At the federal level, the Secretary of HHS has delegated to the OIG the authority under sections 1128 and 1156 of the Social Security Act to exclude health care providers from most federal health care programs.The OIG, through its Office of Investigations, is required to exclude, nationwide, providers who have been convicted of Medicare- or Medicaid-related fraud and patient abuse or neglect, and felonies related to health care fraud and controlled substances. We also observed apparent inconsistencies in the way field offices are processing permissive cases. OIG Not Notified of Certain Withdrawals From State Medicaid Programs

During our state visits we found that states were not always notifying the OIG of certain providers effectively excluded from the respective state’s Medicaid program. This official speculated that had Illinois not aggressively moved to remove these providers from the Medicaid program through voluntary withdrawals, the providers would still be in the program. These providers, once sanctioned, can change employers or move to other states and potentially continue to provide services through federal health care programs without detection. In our visits to OIG field offices, we found that they were not always able to fully account for the number of referrals they received from the states. Nevertheless, we believe that more attention must be paid to a system that works to protect beneficiaries from substandard care and helps ensure the integrity of federal health programs. For example, the OIG could provide more guidance for OIG field staff and the states to facilitate the prompt preparation of case files—including required documentation—for OIG decisions. Furthermore, it could explore ways to ensure that states quickly identify and act to remove OIG-excluded providers from Medicaid participation.
Why GAO Did This Study

GAO discussed whether the Department of Health and Human Services' (HHS) Office of Inspector General's (OIG) process for removing fraudulent health care providers from all federal health programs.

What GAO Found

GAO noted that: (1) weaknesses within HHS OIG allow sanctioned health care providers to remain in federal health care programs; (2) these weaknesses include lengthy delays in the OIG decision-making process, inconsistencies among OIG field offices, states not informing OIG of the providers withdrawing from state Medicaid programs, and states using information from OIG to remove excluded providers from state programs; (3) these problems compromise the financial integrity of the Medicaid program; (4) OIG field offices are unable to account for the number of referrals they receive from OIG state offices; (5) health care providers deemed unfit in one state continue to participate in Medicaid programs in other states; (6) OIG needs to consider whether it is capable of protecting beneficiaries from substandard care and ensuring the integrity of the federal health care system; and (7) OIG could become more efficient in detecting fraudulent health care providers by providing more guidance for OIG field staff, timely preparing individual case files, clarifying guidance for OIG field offices, ensuring that states act quickly in removing OIG-excluded providers from Medicaid participation, and requiring states to report providers' voluntary withdrawal from Medicaid programs to OIG field offices.