspector General initiated these changes.
Some of the employees we interviewed were skeptical that these changes
were necessary and asserted that they actually damaged the organization*s
effectiveness. Specifically, they were concerned with the sheer number of
personnel moves made in a relatively brief period of time and that their
new component heads lacked experience in the areas that they were going to
lead. They also expressed concerns about the Inspector General*s
motivations because they felt that the changes generally had not been
adequately explained to the employees involved. The abruptness of these
changes and the lack of any overall explanation for them heightened
employees* mistrust. Although some employees were supportive of the
Inspector General*s organizational changes or felt unaffected by her
actions, comments made during our interviews and in our employee survey
highlighted the frustration many employees* especially at headquarters*
felt due to the perception of unfairness associated with
20 The Immediate Office provides direct support to the Inspector General.
It is not affiliated with the OIG*s five components, and it maintains a
relatively small staff of about 10 employees.
Page 15 GAO- 03- 685 Review of HHS OIG Operations these personnel changes.
We found that the magnitude and abruptness of the Inspector General*s
actions raised fear and anxiety among her staff. We asked the Inspector
General about each of the individuals to obtain her
rationale in making these personnel decisions. The Inspector General told
us that she was concerned about the individuals* privacy and that she was
uncomfortable discussing the circumstances involving these managers with
us.
Finally, we identified one matter giving rise to a legal concern. We
obtained information suggesting that a member of the OIG*s staff may have
been preselected for a GS- 15 position as the Director of Public and
Congressional Affairs. 21 Specifically, as explained below, e- mail
communication by one of the Inspector General*s closest advisors implies
that a decision had been made to promote this employee to the GS- 15 level
prior to the initiation of a competitive selection process. Citing the
individual*s outstanding performance as a GS- 14 in the same office, 22
the Inspector General had directed the employee*s supervisor to promote
her to a GS- 15 at the earliest opportunity. Shortly thereafter, an
advisor to the Inspector General contacted the individual*s supervisor and
emphasized that the Inspector General believed that it was important for
the individual to have a GS- 15 in her current position. The advisor urged
him to initiate
the promotion process so that the GS- 15 would be effective on the date of
her eligibility for promotion, or soon thereafter. The advisor further
explained that the Inspector General had made a commitment when the
individual agreed to take the GS- 14 position that she would be promoted
to a GS- 15 one year later. In addition, the OIG included a *selective
placement factor* in the GS- 15 position description, reportedly to favor
the employee. OIG staff told us that, although the GS- 15 position was
advertised both inside and outside of the agency, there was a widespread
perception that the selection had already been made. This perception may
21 Preselection is prohibited under federal law. Specifically, under 5 U.
S. C. S: 2302( b)( 6), an employee with personnel authority may not grant
any preference or advantage not authorized by law, rule, or regulation to
any employee or applicant for employment (including defining the scope or
manner of competition or the requirements for any position) for the
purpose of improving or injuring the prospects of any particular person
for employment.
22 One year before her promotion to a GS- 15, this individual had been
promoted from a GS13 position in OCIG to a supervisory GS- 14 position in
the OIG*s Office of Public and Congressional Affairs, following the
reassignment of the GS- 15 staff person who had previously performed
similar duties.
Page 16 GAO- 03- 685 Review of HHS OIG Operations account for the fact
that there was only one applicant for the position. While the information
we obtained raises concern about a possible preselection, we have not
conducted the type of formal, factual inquiry that would ultimately be
necessary to determine whether the Inspector General*s actions were
unlawful. 23 We identified several matters that raised concerns about the
adequacy of the Inspector General*s leadership. Some employees questioned
the
Inspector General*s judgment in regard to her possession of a firearm in
the office, as well as law enforcement credentials. Others raised concerns
about the manner in which she conducted her business travel. In addition,
several employees interpreted some of the Inspector General*s actions as
demonstrating a lack of interest in key office operations. In the fall of
2002, the Integrity Committee of the President*s Council on Integrity and
Efficiency (PCIE) 24 received an allegation that the Inspector General had
improperly requested and obtained a firearm from her Deputy Inspector
General for Investigations. Subsequently, the Integrity
Committee received a second allegation that the Inspector General had
improperly obtained supervisory special agent law enforcement credentials.
After consulting with DOJ officials, who declined to pursue
these allegations, the Integrity Committee proceeded with its
investigation. The PCIE forwarded its report to the Deputy Secretary of
HHS on April 4, 2003. The PCIE found that the Inspector General had
obtained a firearm from an OIG special agent and maintained it in her
Washington, D. C. office for a short period of time. An OIG Memorandum of
Understanding (MOU) with DOJ and the Federal Bureau of Investigation set
forth a process for deputizing OIG special agents to allow them to carry
firearms, make
arrests, and execute warrants when carrying out their law enforcement 23
We are referring this matter to the Office of Special Counsel of the Merit
Systems Protection Board, which is tasked with investigating such
allegations. 24 The PCIE, an organization composed primarily of the
presidentially appointed inspectors general, was created to address
integrity, economy, and effectiveness issues that transcend individual
government agencies, and increase the professionalism and effectiveness of
inspector general personnel throughout the government. The PCIE*s
Integrity Committee is charged with receiving, reviewing, and
investigating allegations of administrative misconduct against Inspectors
General, and, in certain cases, members of their staffs. The Inspector
General*s
Judgment Report by the President*s Council on Integrity and Efficiency
Page 17 GAO- 03- 685 Review of HHS OIG Operations functions. 25 However,
the PCIE found that the Inspector General had not met the job
classification and training requirements outlined in the MOU and had not
been deputized. In an interview with PCIE investigators, the
Inspector General stated that she believed that inspectors general were
statutorily authorized to possess firearms and that she had not reviewed
the MOU for deputation of OIG special agents. In regard to the second
allegation, the PCIE found that the Deputy Inspector General for
Investigations obtained supervisory special agent credentials for the
Inspector General because she did not want the Inspector General to have
any difficulty gaining access to secured areas in the event of a terrorist
incident. 26 The Inspector General told PCIE investigators that other
inspectors general did not seem to know how to handle the issue of access
to secured areas in the event of a terrorist attack, but she had never
asked them if they had law enforcement
credentials. She also told investigators that she had the credentials in
her possession for a short time, and returned them to her Deputy for
Investigations to store in a safe. (Before the PCIE investigated this
issue, concerns about the ease with which OIG credentials could be
obtained
came to our attention. We examined the internal controls for the
credentialing system and identified several weaknesses, which are
described in appendix II. OIG officials have since told us that they have
taken steps to correct these weaknesses.)
The PCIE report identified several criminal statutes as relevant to the
allegations, including provisions of federal and District of Columbia law
concerning the possession of firearms, which are applicable to those
working in federal buildings. At the conclusion of the investigation, DOJ
officials advised the PCIE that it declined to prosecute the Inspector
General for any possible violations of criminal statutes regarding the
possession of a firearm or law enforcement credentials. In addition, in
the letter to the Deputy Secretary of HHS accompanying its report, the
PCIE advised that the Inspector General*s resignation mooted the need to
take any administrative actions against her. It also expressed deep
concern 25 The PCIE report stated that under OIG policy employees could
not possess or carry firearms without being deputized, as set forth in the
MOU. 26 The credentials stated that Ms. Rehnquist was a supervisory
special agent of the Office of Inspector General authorized to carry
firearms, execute warrants, administer oaths, make arrests, and perform
other duties as authorized by law and/ or departmental regulations.
Page 18 GAO- 03- 685 Review of HHS OIG Operations about the actions of
some OIG employees who facilitated the Inspector General*s acquisition of
these items.
Another issue that persistently surfaced during our review was perceptions
of the propriety of the Inspector General*s business travel. As the head
of a large organization with offices nationwide, the Inspector General is
entitled* and expected* to periodically visit these offices to provide
oversight, guidance, and support to her staff. In addition, the Inspector
General may engage in other business- related travel, such as attending
conferences and meeting with provider organizations and other external
groups. Inspectors general* like other government employees*
are not prohibited from planning personal travel in conjunction with their
business trips. However, we spoke with current and former inspectors
general from other federal agencies, and they told us that they generally
refrain from including personal travel with their business trips for fear
of raising suspicion about their motivation or integrity. While no one
alleged that the Inspector General violated travel regulations, some
current and former officials questioned her motivation for planning
certain trips that included a personal element, such as sightseeing
activities* sometimes with two senior OIG managers.
To better understand the purpose of the Inspector General*s travel, we
examined all of the documentation related to her trips, including travel
orders, vouchers, and detailed itineraries prepared by her office. We
found that during the first 4 months of the Inspector General*s tenure she
took four trips outside of the Washington D. C. area. None of these trips
included a personal element or any companions. However, over the next 12
months, the Inspector General traveled eight more times and included
personal activities on half of these trips. In addition, she invited one
or two senior managers to accompany her on six of these eight trips.
Three of the Inspector General*s trips in particular raised concerns,
arising from a perception that this travel was motivated by other than
official duties. In some of these cases, large blocks of time could not
always be accounted for. For example, the Inspector General took one trip
to San Francisco and Phoenix that spanned 8 days and included 2 days of
personal time on a weekend. In examining the business portion of this
trip,
we were only able to determine that the Inspector General made two
halfhour speeches and traveled between these cities and Washington, D. C.
Further, in some cases, personal activities* sometimes involving the
participation of the two senior managers* were included. While we did not
validate the managers* activities on these trips beyond their own
assertions, we believe that it is appropriate for the Inspector General to
The Inspector General*s Travel
Page 19 GAO- 03- 685 Review of HHS OIG Operations ask managers to
accompany her as needed on business- related travel. However, including
her colleagues in her personal activities during travel
contributed to a perception that the business reasons for these trips were
pretexts and that the trips were planned solely for nonbusiness purposes.
In responding to our inquiries regarding the Inspector General*s travel,
she indicated that all of her trips were made for legitimate business
purposes. She also told us that she was not concerned with any perceptions
OIG employees may have had about her travel. Finally, in a written
response to our inquiry regarding approximately 3 days of unaccounted time
during her San Francisco and Phoenix trip, she indicated that she spent
her time performing office work and preparing for one of her two speeches.
She
offered no other elaboration on her business activity. During our study,
the Deputy Inspectors General were grappling with a major budgetary
shortfall due to aggressive hiring in fiscal year 2002, lower than
expected attrition throughout the OIG, and uncertain funding levels for
fiscal year 2003 that had yet to be resolved. Senior OIG officials told us
that they were concerned that, without a quick solution, they might
ultimately violate the Antideficiency Act. 27 In February 2003, the Deputy
Inspectors General were developing various proposals to react to their
forecasted budget shortfall. The deputies had severely limited travel,
training, and other human resource activities in their components. In
addition, they were reallocating staff positions to accommodate the
budget* regardless of where the positions were actually needed. Positions
that became vacant through attrition were transferred to the overstaffed
components. By gaining the vacant positions, the overstaffed components
were able to reduce the number of staff considered to be in excess in
their units. Some of the deputies expressed strong resentment about the
chaos this situation caused within their components. For example, a
relatively small component that lost a key member of one of its functional
teams could not replace that individual, and instead had to continue to
meet mission goals
with one fewer supervisor. Other component heads explained that the lack
of funds to perform routine duties in the field affected morale and could
impact long- term productivity.
27 Among other things, the Antideficiency Act prohibits agencies from
incurring financial obligations that exceed their available budget
authority. See 31 U. S. C. S: 1341( a). The Inspector General*s
Leadership in Resolving Budgetary Problems
Page 20 GAO- 03- 685 Review of HHS OIG Operations This situation could
have been avoided if OIG leadership had developed a human resource hiring
and development plan that contained realistic
budget projections and hiring goals that all deputies would have to
follow. Historically, the Inspector General*s Principal Deputy was
responsible for ensuring that component heads worked together to carry out
such a plan, but the Principal Deputy position had been vacant for months.
As a result, component heads we spoke with felt that they did not have the
authority to fill the leadership void that developed in this instance, and
relied on the Inspector General to impose whatever fiscal constraints were
necessary to establish an equitable budget allocation among the
components. While the Inspector General expressed concern about funding
issues, she did not take aggressive steps to remedy the situation.
Although the deputies ultimately resolved their financial situation, at
the time of her resignation, the component heads were still struggling
among themselves with these budgetary challenges.
The OIG conducts a variety of activities that aim to improve program
operations, identify and recover overpayments, and investigate and
sanction those who violate statutes and regulations governing HHS
programs. Evaluating the effect of the Inspector General*s recent actions
on productivity is difficult to assess in the short term. For example, in
addition to the decisions she made and the personnel moves she initiated,
a variety of other factors contribute to productivity. Two factors make it
impossible to reach an overall conclusion about OIG productivity for any
limited period of time. First, fluctuations in performance are to be
expected in any given year, given the multitude of the OIG*s activities.
Second, it is difficult to compare performance from one year to the next
because the results in one period are heavily dependent on work in the
pipeline that was initiated in prior years. For example, it could take 2
or 3 years from the time a project is initiated until a recommendation is
made and subsequently implemented; investigating potential criminal
activity and prosecuting the individuals involved could take even longer.
Many of the OIG*s productivity measures remain comparable to prior years
or
showed increases, but we found that several other key indicators of
performance have declined since the Inspector General took office.
We analyzed a wide variety of performance measures to evaluate the OIG*s
effectiveness and found that many of these measures indicated that the
Evaluation of OIG
Productivity Savings, OAS Reports, and Convictions
Page 21 GAO- 03- 685 Review of HHS OIG Operations OIG may be performing
well, as table 1 shows. For example, in its semiannual reports covering
fiscal year 2002, the OIG identified almost $22 billion in savings
attributable to its work. 28 The OIG consistently reported
increases in these savings since fiscal year 1997. In addition, the number
of OAS reports published has increased each year since fiscal year 2000.
Also, the number of convictions resulting from the OIG*s investigative
referrals has steadily increased over the last 6 years.
Table 1: Select OIG Performance Measures* Fiscal Year 1997 through Fiscal
Year 2002
Fiscal year 1997 Fiscal year 1998
Fiscal year 1999 Fiscal year 2000
Fiscal year 2001 Fiscal year 2002
Savings (in billions of dollars) $7.6 $11.6 $12.6 $15.6 $18.0 $21.8 Number
of OAS reports 324 187 207 300 311 333 Convictions 215 261 401 414 423 517
Source: HHS OIG.
OI officials, who told us that the number of convictions is an important
measure of their success, also said that they appear to be on target in
achieving even more convictions in fiscal year 2003. At the midpoint of
the current fiscal year* March 31, 2003* the OIG reported 320 convictions.
Although it is difficult to measure the *sentinel* effect of some of the
OIG*s activities, it has taken steps to encourage lawful and ethical
conduct by the health care industry, which we believe should be
acknowledged. For
example, in recent years the OIG has actively worked with the private
sector to develop compliance guidance to prevent the submission of
improper claims and to discourage inappropriate conduct by providers. In
March 2003, the OIG issued compliance guidance for ambulance suppliers.
This was followed by the publication of compliance guidance for
pharmaceutical manufacturers in April 2003.
Like convictions, the number of providers excluded from the Medicare
program is a strong indicator of OI effectiveness. Although the number of
28 This amount consisted of almost $20 billion in savings related to the
implementation of
OIG recommendations and other actions, $426 million saved as a result of
OIG audits, and $1.5 billion recovered due to OIG investigations.
Exclusions from Medicare
Page 22 GAO- 03- 685 Review of HHS OIG Operations exclusions imposed
declined in fiscal year 2002, reversing a trend of increases since fiscal
year 1999, we were unable to determine whether this decline reflects
diminishing productivity. The OIG Chief Counsel explained that, in 2002,
the Department of Education became responsible for processing most of the
exclusions of health care providers who had
defaulted on the repayment of their federally funded student loans. The
Chief Counsel told us that in 2001, when the OIG still had this
responsibility, it excluded 518 providers who had defaulted on these
loans.
In 2002* the transition year* the number of such providers excluded by the
OIG dropped to 166. Table 2 shows the OIG*s exclusions imposed since
fiscal year 1997.
Table 2: Medicare Exclusions Imposed* Fiscal Year 1997 through Fiscal Year
2002 Fiscal year 1997 Fiscal year 1998 Fiscal year 1999 Fiscal year 2000
Fiscal year 2001 Fiscal year 2002
2,719 3,021 2,976 3,350 3,756 3,448 Source: HHS OIG.
We found declines in the use of sanctions available to the OIG. For
example, we noted reductions in the number of settlements and recovery
amounts that result from the OIG*s False Claims Act referrals to DOJ.
Similarly, there were declines in the number of CMPs and CIAs recently
imposed. Table 3 shows that both the number of settlements and amount of
recoveries declined significantly in fiscal year 2002, compared to fiscal
years 2000 and 2001.
Table 3: Number and Amount of False Claims Act Settlements, Fiscal Years
2000 through 2002 a Fiscal year 2000 Fiscal year 2001 Fiscal year 2002
Number of settlements 245 248 161 Amounts recovered (in millions) $974.0
$2,063.0 b $518.7
Source: HHS OIG. a The OIG was unable to provide comparable data for
fiscal years 1997 through 1999. b A substantial portion of the amount
recovered in fiscal year 2001 is attributable to a single settlement of
$875 million. Settlements, Recoveries, CMPs, and CIAs
Page 23 GAO- 03- 685 Review of HHS OIG Operations OIG officials told us
that its False Claims Act cases are strongly tied to DOJ*s efforts to
combat health care fraud, which have had to compete
with investigative resources dedicated to the September 11, 2001,
terrorist attacks. In addition, DOJ has reduced the number of its national
health care antifraud initiatives in recent years as well as the number of
individual cases that it pursues under the auspices of each initiative.
OIG officials also attribute this decline to its increasing emphasis on
program compliance, which the OIG believes has had a sentinel effect on
providers. Although the number of False Claims Act settlements and
recoveries have declined, DOJ officials and the Medicaid Fraud Control
Unit representatives we spoke to told us that they were pleased with the
quality of the support they received from the OIG in pursuing abusive or
fraudulent providers. However, several of these officials were concerned
that the OIG could not devote more resources to assist them in their
investigations.
Another important indicator of OIG productivity is the imposition of CMPs.
As shown in table 4, the number of these cases had a marked decline since
fiscal year 2000.
Table 4: Number and Amount of CMPs Imposed, Fiscal Year 1997 through
Fiscal Year 2002
Fiscal year 1997 Fiscal year 1998
Fiscal year 1999 Fiscal year 2000
Fiscal year 2001 Fiscal year 2002
Number of CMP cases 16 58 67 58 30 34 Amount of CMPs (in millions of
dollars) $0.5 $2.2 $1.9 $9.7 $1.1 $2.4
Source: HHS OIG.
In explaining the declining number of CMPs imposed, OIG officials offered
two explanations. First, they told us that the increase in convictions may
account for the decline in CMPs, which are typically imposed when more
stringent penalties cannot be used. Because convictions have recently
increased, there would be fewer opportunities to impose CMPs. Second,
officials suggested that the office*s previous aggressiveness in pursuing
patient dumping cases* which generally made up between 65 and 90 percent
of all CMPs imposed each year* has been a strong deterrent. The officials
also emphasized that patient dumping cases have proven to be resource
intensive. As a result, the OIG can only afford to pursue the most
egregious cases.
Page 24 GAO- 03- 685 Review of HHS OIG Operations CIAs, typically
negotiated in conjunction with False Claims Act settlements, are also an
indicator of the OIG*s productivity. CIAs consist of *integrity
provisions* that are intended to ensure that a provider*s future
transactions with Medicare and other federal health care programs are
proper and valid. Such provisions include implementing an OIG- approved
compliance program, use of an independent review organization to annually
review provider billings, and other periodic monitoring and reporting
requirements. Providers accept the imposition of the CIAs and, in turn,
OCIG agrees not to seek additional administrative sanctions. As table 5
shows, the number of active CIAs, as well as the number of newly
negotiated CIAs, has declined since 2001.
Table 5: Number of Active CIAs and Newly Negotiated CIAs for Fiscal Year
1997 through Fiscal Year 2002
Fiscal year 1997 Fiscal year 1998
Fiscal year 1999 Fiscal year 2000
Fiscal year 2001 Fiscal year 2002
CIAs active at end of the fiscal year 122 340 418 470 498 324 New CIAs
negotiated during the fiscal year 83 233 138 101 112 63
Source: HHS OIG.
OCIG officials attributed the most recent decline to several factors.
First, the number of civil False Claims Act settlements declined between
2001 and 2002, resulting in fewer providers with whom to negotiate CIAs.
Second, in fiscal year 2002, OCIG began implementing the Inspector
General*s November 20, 2001, *Open Letter to Health Care Providers*
regarding CIAs. CIAs had long been a concern of providers because of the
costs associated with implementing the specified integrity provisions*
such as retaining an independent review organization each year to review a
statistically valid sample of billings. The November open letter
announced that the OIG*s policies and practices regarding CIAs were being
modified in response to those concerns.
The letter noted, in part, that the OIG would no longer seek to negotiate
CIAs with every provider settling a False Claims Act case with the
government. In some situations, corporate compliance matters would be
negotiated separately, after settlement of the False Claims Act case. The
letter also indicated that the OIG would consider increasing its reliance
on providers* internal audit capabilities. For example, some providers may
not be required to retain an independent review organization. Similarly,
Page 25 GAO- 03- 685 Review of HHS OIG Operations not all billing reviews
would be subject to statistically valid random sampling. Instead, these
providers would be able to self- certify compliance
based on the error rate indicated by reviewing an initial sample of their
billings. Further, the new approach to CIAs could also be applied to
previously negotiated CIAs. As a result, in fiscal year 2002, OCIG
renegotiated 94 existing CIAs associated with False Claims Act
settlements. The revised CIAs contained *certification agreements,*
permitting providers to self- certify their compliance with the specific
provisions contained in their agreements, instead of retaining an external
review organization for this verification.
We also found that there has been a considerable drop in the testimonies
and outreach and education activities performed by OIG employees. Prior to
the current Inspector General*s tenure, the OIG frequently provided
assistance to congressional staff developing legislative proposals related
to HHS programs, offered informal advice about program oversight, and
testified at congressional hearings. In addition, OIG employees routinely
presented the results of their work at conferences, meetings, and in other
educational forums. However, as shown in table 6, the number of
testimonies and speeches and other presentations by OIG employees
revealed a significant decline in the assistance provided during the last
fiscal year* especially among OCIG employees.
Table 6: Testimonies, Speeches, and Other Presentations by Component for
Fiscal Years 2000, 2001, and 2002
Testimonies Speeches and other presentations Fiscal year 2000
Fiscal year 2001 Fiscal year 2002
Fiscal year 2000 Fiscal year 2001
Fiscal year 2002
Inspector General and Principal Deputy 7 3 6 3 3 7 OAS 0 1 0 4 24 17 OI 1
0 0 25 93 49 OEI 5 4 0 52 45 32 OMP 0 0 0 0 0 8 OCIG 1 2 0 58 49 15
Total 14 10 6 142 214 128
Source: GAO analyses of HHS OIG data.
Outreach and Education Activities
Page 26 GAO- 03- 685 Review of HHS OIG Operations We spoke with several
congressional staff working for committees with jurisdiction over HHS
programs who told us that they were not satisfied
with the level of support they were currently receiving from the OIG.
While formal requests for assistance were fulfilled, congressional staff
indicated that OIG employees no longer discussed issues with them
informally, as they had in the past. In our interviews, primarily at
headquarters, several OIG employees recognized that they were no longer
providing what congressional staff members considered to be a valuable
service and what they considered to be a meaningful part of their work.
OIG officials emphasized that their responsiveness to Congress is still an
extremely high priority. They explained that the Inspector General
instituted a more centralized approach to providing assistance to
congressional staff and other external groups than had her predecessors in
an attempt to ensure the quality and appropriateness of the assistance
provided. In response to the declining number of testimonies, OIG senior
officials told us that they are very willing to appear at congressional
hearings when they have relevant material to present. However, they
explained that the Inspector General does not consider the number of
testimonies to be a relevant performance measure.
In regard to speeches and other presentations, the decline was partly due
to a policy change in the spring of 2002 that moved approval authority for
these activities from the individual component heads to the Director of
Public and Congressional Affairs. A lack of travel funds for collateral
activities in the first half of the fiscal year also limited OIG*s staff
participation in discretionary events. According to this Director, because
she could not approve all of the requests, she considered the nature and
size of the audience, in addition to the cost of the trip, in deciding
whether approval would be granted.
A number of employees of OEI told us that they have been frustrated with
the cancelation of projects since the Inspector General took office.
According to these individuals, many projects were well under way at the
time of their termination. Although OEI managers could not tell us how
many projects have been canceled under the current Inspector General*s
tenure, they could tell us how many of the OEI projects begun in fiscal
years 2000, 2001, and 2002 were subsequently canceled. As table 7 shows,
27 reports, or about 26 percent of reports started in 2002, were canceled
by the end of February 2003. According to OEI management, although some
projects have been canceled, the work performed on these projects has been
used by OEI teams involved in related OEI projects. OEI Reports
Page 27 GAO- 03- 685 Review of HHS OIG Operations Table 7: Number and
Percentage of OEI Projects That Were Begun in Fiscal Years 2000, 2001, and
2002 and Canceled by February 28, 2003 Fiscal year 2000 Fiscal year 2001
Fiscal year 2002
Reports Started 103 80 103 Number Subsequently Canceled 18 14 27
Percent Subsequently Canceled 18 18 26
Source: GAO analysis of HHS OIG data.
We followed up on several projects that recently had been canceled to
better understand management*s rationale for doing so. Staff members
brought these projects to our attention during the course of our work. 29
In one instance, a project was canceled 7 months after the team had
conducted the exit conference with the agency. More than 4,000 staff hours
had been expended on this project, which included three full- time and one
part- time staff and a paid intern. The Deputy Inspector General
ultimately told the team that the report lacked sufficient evidence and
would not be presented to the Inspector General for signature. Although
the team subsequently prepared two memoranda as substitutes for the
report, no product was ever issued* despite interest from the provider
community and relevant agency.
We have learned that OEI projects continue to be canceled. For example, in
March 2003 the Inspector General took the unusual step of recalling a
draft report, which had been sent to the relevant agency for comment in
February 2003. Both the Deputy Inspector General for OEI and the
Inspector General approved this draft. Also in March 2003, a related
project, which had begun in fiscal year 2002, was canceled as the OEI team
prepared for an exit conference with the agency it had evaluated. OEI
management decided to combine the results of both projects into a single
report. Although the OEI staff involved with these projects contend that
they briefed management several times over the course of these
assignments, the Deputy Inspector General for OEI explained that he made
this decision once he realized there were inconsistencies between
the two projects that needed to be reconciled. As of late April 2003, no
report had been published.
29 We could not determine whether these examples were representative of
the average amount of staff time expended on canceled projects, as OEI
does not retain these data.
Page 28 GAO- 03- 685 Review of HHS OIG Operations In conversations with
the Inspector General and the Deputy for OEI, we learned that they had
been particularly concerned with the appropriateness of criteria used by
OEI staff in evaluations. They told us
that they were uncomfortable with the policy- oriented work that OEI had
done and were taking actions in the pipeline of OEI reports to address
what they viewed as shortcomings in the accuracy and sufficiency of
evidence in OEI products. The Deputy for OEI also explained that they
were providing training to all OEI staff on evidence standards with the
hope of improving the quality of future projects. OEI managers and staff
that we spoke to expressed surprise and frustration at these concerns and
pointed out that in the past, OEI had been recognized and praised by
Congress, the public, and the press for its high- quality evaluation work.
Based on our survey and extensive interviews, we found in the aggregate
that employee views about the organization, management, and their personal
job satisfaction remained positive and relatively unchanged between 2002
and 2003. However, we identified several groups of employees whose morale
was of concern, namely, employees working at headquarters, those at the
highest levels of management, and staff working
in two OIG components. Our analysis of open- ended survey comments also
revealed areas of dissatisfaction that were not fully captured by other
items on our survey. Our survey and interviews found, in the aggregate, a
high level of satisfaction among OIG employees. Overall, positive
responses to survey items in both 2002 and 2003 averaged over 80 percent
and no item responses changed more than 5 percentage points between the 2
years.
Positive responses were especially prevalent both years for statements
such as *All things considered, my component is a good place to work* (89
percent and 87 percent, respectively) and *I believe that my work is
important to the success of the component* (94 percent and 93 percent,
respectively). Similarly, our interviews revealed an overall high level of
job satisfaction, typified by comments such as *I believe my work makes a
difference.* Staff repeatedly cited their close relationships with their
immediate work groups and their involvement on important issues as reasons
for their job satisfaction. We also identified some examples of
improvement. For instance, in both the survey and interviews, OI
employees indicated there had been an increase in communication with upper
management in their component over the last year.
We found that positive responses to most survey items were lower for
headquarters employees than for field staff. For example, we found that
Measure of Employee Morale
Page 29 GAO- 03- 685 Review of HHS OIG Operations there was a marked
difference in positive responses* 10 percentage points* to the statement
that *Everyone is treated with respect.* We also
found a 14 percentage point difference in positive responses to the
statement, *I have confidence and trust in my organization.* This pattern
of more positive responses from the field was consistent with statements
made during our interviews. Whereas many headquarters staff expressed
concern about the Inspector General*s actions, most field employees told
us that they felt insulated from, and largely unaffected by, the personnel
and other changes that occurred in headquarters. In addition, our survey
indicated that senior management staff*
specifically members of the Senior Executive Service and GS- 15 employees*
were considerably more concerned than all other employees about OIG
leadership. While 88 percent of employees at the GS- 14 and lower levels
agreed with the statement, *As an organization, the OIG has clear goals,*
only 67 percent of the senior management staff* those at the GS- 15 level
and members of the Senior Executive Service* responded positively to that
statement. Further, about 70 percent of the employees at the GS- 14 level
and lower levels indicated that they had confidence and trust in the
organization. On the other hand, only 56 percent of senior managers agreed
with that statement. In our interviews, some senior management staff were
extremely clear about, and supportive of, the
Inspector General*s goals, but others expressed confusion about the
Inspector General*s priorities for their components. Many in senior
management were disquieted by the decisions that resulted in some of
their colleagues retiring, resigning, or being reassigned during 2002.
These managers explained that they were uncomfortable because they did not
fully understand the motivations behind the Inspector General*s actions.
Our survey revealed a substantial deterioration in OEI employees* views of
the organization, management, and their personal job satisfaction. For
example, a statement focusing on whether *upper management clearly
communicates the goals of my component,* elicited an almost 50 percentage
point drop in positive responses between January 2002 and February 2003
(compared to a 1 percentage point decrease in the aggregate). Similarly,
there was a 34 percentage point drop in positive responses to the
statement about being *fully informed about major issues affecting my job*
(compared to a 5 percentage point drop overall). Finally, about 62 percent
of OEI employees indicated a lack of trust and
confidence in their organization (compared to 30 percent overall). The
decline in the overall climate in OEI can be linked to a number of changes
that profoundly affected the staff in that component. OEI staff
Page 30 GAO- 03- 685 Review of HHS OIG Operations told us that they were
negatively affected by the abrupt departure of the Deputy Inspector
General, decreased communications from headquarters
management, changes and delays in the report review process, canceled
projects, and a narrowing of the scope of their work. In addition, OEI
staff explained that they have been disappointed by a decrease in the
number of their assignments that has resulted in what are considered to be
*highprofile*
products* those signed by the Inspector General, those issued as standard
blue- cover reports, and those placed on the OIG*s Web site. 30 Our
employee survey also identified a distinct decline in positive
responses to survey items among OCIG employees* almost all of whom work in
headquarters. Of particular concern were answers to survey statements
addressing the adequacy of communication and job satisfaction. For
example, compared with 2002 survey results, there was a 22 percentage
point drop in positive responses to the statement about
being kept fully informed about major job issues. OCIG employees also
reported a 16 percentage point drop in positive responses to the item *I
am satisfied with my job* and a 12 percentage point drop in their opinion
that
*everyone is treated with respect,* compared with last year*s survey. Our
results also showed that 54 percent of OCIG employees lack trust and
confidence in their organization. The decline in the views of OCIG staff
can, in part, be attributed to changes implemented by the Inspector
General, and the atmosphere of anxiety and distrust that her actions
created. OCIG employees expressed concern about the circumstances under
which the former Chief Counsel and other senior managers left the OIG. In
addition, we were told that the curtailment of education and outreach
activities and contact with congressional committee staff had an adverse
effect on OCIG employee morale.
Finally, we analyzed the written comments that some employees opted to
write in the comment box provided on our survey. In total, 578 of the
1,451 survey respondents (40 percent) elected to write comments, which
allowed them to express opinions about issues that were not covered in
detail in our other survey items. Our analysis of these comments showed
that the majority were negative in tone (75 percent). Overall, the most 30
OEI products can be signed by the Inspector General or a variety of
individuals within the
component. Products may also be issued as a standard blue- cover report, a
white- cover report, a memorandum, or, on rare occasions, an e- mail.
Reports signed by the Inspector General receive the widest distribution
and blue- cover reports are considered the most prominent. In contrast,
white- cover reports or memoranda signed by a regional OIG official are
considered to be of less importance and may receive only minimal
distribution.
Page 31 GAO- 03- 685 Review of HHS OIG Operations frequently mentioned
categories were: morale (82 percent negative), recent changes in
headquarters management (61 percent negative),
sufficiency of training or equipment (85 percent negative), and quality of
headquarters management (80 percent negative). The demographic
characteristics of those who wrote comments were generally similar to the
overall sample of respondents, although those planning to leave the OIG in
the next 5 years and OEI staff were more likely to provide comments than
other survey respondents. We met with officials from the OIG and the
Office of the HHS Secretary
and briefed them on our findings. We also provided them with a copy of our
draft report. In written comments on a draft of this report, the Inspector
General disagreed with some of our findings and characterizations of
certain events. The Office of the Secretary did not provide comments.
In reference to our discussion about the OIG*s productivity, the Inspector
General stated that the OIG had achieved substantial accomplishments under
her leadership and direction and cited the savings attributable to its
work in fiscal year 2002. In addition, she highlighted some of the OIG*s
nonmonetary achievements during her tenure. As we noted in our draft
report, many of the OIG*s productivity measures have remained steady or
improved, including those cited in the Inspector General*s letter.
However,
we also pointed out that making a conclusive determination regarding
productivity in the short term is extremely difficult because current
savings are often the result of efforts started in prior years. Our draft
also identified declines in other important areas, such as settlements and
recoveries.
In addressing our findings related to employee morale, the Inspector
General pointed out that our survey of OIG employees showed that employee
morale remained positive and relatively unchanged during her tenure.
However, our survey also identified several groups of employees whose
morale was of concern. For example, senior managers were considerably more
disturbed than all other employees about OIG leadership. Further,
headquarters employees expressed less satisfaction with the organization
and leadership than their counterparts in the field. While the majority of
OIG staff are located in field offices and generally
were more satisfied with their work environment than headquarters
employees, they also felt less affected by the changes instituted by the
Inspector General than their colleagues in headquarters. A striking
exception to field office employee satisfaction, as discussed in our
draft, Agency Comments
and Our Evaluation
Page 32 GAO- 03- 685 Review of HHS OIG Operations was staff in OEI, whose
dissatisfaction increased substantially compared to last year.
The Inspector General also took issue with our discussion of the
circumstances surrounding the delay in beginning the Florida pension
audit. We included this example of her decision- making in our draft
because we believe that it demonstrated a lack of awareness and
appreciation of the need for the Inspector General to closely safeguard
her independence. We believe it is imperative that an inspector general
perform due diligence when responding to external requests* particularly
where independence could be questioned. We continue to believe that the
Inspector General*s decision to intervene at the request of senior
officials in the Florida governor*s office and her subsequent instructions
to her staff to delay the audit created a perception that her independence
was compromised. The Inspector General did not address the issue of her
independence in her comments. Instead, she disagreed with our suggestion
that the OIG*s report could have been available prior to the November 2002
election, if the audit had begun 7 months earlier, in April 2002, as
initially planned. While we cannot be certain that the final report would
have been issued by the election, we believe that it is likely that the
findings would have been made public* particularly since the actual
findings of the audit were reported by the media in March 2003, 6 months
after the work commenced.
Regarding the York Hospital matter, the Inspector General stated that she
discussed her concerns about the proposed settlement with her staff and
that she believed that seeking a larger settlement was not fair or
justifiable. However, during the course of our work, the Inspector General
told us that she did not direct a settlement or involve herself in
negotiations with the hospital. In any case, we believe that the Inspector
General*s actions in response to a letter from several members of Congress
contributed to the perception that she was not independent. The
Inspector General stated in her comments that she discussed this matter
with her attorneys and determined the OIG*s case was weak. However, the
former Chief Counsel and other OCIG attorneys told us that when she
instructed them to *get rid of* the case, she did not address the specific
facts or sufficiency of the evidence collected in this matter. Further,
the former OIG Chief Counsel did not share the Inspector General*s belief
that this was a weak case, and told us that he believed the government
could have obtained a higher settlement, absent any pressure to close the
case quickly.
Page 33 GAO- 03- 685 Review of HHS OIG Operations Concerning the OIG*s
delayed report on the adjusted community rate proposals, the Inspector
General pointed out that the report was already
delayed 7 months by the time she took office. While we acknowledge this
fact, in our view, the already lengthy delay should have prompted her to
take more aggressive action to either obtain CMS*s comments or publish the
OIG*s report without them. Although the Inspector General stated that she
relied on the advice of her senior staff in delaying the issuance of this
report, our evidence indicates that some of her senior managers were very
concerned that she took little action to expedite CMS*s comments. The
Inspector General indicated that she spoke to the CMS administrator
regarding this matter, but she did not indicate when this discussion
occurred or how CMS responded. However, the Inspector General did not
indicate* nor did we find any evidence to suggest* that she took more
rigorous steps to obtain CMS*s comments, such as imposing a deadline for
the publication of the report, regardless of the status of the comments.
The Inspector General also stressed that the delay in publishing the OIG*s
report had nothing to do with her independence. However, the fact that CMS
strenuously objected to the OIG*s findings, and that CMS was allowed to
delay its comments for over a year, in our view, at least contributed to
the perception that the Inspector General was not independent. In
addition, the Inspector General disputed our statement that this report
was a time sensitive one of congressional interest. We disagree. During
the summer and fall of 2001, Medicare+ Choice legislative proposals were
developed in both the House and Senate. Also congressional hearings were
held on the status of the Medicare+ Choice progam, which included the
issue of adjusted community ratings.
Regarding our assessment of personnel changes in the OIG, the Inspector
General stated that her actions were appropriate and that the nature of
the Senior Executive Service encourages rotations among staff. While we do
not dispute the Inspector General*s authority to reassign staff to meet
office needs, the manner in which she made these changes clearly created
an atmosphere of anxiety in the OIG. The Inspector General stated that she
explained the rationale for her decisions *over and over again.* However,
our discussions with staff members revealed that they did not understand
why many of the changes had been made. Moreover, most of the eight senior
managers whose departures we found particularly troubling told us that the
Inspector General never explained to them why
she wanted them to leave their positions. The Inspector General also
commented that our employee survey suggested that there were no widespread
negative perceptions among staff concerning her personnel decisions. We
disagree with this observation because our survey did not contain a
question related to her personnel changes. Instead, our survey
Page 34 GAO- 03- 685 Review of HHS OIG Operations focused on employee
satisfaction within their immediate work groups* most of which are in the
field where the consequences of the Inspector
General*s changes were least felt. The Inspector General noted that most
of the individuals who left the OIG following her changes were in new
positions that were *at least equal to or better than* the ones they
occupied at the OIG and that she always promoted from within the
organization. We do not think that the current employment situations of
these former staff members are relevant to the Inspector General*s
personnel decisions, nor is her practice of promoting other employees from
within the organization.
In our draft report, we also discussed the OIG*s budgetary difficulties.
In her comments, the Inspector General described her efforts to respond to
this situation, which primarily consisted of directing one of her senior
managers* who was in an acting deputy position* to develop strategies for
resolving the OIG*s financial problems and to work with other senior OIG
managers to develop a spending plan. While we would fully expect that the
Inspector General would want to call on her management team to confront
the agency*s budgetary problems, our concern was that she personally
played only a minor role in resolving this matter, particularly in the
absence of a Principal Deputy. Given the Inspector General*s limited
personal involvement, the OIG*s senior management team lacked a leader
with sufficient authority to mediate any disagreements between them and to
take aggressive steps to identify appropriate solutions to the
organization*s fiscal challenges. Finally, the Inspector General*s
comments pointed out that OI had taken steps to correct the deficiencies
we noted in its credentialing system. We acknowledged that corrective
action has been initiated and this was reflected in our draft report.
We have reprinted the Inspector General*s letter in appendix III. We are
sending copies of this report to the Secretary of HHS, the HHS Acting
Principal Deputy Inspector General, the former Inspector General, and
other interested parties. We will also make copies available to others
upon request. In addition, this report will be available at no charge on
GAO*s Web site at http:// www. gao. gov. We will also make copies
available to others upon request.
Page 35 GAO- 03- 685 Review of HHS OIG Operations If you or your staffs
have any questions about this report, please call me at (202) 512- 7114.
Additional GAO contacts and other staff members who made key contributions
to this report are listed in appendix IV.
William J. Scanlon Director, Health Care Issues
Appendix I: Scope and Methodology Page 36 GAO- 03- 685 Review of HHS OIG
Operations To conduct our review, we focused on three key areas* the
leadership exhibited by the current Inspector General, Janet Rehnquist,
the productivity of the Office of Inspector General (OIG) in recent years,
and
employee morale. To do our work, we became familiar with the organization
and structure of the OIG and many of its policies and procedures related
to its budgeting, work planning, and report processing activities. We also
examined its personnel practices and controls over certain OIG operations.
As part of our efforts, we interviewed over 200
current and former OIG employees* including the Inspector General* and
conducted a Web- based survey of all employees to obtain their views about
their work environment. We also interviewed two current and one former
inspectors general from other federal agencies to better understand their
unique role and the principles they embraced to manage
their offices. Our review included the examination of more than 8,000
pages of documents, including material related to the OIG*s general
policies and procedures, human resource management, productivity measures,
and reporting standards. Many of these documents were given to us by OIG
managers and other employees. In addition, we requested* and were given
access to* the e- mail accounts of eight senior OIG managers. This enabled
us to retrieve selected messages that these individuals sent or received
for approximately a 6- month period on a wide variety of topics affecting
the management of the office. We also obtained documentation
from other organizations, including the President*s Council on Integrity
and Efficiency (PCIE), which recently issued a report on some of the
Inspector General*s actions. 1 To obtain the views of OIG employees, we
conducted a series of semistructured interviews. These interviews relied
on open- ended
questions regarding the Inspector General*s leadership, productivity,
morale, and other OIG operations. We interviewed three categories of
employees* those who were selected randomly, those who volunteered for
interviews, and those we selected because of their knowledge or position
within the OIG. 1 The PCIE*s review focused on allegations that the
Inspector General improperly possessed
a firearm and law enforcement credentials. Before these allegations were
brought to the attention of the PCIE, we planned to examine these matters.
However, once the PCIE commenced its investigation, we agreed with our
requestors to exclude these matters from the scope of our work and report
on the PCIE*s findings. Appendix I: Scope and Methodology Interviews with
Current
and Former Employees
Appendix I: Scope and Methodology Page 37 GAO- 03- 685 Review of HHS OIG
Operations The randomly selected staff were chosen for interviews from
five of the OIG*s eight regional offices as well as employees in OIG
headquarters. This provided us with a broad geographic representation of
OIG employees.
Our regional interviews were conducted in Atlanta, Boston, Chicago,
Dallas, and San Francisco. In order to afford confidentiality to
interviewees, we conducted our regional interviews in GAO offices in those
cities or in other non- OIG space. Some regional interviews were also
conducted by telephone. Headquarters staff were given the option of being
interviewed in either the OIG headquarters or GAO headquarters building.
At each of the five regional offices we visited, we interviewed
approximately 20 randomly selected employees who ranged from the GS- 7
through the GS- 15 levels. One hundred and six randomly selected regional
staff members were interviewed in total. Interviewees were selected using
a stratified, random sampling technique. Employees from the Office of
Audit Services (OAS), the Office of Investigations (OI), and the Office of
Evaluation and Inspections (OEI) were included in our random interviews at
each regional location. 2 We also interviewed 32 randomly selected staff
from the OIG*s headquarters in Washington, D. C. and in nearby field
offices, including those in Baltimore, Columbia, and Rockville, Maryland.
To supplement our random interviews and to enhance identification of
issues of concern to all OIG employees, regardless of their location, we
invited all employees, through an OIG officewide e- mail, to contact us if
they wished to participate in an interview. We received 28 requests for
interviews and conducted many of these by telephone. We generally used the
same set of questions that were posed during the random interviews.
In both the random interviews and in discussions with those employees who
requested to be interviewed, we asked individuals to bring to our
attention any topic that they felt was noteworthy but which our questions
did not address. Some interviewees provided us with supporting
documentation that they felt was relevant. In some instances, interviewees
were reluctant to provide us with documentary evidence and were also
concerned about confidentiality. In these situations, we attempted to
corroborate the information they shared with us through other means,
without jeopardizing their confidentiality.
2 The OIG does not employ members of the Senior Executive Service in its
regional locations. In addition, the Office of Management and Policy (OMP)
and the Office of Counsel to the Inspector General (OCIG) typically
maintain only a few staff members in regional offices.
Appendix I: Scope and Methodology Page 38 GAO- 03- 685 Review of HHS OIG
Operations As our work progressed, we identified a number of individuals
whom we believed would be able to supply us with important information in
areas
we had identified as potential areas of concern, including the
independence of the Inspector General, turnover among senior OIG
personnel, and changes in productivity and morale. In total, we
interviewed 44 such individuals, many of whom were current or former OIG
employees with first- hand knowledge about issues central to our
review. To determine the extent to which policies and procedures were in
place to ensure that all OIG employees maintained a high degree of
independence, we reviewed existing OIG policies, procedures, and
protocols. We also reviewed guidance issued to the Inspector General
community by the PCIE and the Government Auditing Standards pertaining to
independence.
We also discussed the OIG*s protocols for responding to requests for
information or assistance from external entities with selected current and
former senior- level OIG officials. In addition, we obtained information
regarding specific instances concerning the Inspector General*s
independence from interviews with current and former OIG officials as well
as the Inspector General.
To evaluate recent personnel changes among OIG officials, we examined
detailed personnel information for 24 current or former OIG employees who
had resigned, retired, been reassigned, or promoted during the Inspector
General*s tenure. 3 We reviewed the official personnel files for these
individuals and collected relevant information including their history of
government service; time employed by the OIG; and any awards, bonuses, and
letters of commendation that they had received. We also reviewed the
performance appraisals these individuals had received for the prior 3
years. Finally, we reviewed documentation specifically concerning the
promotion of an OIG staff member to the position of Director of Public and
Congressional Affairs. Among other things, we examined relevant position
descriptions, job announcements, and e- mail communications.
3 We requested the official personnel files of 25 individuals but 1 file
could not be located. We do not believe that this had a material effect on
our review. Evaluation of the Inspector
General*s Independence Review of Personnel Information
Appendix I: Scope and Methodology Page 39 GAO- 03- 685 Review of HHS OIG
Operations We also interviewed OIG officials regarding this and other
personnel decisions made during the Inspector General*s tenure. To
understand the purpose, frequency, and duration of the Inspector General*s
travel, we examined the itineraries, travel orders, and travel
vouchers for all of the trips she had taken from August 2001 through
November 2002. For trips for which the itineraries lacked sufficient
information about the Inspector General*s business activities, we
requested additional information and discussed these trips with the
Inspector General. We also identified all OIG employees that accompanied
her when she traveled. We obtained similar travel records for two senior
staff members who accompanied the Inspector General on several occasions
and discussed their roles during these trips with them.
To determine whether the OIG has experienced any changes in productivity
since the current Inspector General took office in August 2001, we
reviewed OIG publications, such as its semi- annual reports, to
determine how savings, recommendations, and other performance indicators
changed since fiscal year 2000. From OAS and OEI, we collected data about
the number of projects initiated, reports published, and reports canceled
in fiscal year 2002. We compared these data to the number of reports that
were initiated, published, and canceled from fiscal years 2000 and 2001*
before the current Inspector General*s tenure. To measure productivity in
OI and OCIG, we reviewed data on
investigations, prosecutions, and convictions, and exclusions from fiscal
year 1997 through fiscal year 2002. We also examined relevant monetary
accomplishments including the number and amounts of fines and penalties
assessed, civil settlements and judgments, cost savings claimed, and
recoveries and court- ordered restitutions. Our review included an
examination of OCIG files pertaining to eight civil monetary penalty
cases. We also judgmentally selected 18 corporate integrity agreements
instituted since fiscal year 2000, to determine the extent to which new
policies outlined in the Inspector General*s November 20, 2001, open
letter to
providers had been implemented. In addition, we discussed the OIG*s
productivity with some of its partners in the law enforcement community to
determine whether there have been recent changes in the level of OI*s or
OCIG*s support. Specifically, we spoke to officials from the Department of
Justice and seven of its U. S.
Attorneys* Offices. We also discussed this matter with officials from
Examination of the Inspector General*s Travel Analysis of OIG
Performance Measures
Appendix I: Scope and Methodology Page 40 GAO- 03- 685 Review of HHS OIG
Operations Medicaid Fraud Control Units in California, Florida, Illinois,
and New York and a representative from the National Association of
Medicaid Fraud Control Units. Finally, we assessed the OIG*s productivity
in terms of its outreach and
education activities. To do this, we collected information regarding the
number of speeches, presentations, and testimonies given by various OIG
employees. We also discussed this matter with OIG employees and
professional staff members at several congressional committees with
jurisdiction over Medicare and other federal health programs.
To elicit broad- based views of OIG employees on morale and other issues,
we conducted a Web- based survey. We solicited OIG employee participation
by e- mail, using an e- mail list provided by the OIG. We first sent a
notification e- mail alerting the employees to the upcoming survey and to
check for inaccurate e- mail addresses. We verified with the OIG that the
individuals whose e- mails were returned as *not deliverable* were no
longer active OIG employees. We then sent an activation e- mail to each
employee, containing a unique user name, password, and instructions for
accessing the survey on the GAO Web site. We sent three follow- up
reminder e- mails to nonrespondents. Employees were given 1 month to
complete the survey. Of the 1,621 employees on our list, 1,451 completed
the survey for a response rate of 90 percent.
The survey contained 29 items asking employees for their views on the
organization, management, and their personal job satisfaction. The four
possible responses were: strongly agree, somewhat agree, somewhat
disagree, and strongly disagree. The first 26 items on the survey were
identical to those from an employee survey conducted by the OIG in
January 2002, which we used as a basis for comparing our survey results.
We included three additional items: *Overall, the OIG is improving as a
place to work and make a difference,* *I have confidence and trust in my
organization,* and *In the last 15 months, morale in my work group has
improved.* We also included seven demographic items and provided an open-
ended comment box. We included a final item for the respondent to mark the
survey as *Completed,* which, if checked, indicated that the
respondent gave us permission to include his or her responses in our
analyses.
In total, 578 of the 1, 451 survey respondents (40 percent) elected to
write open- ended comments. We coded 573 of the comments for tone
(positive, negative, neutral) and content. To code content, we used 36
categories Analysis of Web- Based
Survey Results
Appendix I: Scope and Methodology Page 41 GAO- 03- 685 Review of HHS OIG
Operations related to morale, productivity, management, personnel issues,
independence, propriety, and other topics. The comments of three
respondents were not coded because they did not fit into any of our coding
categories. The comments of two additional respondents were not coded
because they did not mark their surveys as *Completed.* The unit of
analysis was the comment* not the respondent. For example, if one
respondent made several comments that fell into different categories, each
comment was coded separately.
Appendix II: Insufficient Internal Controls Over the OIG*s Credentialing
System Page 42 GAO- 03- 685 Review of HHS OIG Operations
In response to allegations that certain employees, including the Inspector
General, possessed improper credentials, we evaluated the security of the
OIG*s credentialing system. OIG employees are issued credentials that
display their photographs, signatures, job titles, and, in the case of OI
investigators, their status as law enforcement officers. Because adequate
internal controls are key to preventing mismanagement and operational
problems, our evaluation centered on the controls governing this computer-
based system, physically located in the OIG headquarters building. In
addition, recent advances in information technology have heightened the
importance of ensuring that controls over electronically
stored information are frequently reviewed and updated to minimize the
threat of improper use. Changes in information technology led to revisions
in Standards for Internal Controls in the Federal Government, 1 which
became effective at the beginning of fiscal year 2000, to reflect new
guidance for modern computer systems. Our work revealed serious weaknesses
in the internal controls governing the OIG*s credentialing system.
The physical security of the computer system used to produce credentials
was inadequate. The system was housed in a public file room with
unrestricted access. Because the room also contained a copier machine,
many individuals routinely entered the area. The system*s backup tapes
were located in an unlocked drawer in the credentialing system desk. In
addition, we also found the stock paper containing the agency*s insignia,
used in the production of all credentials, stored unlocked in a cabinet in
the same room.
In addition, we found deficiencies in the system itself, making it even
more vulnerable to misuse. For example, we found that neither the
computer*s screen saver nor the credentialing software programs on the
computer were password protected, and the employee photo and signature
files were not adequately protected. The system also did not have the
capability to create a history log or audit trail to identify past users.
Given the system*s unsecured location, we determined that the system
itself was easily susceptible to unauthorized access through the use of
several techniques, such as a device that could identify recent keystrokes
to capture the names of recent users and their passwords.
1 U. S. General Accounting Office, Standards for Internal Controls in the
Federal Government, (GAO/ AIMD- 00- 21. 3. 1, November 1999). Appendix II:
Insufficient Internal Controls
Over the OIG*s Credentialing System
Appendix II: Insufficient Internal Controls Over the OIG*s Credentialing
System Page 43 GAO- 03- 685 Review of HHS OIG Operations When we visited
the credentialing room we found it empty, the computer on, and the
screensaver active. By touching the computer*s mouse we
were able to cancel the screensaver and observed an open record on
display. We found that we could access, copy, modify, and delete sensitive
files including employee photos, digital signatures, and personnel
information with little likelihood of detection or system recovery. It
would also have been possible to create a false, unauthorized set of
credentials. OIG officials have since told us that they have taken steps
to correct these weaknesses.
Appendix III: Comments from the Inspector General Page 44 GAO- 03- 685
Review of HHS OIG Operations Appendix III: Comments from the Inspector
General
Appendix III: Comments from the Inspector General Page 45 GAO- 03- 685
Review of HHS OIG Operations
Appendix III: Comments from the Inspector General Page 46 GAO- 03- 685
Review of HHS OIG Operations
Appendix III: Comments from the Inspector General Page 47 GAO- 03- 685
Review of HHS OIG Operations
Appendix III: Comments from the Inspector General Page 48 GAO- 03- 685
Review of HHS OIG Operations
Appendix III: Comments from the Inspector General Page 49 GAO- 03- 685
Review of HHS OIG Operations
Appendix IV: GAO Contacts and Staff Acknowledgments Page 50 GAO- 03- 685
Review of HHS OIG Operations Leslie G. Aronovitz, (312) 220- 7600
Geraldine Redican- Bigott, (312) 220- 7678 Major contributors to this
report were Enchelle D. Bolden, Helen Desaulniers, Curtis Groves, Shirin
Hormozi, Behn Kelly, Terry Richardson, Christi Turner, and Anne Welch.
Appendix IV: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments (290242)
The General Accounting Office, the audit, evaluation and investigative arm
of Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO*s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability. The fastest and easiest way to obtain copies
of GAO documents at no cost is through the Internet. GAO*s Web site (www.
gao. gov) contains abstracts and fulltext
files of current reports and testimony and an expanding archive of older
products. The Web site features a search engine to help you locate
documents using key words and phrases. You can print these documents in
their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail this list to you every afternoon, go to www. gao. gov
and select *Subscribe to daily E- mail alert for newly released products*
under the GAO Reports heading. The first copy of each printed report is
free. Additional copies are $2 each. A check or money order should be made
out to the Superintendent of Documents.
GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed
to a single address are discounted 25 percent. Orders should be sent to:
U. S. General Accounting Office 441 G Street NW, Room LM Washington, D. C.
20548 To order by Phone: Voice: (202) 512- 6000 TDD: (202) 512- 2537
Fax: (202) 512- 6061 Contact: Web site: www. gao. gov/ fraudnet/ fraudnet.
htm E- mail: fraudnet@ gao. gov Automated answering system: (800) 424-
5454 or (202) 512- 7470
Jeff Nelligan, Managing Director, NelliganJ@ gao. gov (202) 512- 4800 U.
S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D. C.
20548 GAO*s Mission
Obtaining Copies of GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs Public Affairs
*** End of document. ***