OIG Mission - Illinois · 12/04/2018 · FY18 Successes 4 MPIS - Risk Analyses 7 Section 1 Administration Fiscal Management, MRA and FAE 9 Section 2 Bureau of Fraud Science Technology

HFS-OIG Annual Report FY18 i

OIG Mission

To prevent, detect,

and eliminate

fraud, waste, abuse,

mismanagement,

and misconduct in the

Illinois Medicaid System.

OFFICE OF INSPECTOR GENERALIllinois Department of Healthcare and Family Services

I am pleased to submit the Inspector General’s annual report forthe Fiscal Year 2018 (FY18) to Governor Bruce Rauner, theLegislature, and the citizens of Illinois.

The Office of Inspector General (OIG) continues to make greatstrides in preventing, detecting and eliminating fraud, waste,abuse, misconduct and mismanagement within the IllinoisMedical Assistance Program. Through innovative approachesand application of solid management and leadership principles,the OIG is revolutionizing how our state government meets theneeds of the public it serves while maintaining Program Integrityto ensure that tax payer dollars are not fraudulently wasted.

The OIG realized $191.1 million in cost savings for the taxpayers of Illinois, resulting in a return on investment (ROI) of$8.50 for every $1 spent. For FY18, a strong focus of the OIG

was Long Term Care – Asset Discovery Investigations (LTC-ADI) investigations and theprogram integrity aspects of managed care.

The OIG has experienced success despite the lack of available resources. The ROI statisticabove is absolute proof that the efforts of OIG are maximizing value to the taxpayers ofIllinois, further justifying the need for OIG expansion. Through the Governor’s RapidResults initiative, the OIG has been able to streamline internal processes to work smarter, notharder. While the OIG ended FY18 with 157 on-board staff, the OIG has reached thepinnacle of ROI which that level of staffing can produce. As additional duties continue tomount, current staff must be diverted to achieve daily operational goals. This situationprevents the OIG from enhancing our current capabilities and being proactive with topics andtrends in modern health care.

The OIG is continuing to identify ways to boost efficiency and cost savings for taxpayers,including developing a triage process for referrals, working collectively with the Bureau ofManaged Care (BMC) on contract compliance and encounter data issues, and collaborationwith law enforcement and managed care special investigations units.

HFS-OIG Annual Report FY18 ii

Bradley K. HartInspector General

The OIG is charged with program integrity for the Illinois Medicaid program. This includesrecommending changes to Medicaid policy, rules, and contract language. In this report, youwill find examples of how the OIG has made great strides in collaborating with theDepartment in identifying policy changes to safeguard taxpayer funds, as well as makingproactive recommendations to further enhance the department’s program integrity functions.For example, in FY18, the Department had no language allowing the Department to share inprogram integrity recoveries from the managed care providers. The OIG is collaboratingwith the Department to implement program integrity language into our managed careorganization (MCO) contracts to comply with 42 CFR Part 438 and will allow theDepartment to share in financial recoveries, audit MCOs/providers, and to monitor MCOplan compliance. The OIG is also developing several risk-based reports, which will highlightseveral issues of concern for the Department, due to be released in Fiscal Year 2019 (FY19).Topics include provider enrollment, narcotic/opioid prescribing and other areas of concern tothe OIG.

The OIG’s staff is dedicated to safeguarding the fiscal integrity of the Medicaid program, aswell as ensuring the safety and well-being of recipients. In FY19, the OIG will continue toachieve positive, demonstrable results in preventing, detecting and eliminating fraud, waste,abuse, misconduct and mismanagement in programs within the Illinois Medical AssistanceProgram.

Respectfully,

Bradley K. HartInspector General

HFS-OIG Annual Report FY18 iii

ContentsOIG Mission iMessage from the Inspector General iiReinforcing OIG Infrastructure 2FY18 Financial Highlights 3FY18 Successes 4 MPIS - Risk Analyses 7Section 1 Administration Fiscal Management, MRA and FAE 9Section 2 Bureau of Fraud Science Technology (BFST) TMU, RAU/PAU, FST 21Section 3 Bureau of Internal Affairs (BIA) 29

Section 4 Bureau of Investigations (BOI) SNAP, WARP, BOI 33

Section 5 Bureau of Medicaid Integrity (BMI) Peer, Audit, LTC- ADI, QC 39

Section 6 Office of Counsel to the Inspector General (OCIG) 53Acronyms 57Mandate 59Appendix 60

HFS-OIG Annual Report FY18 2

Reinforcing OIG Infrastructure

Education and TrainingThe Office of Inspector General interacts nationally witha variety of groups and organizations to share expertiseand knowledge in the field of fraud, waste and abuseprevention, as well as presenting and discussing currentfraud schemes that are not limited to the state of Illinois.OIG staff also attends educational trainings at theNational Advocacy Centers Medicaid Integrity Institute(NAC/MII) in Columbia, SC. These seminars andtrainings are free to OIG staff and are presented throughcollaborative efforts of Federal Centers for Medicare andMedicaid Services (CMS) and the US Department ofJustice (DOJ). OIG as a whole is also a participatingmember of: Healthcare Fraud Prevention Partnership(HFPP), National Health Care Anti-Fraud Association,(NHCAA). Inspector General Hart is the Treasurer of theNational Association for Medicaid Program Integrity(NAMPI).

Inspector General Bradley K HartPresentations FY18August 2017, NAMPI (Speaker and Treasurer)March 26-29, 2018 Emerging Trends in Medicaid, Beneficiary Fraud (Speaker)April 9-12, 2018 MFCU and PI Director’s Symposium (Speaker)April 12, 2018 HFPP Columbia, SCApril 17-19, 2018 CMS Baltimore, MDMay 18, 2018 Southern Illinois Health Policy Institute (Speaker)May 29, 2018 MCO/OIG/MFCU Training (Speaker)

OIG Staff trainings at the NAC/MII FY18Specialized Skills and Techniques in Medicaid Fraud DetectionsProgram Integrity Partnership in Managed Care SymposiumEmerging Trends in MedicaidMedical Record AuditingMedicaid Provider Enrollment SeminarEmerging Trends in Medicaid-OpioidsHCPro’S Certified Coder Boot CampData Experts SymposiumHealthcare Fraud Prevention Partnership MeetingBasic Skills and Techniques in Medicaid Fraud Detections

Collaboration and training withexternal organizations and partnersMCO/OIG/MFCU Training May 2018IMPACT Training for OIG and MFCU June 2018


FY18 Financial Highlights

Dollars RecoveredProvider Audits: $13,542,710Global Settlements: $6,450,932Restitution: $124,562TOTAL: $20,118,204

Overpayments identifiedand questioned payments

$23.6 MillionSettlements and Restitution

$6.6 Million

Funds Put to Better Use$147.4 Million

Audits$13.5 Million

Total Dollars questionedand Put to better use

$171 Million

Total Dollars recovered $20.1 Million

$191.1 Million Cost Savings ROI for the taxpayers of Illinois = $8.50 for every $1 spent

Questioned CostsProviders: $13,599,077Recipients: $ 9,590,991Restitution: $419,323TOTAL: $23,609,391

Funds Put to Better UseLTC ADI: $140,730,671Client Program Overpayments: $940,229Provider Sanctions: $1,515,719Recipient Restriction Program: $2,209,495SNAP: $2,024,876TOTAL: $147,420,991

How results are measured - An investigation, audit or review that is performed, managed or coordinated by the OIG can result in: Dollarsrecovered: Dollars recovered are overpayments that have been collected based on the results of an investigation, audit, inspection, or review;Questionable costs (formerly listed as overpayments): Questioned costs include overpayments identified for recover during an OIG investigation,audit or review due to: an alleged violation of a statute, law, regulation, rule, policy, or other authority governing the expenditure of funds or fortheir intended purpose or were unnecessary, unreasonably spent, or wasteful; Funds put to better use (formerly listed as dollars identified as costavoidance): Putting funds to better use results in: avoidance of unnecessary expenditure of funds for operational, medical, contract, or grant costs.These measures align with those used by the federal Government Accountability Office.


FY18 Successes

1 Calculation based on actual number of scripts written during that timeframe, versus what the new regulations and limitations would have allowed had they been in place during that time frame.

Litigation Activity - Office of Counsel tothe Inspector General (OCIG) secured$725K settlement with hospice providerOCIG filed a Termination and Recoupment Noticeagainst Harbor Light Hospice alleging variousMedicaid recipient patients were improperlyclassified as eligible for hospice care. HFS’sconsultant determined that these patients met thecriteria for hospice care for approximately 52% ofthe days in which the audit firm had determined thatthe patients did not qualify. Although the hospiceprovider initially made an offer of $550,000 tosettle the case, this initial offer was rejected. Theprovider’s subsequent offer of $725,000 wasaccepted in exchange for the Department’sagreement to withdraw its request for termination.

Fraud Detection Operations: TopicalCreams/Ointment schemes andchange in Department PolicyWorking in conjunction with a fraud referralreceived from an MCO, the OIG Provider AnalysisUnit (PAU) nurses investigated allegations of casesinvolving schemes of dispensing large quantities ofvery expensive ointments and compounding thoseointments, it was determined that the Departmentneeded to take action to prevent any further wasteand abuse of the program. PAU nurse analystsworked with HFS’ pharmacy unit, which was alsofinding similar schemes and issues surroundingthese medications. As a result, the HFS pharmacyunit implemented changes on several specificmedications, including quantity restrictions andnegotiating a lower price for one of the medicationsfrom $6 per gram to $2.20 per gram. It is estimatedthat this change in policy would have provided costsavings of approximately $1.1 million for the timeperiod of July 2017 through December 2017. 1

FY18 OIG Case HighlightsProvider enrollment and revalidationapplications reviewed: 329

Provider Investigations completed: 824

OIG referrals to MFCU: 31

Global Settlement Agreements executed: 14

Medicaid providers terminated, denied,suspended, and excluded: 114

Audits completed: 1,170

Fraud Detection Operations: Over$664K in Assets discovered duringAsset Discovery InvestigationsDuring the course of performing a review of anapplication for long-term care benefits, an Analystdetermined that an applicant’s parents created anirrevocable trust containing farm ground and hadnamed the applicant as the beneficiary. Years later,the applicant sold the farm ground and used theproceeds to purchase financial CD’s in their ownname. The Analyst deemed $664,709 as availablefunds for the applicant to use for their own nursinghome care. This was appealed and the Bureau ofAdministrative Hearings upheld the Department’sdecision.

Fraud Detection Operations:Pharmacy – Federal Healthcare FraudGuilty PleaPAU nurse analysts investigated allegations of falsebillings totaling over $100,000 in Medicaid dollarsby a Southern Illinois Pharmacy. Working inconjunction with ISP-MFCU, this case wasreviewed, referred, investigated, and finalizedwithin 12 months, resulting in the pharmacistpleading guilty to two counts of federal healthcarefraud.


FY18 Successes

2 The total monies held include monies being held within HFS as well as sister agencies under the jurisdiction of the OIG.

Bad Debt Recovery: $34K Recoveryfrom out- of- state doctorThe Department filed a Notice of Termination andAction to Recover against a former Medicaidprovider, Dr. Lorrie Richardson-O’Neal, who left theState of Illinois and relocated her medical practice toa small town outside of Atlanta, Georgia. HFS-OIGalleged that the physician improperly refused tosatisfy her financial obligations after the HFSDirector had previously issued a 2012 FinalAdministrative Decision in an ordinary 2008 HFSAudit recoupment and compliance case. The evidenceshowed that numerous attempts were made byemployees in OIG Fiscal Management, as well ascounsel, to recover the full amount of the HFS debt,$34,343, that was due. The Notice further alleged thatthe provider improperly ignored, failed to respond, orotherwise refused to comply with reasonable requestsfor payment. The provider later stated she did nothave the funds to satisfy her obligation. Afterrepeated communication between the OIG and theprovider, she ultimately settled her debt in full toavoid termination from the Medicaid Program.

Administrative Audits: Recoupment ofover $21K for billing deceasedrecipients schemeThe OIG continued initiatives focused on areas ofidentified Program vulnerabilities, includingpreventing payments and recovering overpaymentsmade for deceased recipients. In FY18, the OIGperformed 42 audits to identify and recoveroverpayments made by the Department for deceasedMedicaid recipients.

Payment Suspensions: OIGwithholding over $7 million dollars inprovider paymentsThe OIG utilizes its statutory authority to imposepayment suspensions when credible allegations offraud are identified. Cases can be under criminal,civil or administrative investigation. In FY18, the

OIG imposed several payment suspensions onMedicaid providers, with one suspension aloneresulting in over $3.3 million dollars being held.2

Fraud Investigation: Referred forprosecutionAn Investigation was completed for a clienteligibility case that alleged a client receivedassistance benefits for absent children, three ofwhich could not be located by BOI. During thecourse of the investigation, BOI found that medicalbenefits had been issued, but never used, for thethree absent children since birth. After being unableto make contact with the client after multipleattempts, an overpayment was established. For theperiod of January 2007 until August 2017, theestimated SNAP benefits overpayment totaled$54,826, grant benefits overpayment totaled $6,721,and Medical benefits overpayment totaled $8,151.BOI requested that the overpayment be calculatedby BOC and placed on hold, as it will be presentedfor prosecution.

Fraud Investigation: $900K in

overpayments identifiedAn Investigation was completed for a clienteligibility case that alleged the client receivedassistance benefits in Illinois while using theidentity of another individual. The investigationrevealed the client was using the identity of aWisconsin resident and that they used a secondSocial Security Number (SSN) for other fraudulentactivities. The client was found to be a non-citizenwithout a social security number who receivedSNAP benefits of $12,081 during the period ofDecember 2011 through March 2017. Additionallyit was found that the client received Medicaidbenefits of $899,971, for services, including a hearttransplant, while using the identity of the Wisconsinresident.


The OIG has identified multiple areas for programintegrity concerns and is proactively addressingthem, both internally and externally, among ourfraud, waste and abuse counterparts. New forFY18, the Medicaid Program Integrity Spotlight(MPIS) section highlights risk areas and issueswhich the OIG has identified as vulnerabilities forMedicaid program integrity. By highlighting areasof concern, the OIG is focused on finding creative,collaborative and effective solutions for programintegrity issues in hopes of being a role model forIllinois’ Medicaid program and program integrityunits around the nation.

Collections: Out of StateVendors/IndividualsWhen a provider moves out of state, the OIG’sresources for collection of any outstanding debts arelimited to contacting the provider via US mail ande-mail. The Bad Debt Unit generally receives littlecommunication from these providers. In the case ofLorrie Richardson-O’Neal, the threat of terminationfrom Medicaid/Medicare participation was aneffective strategy to assist in debt recovery becauseshe is a licensed physician. Threats of terminationlike this, however, have no bearing on providers orunlicensed individuals, such as medicaltransportation providers. These types of unlicensedproviders can abandon their debt in Illinois bysimply relocating out of state and/or seekingemployment in other fields. These providers mayown property or other viable assets, but the OIGCollections Unit cannot pursue these cases becausethe individual no longer resides within Illinois’ legaljurisdiction.

The OIG Collections Unit and Bad Debt currentlyhave no mechanism in place to perform offsets onManaged Care Organization (MCO) providers thatowe a debt to the department. Bad Debt’s soleoption for repayment is by check, which requiresproviders to voluntarily refund the overpayment in a

timely manner. This makes management of therepayment process extremely challenging.

Collections: Federal Tax RefundsThe OIG’s Bad Debt Unit does not have the abilityor authority to intercept Federal tax refunds. Statetax refunds can be withheld as a result of a C-33being entered with the Illinois Office of theComptroller. HFS-Child Support has the authorityto intercept Federal tax refunds. The OIG isinvestigating the manner and means to which theState could proceed with intercepting Federal taxrefunds, but obtaining the authority would likelyrequire a legislative change.

Managed Care: ProgramIntegrity ConcernsThe OIG is working collaboratively with Healthcareand Family Services (HFS) Bureau of ManagedCare (BMC) to address concerns regardingencounter data quality and contract compliance withthe MCOs. The OIG is encountering difficulties,given the lack of program integrity language in thepresent contract and is working diligently toestablish stronger contract language to assist in thefighting of fraud, waste and abuse in the Medicaidmanaged care system. The OIG is also workingcollaboratively with the department regarding anyother areas of concern related to managed care.

The OIG, in conjunction with our law enforcementcounterparts, has completely revised the Fraud,Waste and Abuse section of the HealthChoiceIllinois contract for FY19. The OIG is movingforward to clarify its role, as well as ProgramIntegrity in general, over MCOs, while workingcollaboratively with the department and themanaged care plans on identifying ways to fightfraud, waste and abuse to save taxpayer dollars.

Medicaid Program Integrity SpotlightRisk Analyses


Medicaid Program Integrity SpotlightNarcotic WithdrawalAgents and PrescribingPatternsThe OIG has identified concerning trends in theprescribing of narcotic withdrawal agents. Throughinvestigations and reviews, OIG staff has identifiedcash for script schemes, non-medical necessity forthe prescribing of narcotic withdrawal agents aswell as anomalies with treatment patterns andquality of care concerns.

Chart 1 - Medicaid Payments:Narcotic WithdrawalAgents in millions

Chart 2 - MedicaidRecipientsReceiving NarcoticWithdrawal Agents in thousands

Narcotic withdrawal prescribing trends identifiedfrom 2015 through 2017:• Recipient use from 2015 to 2017 quadrupled• Prescribing providers doubled• Prescription payments skyrocketedChart 1 shows the costs associated between FFS andMCO. These numbers represent Medicaidexpenditures only – not Medicare or privatepay/commercial costs. Chart 2 below is a visualdepiction from the Medicaid claims processingsystem, showing the number of individualsreceiving narcotic withdrawal agents.


Medicaid Program Integrity Spotlight

HCBS (Home CommunityBased Services) WaiverProgram: Program IntegrityConcernsNationwide, personal care service programs areknown for fraud, waste, and abuse. This providertype is notorious for fraud schemes such as: servicesnot-rendered, collusion with the recipient, checksplitting, and sexual/physical abuse. The risks toProgram Integrity are fiscal, administrative, andlegal. This risk has been highlighted by FederalHHS-OIG in prior program reviews as well as aWhite paper entitled “Vulnerabilities and MitigationStrategies in Medicaid Personal Care Services”published in 2017.1 A 2016 HHS-OIG investigativeadvisory report entitled “Patient Harm InvolvingPersonal Care Services (PCS)” recommended thatCMS take regulatory action to establish safeguardsto prevent fraudulent or abusive providers fromenrolling or remaining as PCS attendants, to protectthe PCS program from the risk of fraud, patientharm, and neglect.2 Per this report, HHS-OIGinvestigations have also shown that abuse andneglect by PCS attendants has resulted in deaths,hospitalizations, and less severe degrees of patientharm. Stronger controls are needed to screen andmonitor PCS attendants and the program, as wellas to ensure that only screened and qualifiedproviders oversee or provide care to recipients.3

1 https://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-Prevention/FraudAbuseforProfs/Downloads/vulnerabilities-mitigation-strategies.pdf

2 https://oig.hhs.gov/reports-and-publications/portfolio/ia-mpcs2016.pdf and https://www.medicaid.gov/affordable-care-act/downloads/program-integrity/mpec-7242018.pdf

3 Reference article: External Intelligence Note from the FBI Chicago Field Office dated 8/31/18 entitled “Purportedly Homebound Patients Employed as Personal Care Assistants Are Almost Certainly a New Indicator of Home Health Fraud, Resulting in Significant Losses for the Medicare Program.”

Given the present enrollment process, the OIG doesnot receive the applications for review of anyPersonal Assistant (PA) until after the provider hasstarted providing services and has potentially beenpaid. If the screening and approval/denial ofapplications were done initially, before the IP wasallowed to provide services, the process would bemuch more efficient and cost effective fortaxpayers. More importantly, it would preventproviders who otherwise do not meet therequirements of becoming a Medicaid providerfrom becoming a full Medicaid provider, thereforerequiring a lengthy legal administrative process toterminate them from the program. The OIG hasproposed multiple solutions to the problem,including making this provider type high riskproviders, requiring fingerprint-based backgroundchecks. The OIG continues to work collaborativelywith DHS to guarantee access to care for those thatneed services to remain in the community, whilepreventing the abuse of the system throughfraudulent means.

The risks toProgram Integrityare fiscal,administrative,and legal.

The OIG is seeking to address these new issueswithin the Medicaid population through policysuggestions, data analytics and clinical analyses.The OIG is also working collaboratively with thefederal government and other partners to identifyand address these concerns.


Administration

Section

1


AdministrationFiscal Management, MRA and FAEThe Administration Section works to buildinfrastructure for the OIG, which supports enhancedefficiency and effectiveness for investigations, auditsand reviews; acts as a liaison with our fraud,waste and abuse partners by providing increasedcommunication, information exchange andinvestigative support.

Administration staff supports the OIG with policyand procedure development, staff training andcoordination of strategic planning. TheAdministration Section is made up of multiple units:Fiscal Management, Personnel and Labor Relations,the Fraud Abuse Executive (FAE) and theManagement, Research and Analysis Section (MRA).

A newly implemented policyin FY18 allows OIG to chargeinterest. In FY18, theamount of interest identifiedfor receivables totaled$9,347. The total amount ofinterest collected in FY18totaled $7,130.

HighlightsCollections:Open Receivables: $58,000,000New Receivables Established: $14,000,000Collected: $13,600,000

Fiscal ManagementThe duties of HFS-OIG’s Fiscal Management Unitinclude overseeing all fiscal matters, includinggeneral collections, bad debt recovery, procurement,and budget responsibilities. Since the OIG budget isprojected annually, Fiscal Management staffmonitors the expenditures and requests additionalfunds as needed for special projects and initiatives.In FY18, this unit struggled as duties had to beabsorbed by existing staff due to retirements andvacancies.

HFS-OIG’s Fiscal Management Unit is made up ofGeneral Collections and Bad Debt Recovery.General Collections tracks overpayments identifiedas a result of OIG audits on Medicaid providers andcourt ordered restitution. This process involvesestablishing accounts receivable and monitoring ofaccounts until the debt is collected.1 If the debts arenot collectable, they are forwarded to Bad DebtRecovery. In FY18, General Collections monitored,on average, $58,000,000 in open receivables,established $14,000,000 in new receivables, andcollected $13,600,000.

One successful highlight for General Collections forFY18 is the implementation of interest charges for

providers who choose the installment paymentoption after the finalization of a BMI Audit case.While installment payment options are not a newprocedure, the charging of interest is a process thatwas newly implemented in FY18. Additionally, theOIG is requiring that payments be made by check.This action is a result of providers being paiddirectly through MCOs, not the Department. InFY18, the amount of interest identified forreceivables totaled $9,347. The total interestcollected in FY18 totaled $7,130.

Fiscal Management is also responsible for procuringand monitoring of all contracts, inter-agencyagreements, and vouchering for the OIG. The OIGsecures procurement and continually monitorsapproximately 50 contracts and 13 inter-agencyagreements per year. The OIG contracts withexternal entities to provide consultation services ina variety of capacities, such as medical consultants,CPA firms, and court-reporting services.

1 The federal government receives their FFP portion at the time the receivable is recorded in the Department’s accounting system.

Bad Debt Recovery UnitThe Bad Debt Recovery Program pursuesdelinquent accounts of HFS providers when generalcollection efforts have been unsuccessful. Theseproviders owe the Department monies as a result ofactions taken against them related to programintegrity activities.

When a case is received, it is reviewed for providerstatus. If the provider is found to be activelyenrolled, the Office of Counsel to the InspectorGeneral (OCIG) will place future payments on holduntil the outstanding debt is addressed.

All Bad Debt cases are monitored in the CASEtracking system. A C-33 Involuntary WithholdingRequest is completed with the Illinois Office of theComptroller (IOC). The C-33 request allows theIOC to intercept any other state monies that maybecome payable to that provider and redirect themonies to the OIG. Any monies redirected to OIGwill be applied to the provider’s delinquent account.

Providers are referred to a collection agency ifapplicable. The collection agency attempts tocollect the debt through all means available underIllinois law. If, after 90 days, collection efforts areunsuccessful, the collection agency efforts cease.An investigation to determine the provider’savailable financial status is initiated. Theseinvestigations require deep research into a variety ofstate and federal proprietary databases, which canuncover property ownership and assets,employment, and bankruptcies, as well as relevanttax information.

Referrals to the AttorneyGeneral for CollectionActionIf property ownership and/or employment areestablished, a collection action is requested throughthe Illinois Attorney General’s Office. The AttorneyGeneral’s efforts may include wage garnishment,


Administrationif wages are sufficient to justify deduction2 and lienson personal property. A Collection ActionReferral is prepared in accordance with theguidelines set forth by the Attorney General’sOffice. These referrals include all investigative andhistorical documentation that has been discoveredduring the entire investigation process. This caninclude provider enrollment documents, allcommunication between the Department and theprovider, and any legal documents obtainedduring any administrative hearing.

If the Attorney General’s Office is successful inobtaining funds from the provider and/or owner,these funds are collected by the Attorney General’sOffice and routed to the OIG and applied tothe debt.

Bad Debt RecoveryHighlights FY18An OIG audit was conducted on a physician in1996, resulting in a Notice of Intent to Terminateand Recover in 1997. In 2000, a FinalAdministrative Decision terminating the providerand entitling the Department to recover $957,148was entered. The provider did not appeal theDirector’s final decision. Attempts to contact theprovider for debt collection were unsuccessful andthe case was referred to the Attorney General’sWelfare Litigation Bureau for assistance. Between2000 and 2009 the case was in court. The end resultwas an Appellate Court issuing a favorable decisionupholding a Circuit Court ruling that theDepartment is entitled to recover $957,148.3 Afterextensive research, it was discovered that theprovider was working in Indiana providing servicesto Medicaid and Medicare clients and ownedproperty in Illinois. In 2016, the Attorney General’sRevenue Litigation Bureau filed a Citation todiscover assets, but the Citation was dismissed dueto the inability to obtain service after three attempts.In August 2017, a third party Citation was filed toobtain more information including data concerning

2 735 ILCS 5/12-801 et seq.

3 The OIG revamped internal collection efforts between 2011 and 2014 to create the current process.


Administrationthe provider’s bank account. On October 17, 2017,OIG General Collections received a check in theamount of $269,711 as a result of the Citation.

An audit for a transportation provider wasconducted in 2005 and finalized in 2007. Theprovider entered into a Settlement Agreement withthe Department and signed an Installment Note torepay $13,655. By 2008, the provider’s paymentswere delinquent and requests for payment by OIGproved ineffective. In 2010, the case was referred tothe Attorney General’s Welfare Litigation Bureaufor assistance in collecting the remaining balance of$10,108. In 2016, the OIG discovered propertyownership which resulted in the case being referredto the Attorney General’s Revenue LitigationBureau for collection action. A Verified Complaintwith a 30 day Summons was filed. The provider’sattorney submitted a Settlement offer and afternegotiation with OIG, the provider paid $9,000.

Two pharmacies owned by a husband and wife,enrolled as providers in the Illinois Medicaidprogram, were found to have been overpaid$18,484. The owners entered into a SettlementAgreement to repay the Department in full over 12months beginning in 2007. Over the next four years,they managed to repay $13,215 leaving an unpaidbalance of $5,269. All attempts to collect from theseproviders were ignored, including a referral to aCollection Agency. Further research uncovered thehusband and wife team were also the owners andoperators of a convenience store in Chicago andwere receiving SNAP benefits. 4 It was determinedthat these SNAP benefits were being used topurchase items in their own store. The case wasreferred to the Attorney General’s RevenueLitigation Bureau for assistance. A VerifiedComplaint was filed and served, and the providersoffered to settle the debt for 80% of the amountowed. OIG promptly denied this offer stating thatthe providers had ample time, 11 years, to repay

their debt, and had already defaulted on oneSettlement Agreement. The providers agreed to paythe full amount and have been submitting checksthrough the Attorney General’s Office.

In 2008, a physician pled guilty to state VendorFraud and was ordered to pay Restitution to theDepartment in the amount of $146,000, to be paidin full by 2010. From 2008 through 2011 theprovider paid $67,779, leaving an outstandingbalance of $78,221. In 2011, a civil judgment wasentered in favor of the State for the remainingbalance, and the provider’s probation wasterminated as unsatisfactory. No further paymentswere made by the provider. In 2016, researchfound that the provider was employed and wageswere sufficient to justify wage garnishment. In2017, the case was referred to the AttorneyGeneral’s Revenue Litigation Bureau for assistance.The Restitution Order was revived, recorded, and aCitation to Discover Assets was filed. In 2018,the Department began receiving checks through theAttorney General’s Office as a result of thewage garnishment placed on the provider.

Referrals to the AttorneyGeneral for Bad DebtWrite-OffWhen all collection efforts have been exhausted, arequest is submitted to the Attorney General’sOffice to have the debt certified as uncollectible.Certain situations prevent pursuit of an outstandingdebt, including: a discharge in bankruptcy,dissolution of a corporate debtor, or death of anindividual debtor, with no estate. A case packet isprepared and sent to the Attorney General’s Officefor processing. If the Attorney General’s Officedeems the debt uncollectible, the previouslyestablished receivable is reduced by the amountcertified as uncollectible and written off. 5

4 The case was also referred internally for recipient eligibility review.5 The state receives their FFP portion at the time the receivable is written off.

As you can see from the chart, theprocess has reduced the held bad debtwhich results in the recovery ofpreviously paid federal funds.

OIG began an initiative in 2014 totackle the backlog of bad debt casesoutstanding for the priordecade. Initially, the cases wereprocessed in order of largest debt tothe Department. The processhas reduced the backlog which hasresulted in the recovery of previouslypaid federal funds.

Over the last three years, OIG hasworked extensively on building astrong working relationship with theAttorney General’s Office to actively pursue thesecases. Both agencies have established an efficientprocess to coordinate referrals. Collection effortscan often be unsuccessful, but through thisincreased collaboration with the Attorney General’sOffice, OIG has had increased success rates ofoverpayment fund recovery.


Administration

Highlights230 New Provider Verification Applications ReviewedProviders Denied: 4Providers Enrolled: 110Applications Returned: 94Enhanced Screening: 3

98 Provider Revalidation Applications ReviewedProviders Denied/Terminated: 5Providers Revalidation Approved: 89Applications Returned: 0Enhanced Screening: 2


AdministrationManagement, Research and Analysis Section (MRA)The Management, Research and Analysis Section(MRA) was established to conduct and coordinatehighly complex technical processes that impacthealthcare fraud. MRA performs these dutiesthrough designing and evaluating specializedresearch projects related to discovering fraudulentbehavior and coordinating the collection of data todevelop fraud detection routines for inclusion in theCASE Management system. Additionally, MRA Staffis responsible for reporting findings and makingrecommendations based on the results fromresearch studies and data analysis in an effort toimpact healthcare fraud and to aid in increasingefficiency within all of OIG. This Unit is alsoresponsible for evaluating program policies andprocedures relating to Medicaid fraud. MRA servesas the OIG liaison with Agency staff and facilitatesattainment of project or study goals on monthlystatistical reports for all OIG bureaus. The MRAmanager is the liaison with the MCO and alsooversees the Fraud, Waste and Abuse Executive(FAE).

The monitoring of non-emergency transportationproviders began in June 2001. This was done byperforming pre-enrollment on-site visits to verifytheir business legitimacy and by performing ananalysis of their billing patterns to detect aberrantbehaviors during a 180-day probationary period.This process has been expanded under the SMARTAct to include monitoring of High, Moderate, and attimes, Limited-risk providers. This expansion,called New Provider Verification (NPV), includesfingerprint-based background checks, verificationof licenses, insurances, corporate standings, and on-site visits. High-risk and Moderate-risk providersare also continually monitored through their billingsfor one year. Limited-risk providers are monitoredfor a nine-month probationary period.

Depending on the provider type, the Bureau ofInvestigations (BOI) or the Bureau of MedicaidIntegrity (BMI) would conduct the onsite readinessreview. During on-site visits, the business’ locationand existence is confirmed; information provided onthe enrollment application, including ownershipinformation, is verified; and the business’ ability toservice Medicaid clients is assessed.

Fingerprint-based background checks are generallycompleted on individuals with a 5 percent or greaterownership interest in a provider or supplier that fallsunder the High-risk provider category. High-riskprovider types are determined by federal CMS andmay be added to by the individual states, basedupon their systems’ needs. Federal CMS currentlylists Durable Medical Equipment (DME) providersand Home Health Agencies (HHA) as High-riskproviders. Illinois has added Non-EmergencyMedical Transportation (NEMT) providers to itshigh-risk category. High-risk providers also includeproviders who have prior OIG sanctions or owe adebt to the Department.6

6 Pursuant to provisions of federal regulations 42 CFR §455.100 Subpart B—Disclosure of Information by Providers and Fiscal Agents and §455.400 Subpart E—Provider Screening and Enrollment.

PES has resumed the responsibility of credentialing,collecting documentation, and vetting anyenrollment applications before sending them to theOIG. This revised business model will greatly cutdown on usage of OIG administrative time andresources and will allow the OIG to focus solely onProgram Integrity functions of reviewing applicantsfor sanctions and criminal backgrounds.7

As the restructuring occurred for the MRA Section,more attention can be focused on proactive researchprojects to aid in highlighting risk areas for theDepartment, as well as highlighting areas forimproved efficiency. At the time of printing, onesuch risk-based research essay has been completedand presented to Department Management. Thisessay and future essays will be presented in theFY19 Annual Report.

As the OIG Liaison with the Managed CareOrganizations (MCO), the MRA unit is workingclosely with the MCOs to facilitate improvedcommunication and increased information sharing.Additionally, MRA has begun working closely withthe HFS Bureau of Managed Care (BMC) toaddress and identify areas of concern in regards toProgram Integrity for the Department. The OIGholds monthly case review meetings, which areattended by representatives from the MCOs, IllinoisState Police-Medicaid Fraud Control Unit (ISP-


AdministrationEnrollment may be denied by OIG for variousreasons:• an incomplete enrollment package;• a non-operational business;• the inability to contact the applicant;• a requested withdrawal by the applicant;• applying for the wrong type of services;• the applicant’s non-compliance with fingerprinting or documentation requirements;• the failure to establish ownership of vehicles;• fraud detected from another site affiliated with the applicant;• an applicant’s participation in the Medicaid Program using another provider’s number; and• providing false information to the Department.

Per the Affordable Care Act (ACA), HFS, as theState Medicaid Agency, must revalidate theenrollment of all providers regardless of providertype at least every 5 years. Revalidations areconducted as full screenings and are appropriate tothe risk level as described above in the NPVprocess. If providers are non-compliant withrequests for additional documentation during therevalidation process, the OIG may take action;including, but not limited to, payment suspensionsand terminations.

The MRA section underwent a restructuring inFY18 to reorganize and streamline duties within theOIG to establish efficiency. One key component ofthis restructuring was to return the providercredentialing, document collection, and vetting ofany sanctions for New Providers and ProviderRevalidation applications back to HFS ProviderEnrollment Services (PES). Previously, the OIG hadbeen assisting PES with the credentialing anddocument collection for High-risk providers duringthe transition period from the paper-basedenrollment process to the cloud based IllinoisMedicaid Program Advanced Cloud Technology(IMPACT) system. This created a distinct burden onthe OIG, as there is only one OIG staff memberdedicated to the process. As of the end of FY18,

Rapid Results:Provider enrollment responsibilities, documentationcollection, had been re-assigned from ProviderEnrollment Services to HFS-OIG in 2014, delaying themonitoring and investigation process within HFS-OIG. Prior to the implementation of IMPACT, PES heldthe responsibility for these duties. The shift of workload back to PES will save worker hours within theOIG, and will improve the process of monitoring andinvestigating providers and provider sanctions duringenrollment and re-enrollment.

7 This is also a Rapid Results case for OIG.

The OIG also meets quarterly with the MCOs andBMC as a group to review any concerns andquestions, also to update on any departmental orpolicy issues or to highlight specific investigationswhich may have a large recovery or that may havecommonality across different payers or books ofbusiness. Additionally, given the restructuring ofMRA resources in FY18, new processes andreporting methods have been implemented and willbe highlighted in FY19.


AdministrationMFCU), and the OIG Units who review and analyzefraud, waste and abuse cases. These case reviewmeetings bring together a variety of key players inthe program integrity arena, and bridge the gapbetween MCOs, law enforcement and theDepartment. In these meeting, MCOs present trends,schemes and specific allegations of fraud for allpartners involved to review and discuss. Some ofthese allegations and cases discussed can be furtherreviewed for any potential criminal, civil oradministrative actions.

The total number of applications reviewed includes NPV or revalidation applications, which were either closed through

administrative action or due to applications being withdrawn by the Medicaid providers themselves.

IMPACT trainingA collaborative, hands-on training session was held for all OIG staffand The Illinois State Police-Medicaid Fraud Control Unit (ISP-MFCU)staff. Two sessions were held to accommodate Chicago staff andSpringfield staff. A total of 82 staff attended the sessions. Thesessions were provided in conjunction with HFS Provider EnrollmentServices (PES). In both training sessions, staff were taught how to

search and retrieve necessary provider enrollment information from the IMPACT database, which will allow them toperform their work duties more efficiently. Participants were shown a PowerPoint presentation informing them aboutthe history of IMPACT, as well as its functions and capabilities as it relates to their respective positions. This trainingreceived high reviews from attendees, and has allowed staff to personally research and obtain documents andinformation without the need of seeking assistance from other Department staff. One comment from the evaluationsread “Excellent job! The most helpful IMPACT training received to date!”


Administration

Examples:

MCO/OIG/MFCU cross trainingTo further develop the relationships and lines of communication betweenthe MCOs, ISP-MFCU and itself, HFS-OIG hosted an inauguralcollaborative cross-training session on May 29, 2018. A total of 98participants in several locations attended this session via videoconference, including individuals in Springfield, Joliet, and Chicago. Atthis event, representatives from each MCO presented an overview of their respective program integrity processes. Thetraining included presentations from HFS-OIG, BMC, and ISP-MFCU, among others. This was the first cross-trainingsession of its kind, and due to its success, HFS-OIG is planning to continue to hold these training events annually andinclude additional partners and encourage more specific presentations on schemes and trends in fighting fraud,waste and abuse. To ensure that future trainings are successful, HFS-OIG surveyed the participants in the training. Thefeedback was overwhelmingly positive and included comments such as:

“Great collaboration between OIG/LawEnforcement and MCO.”

“The entire presentation/trainingwas very useful.”

“This was a good starting point for future meetings with all entities involved.”

“The opportunity to learn from each ofthe entities and receive contactinformation for future reference.”

MRA also works to ensure that all OIG staff (and respective law enforcement partners) have access to and aretrained on OIG programs, policies and procedures.


AdministrationFraud Abuse Executive (FAE)

9 This dollar amount does not include MCO payment information but does include monies held by sister agencies.

The Fraud Abuse Executive (FAE) is the primaryliaison with state and federal law enforcemententities, as well as other government regulatoryagencies and counterparts, as it relates to theIllinois Medicaid Program. This relationshipinvolves direct communication with externalagencies such as the Illinois Attorney General’sOffice and the Illinois State Police Medicaid FraudControl Unit (MFCU). The FAE evaluates andtransmits fraud and abuse referrals to MFCU, aswell as other governmental agencies,depending upon the allegation.

The OIG supports other law enforcementcounterparts and key entities within the US federalgovernment, such as Department of Health andHuman Services HHS-OIG, CMS, FBI, U.S.Department of Justice (USDOJ), U.S. Attorneys,and National Association of Medicaid FraudControl Units (NAMFCU). The FAE coordinatesthe disposition of global settlement agreementsgenerated by the National Association of AttorneysGeneral, HHS-OIG and the USDOJ. Working hand-in-hand with these agencies regarding potentialcases and allegations of Medicaid fraud, waste andabuse, the FAE coordinates data collection andanalysis, as well as research regarding providerenrollment documentation.

The FAE also identifies key departmental staffmembers and other governmental staff members towork with state and federal law enforcement entitiesto provide specific information regarding policy andprograms. These staff may be asked to providewitness testimony at criminal and civil proceedings,as it relates to the Illinois Medicaid Program.

The FAE monitors all actively pursued lawenforcement cases, and upon completion, willcoordinate internal administrative actions asnecessary. Administrative actions could include

HighlightsExternal referrals: 57Global Settlement Agreements: 14Referrals to MFCU: 31Data requests from law enforcement: 93 FFS, 17 MCOInformation requests from law enforcement: 160Personal Assistant / Waiver providers: Referred to DHS and Aging: 523 Referred to MFCU: 29 Referred to BAL for termination: 28

Audit reviews, Peer Reviews and paymentsuspensions, as well as possible termination fromthe Illinois Medicaid program. The FAE is theliaison between law enforcement and OIG andensures that providers are administrativelysanctioned if any criminal or civil case results inconviction. After legal processes result inconvictions of providers, the FAE works inconjunction with the Office of Counsel to theInspector General (OCIG) to administrativelyterminate these providers from the MedicaidProgram.

The OIG is statutorily required to suspend paymentsto Medicaid vendors when OIG determines acredible allegation of fraud exists8. The FAE worksin conjunction with OCIG on the implementation ofpayment suspensions pursuant to 42 C.F.R. 455.23as well as the enhanced payment suspensioncapabilities authorized by the SMART Act (PA 97-0689). Ending in FY18, the OIG is withholdingpayments from providers with credible evidence orallegations of fraud, totaling over $7 milliondollars.9 One specific case in FY18 involvedsuspending payments to a Medicaid vendor where,

8 42 CFR 455.23 Suspension of payments in cases of fraud.

10 This number is reflected in the total reported above, 523 cases being returned to DHS and Aging.


Administration

upon investigation by the OIG and lawenforcement, it was determined that acredible allegation of fraud existed. Inworking with law enforcement, the OIGbegan withholding payments to the providerand, as of this report print date, the totaldollar amount being withheld for thisprovider alone is over $3 million dollars.

Personal Assistants and waiver providers areone category of providers which the OIGand law enforcement take action uponregularly, both at a state level and nationally.In FY18, the FAE referred 28 PA cases toOCIG for termination. As noted in the MPISsection of this annual report, this providertype is notorious for fraud schemes. InFY18, the FAE and Inspector General Hartworked tirelessly on a tremendous backlogof PA cases, which were the result of manyadministrative issues, one being lack of OIGstaffing. The FAE established a protocol forvetting and researching the backlogged PAcases and through cooperation and assistancebetween DHS and ISP-MFCU, OIG wasable to reduce the backlog by over 700cases.10 New processes have been put inplace to triage and address the review of PAreferrals, ensuring that they are processedtimely and effectively.

The FAE continues to work closely with oursister agencies and law enforcement partners asit relates to program violations or potentialcriminal and illegal activities. The FAE isresponsible for tracking referrals sent fromOIG to other agencies. Referrals can be madeto other Illinois state regulatory agencies suchas the Illinois Department of Financial andProfessional Regulation (IDFPR), the IllinoisDepartment of Public Health (IDPH), DHS, aswell as to Federal CMS, HHS-OIG and theDEA. These referrals can result from OIGprovider committee reviews, audits, Peerreview cases or Provider Analysis (PAU) cases,in which provider education, licensingconcerns or billing concerns have beenidentified and need to be addressed by anotherjurisdiction.



Bureau of FraudScience andTechnology

Section

2

The Bureau of Fraud Science and Technology(BFST) is responsible for the introduction,development, maintenance, and training of staff onnew technologies. BFST utilizes sophisticatedcomputer technology to analyze, detect, and preventfraud, waste and abuse by providers and recipients.BFST oversees the maintenance and enhancementof the Dynamic Network Analysis (DNA) PredictiveModeling System, a Center for Medicare &Medicaid Services (CMS) “Best Practice” put intoproduction in September 2011; and CaseAdministrative System Enquiry (CASE), a highlysophisticated case tracking, and documentmanagement system developed specifically for OIG.BFST responds to referrals from within and outsidethe Department. The areas within BFST include theProvider and Recipient Analysis Section (PRAS),Recipient Restriction Program (RRP), FraudScience Team (FST) and the TechnologyManagement Unit (TMU).

BFST initiatives center around the OIG’s mission toinsure program integrity, while evaluating dataintegrity. BFST is upgrading the case investigativetool used across the OIG with the intent ofextending usage options to entities outside of theOIG that have similar programmaticresponsibilities.

HighlightsFraud Science Team (FST) develops frauddetection routines to prevent and detect healthcarefraud, abuse, overpayments, and billing errors. FST works with the Department to identifyvulnerabilities and solutions in the Department’s payment system. FST routines are analyticalcomputer programs written in Statistical AnalysisSystem (SAS), Teradata SQL, and DataFlux,utilizing the Department Data Warehouse alongwith other third-party data sources. FST alsoidentifies program integrity solutions, pre-paymentclaims processing edits, policy innovations,operational innovations, fraud referrals, desk


Bureau of Fraud Science and TechnologyFraud Science Team/Technology Management Unit

reviews, field audits, and self-audit reviews. BFSTtakes systematic approaches to plan and implementthe integration of sampling selection and auditreporting, DNA-CASE integration, statisticalvalidation, executive information summaries, andother analysis that will improve OIG’s operationaland decision-making processes.

Technology Management Unit (TMU) isresponsible for all computer related transactionswithin OIG, coordinating with the Department ofInnovation & Technology (DoIT) on networkaccess, as well as hardware and software requests.Database design and development, webdevelopment, computer training, and technicalsupport are also essential functions provided byTMU. Functions completed by TMU are central tothe success of the various units within the OIG.

TMU coordinated resolution of 4,225 OIG HelpDesk inquiries during FY18. Another function ofTMU is to complete data requests from federal,state, and local law enforcement agencies; 102 datarequests were completed, of which many will resultin dollars being returned to the state from courtdecisions and settlements. TMU staff also assistedwith any issues related to complete replacement ofall OIG printers. OIG’s CASE system was migratedto DoIT’s Shared Web Services. TMU also assistedwith ongoing testing and implementation of newfeatures and software related to the Enterprise DataWarehouse (EDW). Progress also continued on theState’s Enterprise Resource Program (ERP) project,with TMU staff providing consultation onsupporting system transitional issues, and acrossplatform system integration concerns. Despiteongoing vacant positions and staff shortages, TMUhas continued to deliver a high-level of technicalconsultation, programming and support services tothe OIG.


Bureau of Fraud Science and Technology

Dynamic Network Analysis(DNA) FrameworkDevelopment InitiativeThe Bureau of Fraud Science & Technology (BFST)oversees maintenance and enhancement of theDynamic Network Analysis (DNA) Framework.Under BFST’s direction, the DNA developmentteam continuously strives to adopt federal and statepolicy and regulation changes, provide creative dataanalytics on various mission-critical subjects, andadd new routines to the DNA system. With thedeployment of further features and modules, theDNA system has become one of the primaryinvestigative and analytic tools for OIG. In FY18,the creation of more than 13,000 reports and jobsincluded provider profiles, recipient profiles,provider claim details, and recipient claim details.These reports and jobs provide comprehensive dataanalytics for auditors and investigators to use whenresearching potential fraudulent providers andrecipients in their efforts to combat Medicaid fraud,waste, and abuse. The following modules oranalyses are additions to the DNA system and areutilized to enhance the efforts of auditors andinvestigators.

Opioid AnalysisIn recent years, the opioid epidemic has become apublic health concern nationwide. The U.S.Department of Health & Human Services Office ofthe Inspector General (HHS-OIG) released a Toolkitto calculate opioid levels and identify patients atrisk of opioid misuse or overdose. BFSTincorporated the federal methodology and revisedcurrent routines to synchronize with federalguidelines and standards. The analysis of recipientopioid level and identification of recipients at riskof opioid misuse or overdose used an extraction ofpharmacy claims data from the most recent fiveyears. To allocate recipients into different opioidrisk categories, such as Medium, High, or Extreme-risk, the morphine milligram equivalents (MME)per-day and the maximum of any 90-day averageMME were calculated and applied. Other indicators,such as doctor-shopping, recipient death, cancer

history information, and opioid antidoteconsumption, are included in the analysis. Based onopioid prescription volumes and frequencies, theidentification of corresponding physicians helpsauditors and investigators have a more completepicture of the opioid crisis.

The OIG is currently integrating algorithms tocalculate patients' average daily morphine milligramequivalent (MME) dosages, which converts variousprescription opioids and strengths into one standardvalue. MME values can be used to analyzeprescription drug data and identify patients whomay be misusing or abusing prescription opioids,placing them at increased risk for adverse or fatalevents. This allows the OIG to identify recipients inneed of additional case management (such as aLock-In Program) or other follow-up. It alsoidentifies practitioners who may be puttingMedicaid recipients at risk by overprescribing thesedangerous drugs. In an attempt to address the opioidepidemic, the State of Illinois passed legislationrequiring prescribers to check the prescriptionmonitoring program (PMP) prior to prescribingopiates. This law became effective January 1, 2018.

Executive SummaryExecutive Summary Reports show pre-summarizedinformation by selected topics, which provide astatewide overview to executive users. Under theHealth Choice Summary section, monthly andyearly comparisons between MCO payments andFFS payments display the most recent five years.The comparisons are available for both county andstatewide level by provider types, or by servicecategory. Similarly, users can compare differenthealth plans based on payment information for theMedicare-Medicaid Alignment Initiative (MMAI)program.

Provider Peer ComparisonAdded to the DNA system in FY18 is the ProviderPeer Comparison routine. Users of this routine cancompare a provider’s service and payment patterns,and use specified procedure codes for peer analysis.Descriptive statistics from this module indicate if a


Bureau of Fraud Science and Technologyprovider falls outside the peer group norm for thesame provider type and geographic region.Investigators are better able to quickly narrow downpotential fraudulent providers through the use ofthis module.

Medicaid VerificationOften, OIG investigators are required to check if anindividual is simultaneously a recipient of theMedicaid program and a provider or payee.Implementation of the new Medicaid Verificationmodule assists in this process. Extraction of anindividual’s relevant information from the Medicaidprogram occurs by inputting recipient or providerIDs, full or partial names, and NPI. The system thensearches the entire Medicaid system to determine ifthe individual is either a Medicaid recipient,provider, or both.

Audit VerificationA frequent challenge for OIG auditors is ensuringthat previously audited claims from a desk audit,field audit, RAC audit, or provider self-disclosureare excluded from the new audit universe. Whenperformed manually, this can be a time-consumingtask. The Audit Verification database records alldemographic information of previously auditedproviders and corresponding audit universes. Builtinto the DNA system, this innovative databaseeliminates the error-prone manual-checking processthat determines whether there is a need for a newaudit task based on historical data. In addition, thesystem guarantees the correct carve-out process andhelps users retrieve audit data more easily if anyquestions should arise during future litigation.

Peer Review Inquiry ReportThe DNA development team is collaborating withthe Bureau of Medicaid Integrity (BMI) PeerReview unit to convert routine work into automatedpeer review reports in the DNA, which willsignificantly increase effectiveness and accuracy ofresults. Peer Review Reports are planned to increasefrom approximately 11 to 24 reports. These reportsare provider-specific and will be utilized by staffwho can use them to review prescribing patterns,

procedure code use, and interrelated relationshipsbetween providers. Multiple reports populate an“all” feature or allow the user to populate specificinterests such as procedure codes or diagnosis codesfor a desired time frame. Additionally, generatingreports for specific provider groupings, such asphysicians, dentists, long-term care facilities, andnurse practitioners, will soon be possible.

Provider and RecipientInquiriesThe resulting layout for both Provider Inquiries andRecipient Inquiries switched from table to drop- down view. This change allows users to see thetrends in payment, recipient and services, and top-ten paid procedure codes for each provider moreeasily. The change also enables a quick togglefunction for different claim types, including drug,inpatient, Non Institutional Providers (NIPS), andoutpatient for each recipient.

Investigative CaseManagement InitiativeAn investigative CASE system is necessary to trackthe daily investigative activities, task completionand retaining supporting documentation in variousmedia. The current CASE system supportsapproximately 90 Staff working on 3,000 to 5,000current case investigation activities, and is therepository for over 360,000 cases. Entities externalto OIG performing these tasks include the IllinoisState Police, Attorney General’s Office, as well asother state agencies.

Xanalys Investigation Management (XIM) is aninvestigative case software being procured toreplace the current CASE system. The new XIMsoftware will work seamlessly with OIG’s DynamicNetwork Analysis (DNA) system. The DNA systemprovides all OIG staff with “real-time” dataanalytics, link analysis, visualization analysis, andvarious other data metrics and researchfunctionality. The DNA system runs on a SASEnterprise Technology, acquired in 2008, and worksdirectly with the HFS data warehouse, as well asother data sources.

1 CPIP is a prestigious certification held by very few Medicaid analysts across the country. The intense training (offered free to OIG staff through a collaboration between US DOJ and the federal CMS) includes fundamental courses and examinations exploring common and emerging health care fraud schemes and how to investigate, gather evidence, and prepare cases for prosecution.


Bureau of Fraud Science and TechnologyProvider and Recipient Analysis Section (PRAS)

Highlights in FY18:113 provider referrals received - of these: 76 medical providers analyzed 63 cases presented to Narrative Review Committee; 9 providers sent Narcotic Letter of Concern; 13 cases closed with no further action warranted as allegations were unsubstantiated 180/365 day monitoring program:Non-Emergency Transportation, DME, Labproviders169 providers monitored and analyzed - of these: 150 were enrolled 19 were disenrolled

Within the Provider and Recipient Analysis Section(PRAS) of BFST is the Provider Analysis Unit(PAU) and the Recipient Analysis Unit (RAU). PAUis the triage unit for incoming Medicaid providerreferrals and for monitoring medium and high riskprovider-types one year prior to full enrollment(180-365 monitoring program). The Unit iscomprised of five registered nurses and a nursemanager. Through the relationship with HFS-OIGand the NAC/MII, OIG staff is able to obtainvaluable and prestigious educational training whichadds value to the OIG. For example, two nurseanalysts have become Certified Professional Codersand one is pursuing a Certified Program IntegrityProfessional (CPIP) certification in FY19 throughthe NAC/MII collaboration.1

Provider Analysis UnitPAU nurse analysts add clinical expertise to OIGinvestigations, by identifying and researchingaberrant Medicaid provider billing practices byMedicaid providers. The nurse analysts perform in- depth analysis of billing records to determine ifclaims and services are appropriate. Targeted datarun queries are also requested to identity billingoutliers. Billing trends, payment amounts, businessinter- relationships and pharmaceutical prescribingpatterns are all reviewed and compared to similarproviders, within the same service specialty.

180/365New Provider Verification (NPV) involves pre-enrollment monitoring or “365-day conditionalenrollment” of non-emergency transportationproviders (NEMT), as well as other moderate andhigh risk provider types such as durable medicalequipment and laboratories for one year prior to fullenrollment.

For NEMT, OIG Investigators complete on-siteinspections of the providers to verify businesslegitimacy and perform an inspection of vehiclesused to transport clients to and from medicalappointments. This initial inspection also includesfingerprint-based background checks, verificationof licenses, insurances, safety certificates andcorporate standings.

During the initial 180-day probationary period, theanalyst monitors any provider billing patterns todetermine or detect any potential billingabnormalities or aberrant behaviors. The analystwill often contact providers to inquire and offerguidance at the mid-point of their enrollmentprocess.

Prior to completing 365 days of conditionalenrollment, the analyst again analyzes billingpatterns, looking for any of the same issues. If noconcerns are identified, the provider is fullyenrolled as a Medicaid provider. If problems areidentified, the provider may be granted a 180-day or365-day extension of the initial agreement or maybe disenrolled, depending on issues identified.


Bureau of Fraud Science and TechnologyAfter review of each provider, the findings arepresented at the OIG’s Narrative Review Committee(NRC). The NRC is comprised of Inspector GeneralHart, managers of Audit, Peer, PAU, OCIG and alsoincludes representatives from MFCU. Cases arepresented to determine if the providers warrantadditional investigation for any of the issues below:

• Quality of care concerns• Potential risk of harm to the patient• Fraudulent activities• Billing or prescribing “outliers”

Actions recommended by this committee mayinclude:

• Sending a letter of concern to the provider• referral for an audit• referral for a focused Peer Review• referral to law enforcement for any suspected criminal violations• imposition of a payment suspension• recommendation for denial/disenrollment or additional monitoring of Moderate/High risk providers (180/365) recommendation to HFS administration for a policy change as evidenced to the following scenario:

A referral was received from anotherState alleging potential fraud ofexpensive topical anestheticprescriptions. PAU nurse analystsidentified there was little, if any,medical necessity to support the use,quantity and duration of the expensiveprescriptions reviewed, suggesting thatthe product may or may not have beendispensed to recipients, signifyingpotential false billing practices. Thiscase was referred to appropriateentities and is presently underinvestigation.

PAU’s clinical review of this pharmacyrevealed a significant spike instatewide prescribing of 5% Lidocaineand other expensive topical anesthetics.As a result, PAU performed data

analysis on the specific therapeutic class of thisdrug, and identified additional providers withquestionable prescribing practices. These providersare currently being investigated for potential fraud,waste and abuse.

Below is a snapshot showing the substantialincrease in payments for specific therapeutic classfor topical anesthetics since 2013:A cost analysis completed by the HFS pharmacyunit revealed 5% Lidocaine costs the Department $6per gram, while 4% Lidocaine costs $1 per gram.Due to the tenacity of the PAU nurse analysts andthe substantive quality of their investigation andfindings, OIG-PAU and HFS’s pharmacy unitcollaborated to enact a change in Departmentpolicy. In April of 2018, quantity limits were placedon 5% Lidocaine. In addition, a prior approvalrequirement was put in place for additionalquantities of the prescription. HFS’ pharmacy unitwas also able to negotiate a better price for themedication, adding additional cost savings to theState of Illinois. This was submitted as a RapidResults Project in FY18 and HFS-OIG will havetotal cost savings to be reported in FY19.

* MCO payment amounts are currently being re-validated by administrationand IT staff and are unable to be 100% validated at this time.


Bureau of Fraud Science and TechnologyRecipient Analysis Unit (RAU)

2 “Vegas Cocktail”, aka “Holy Trinity” is a dangerous recreational drug combination consisting of 3 drugs taken together to induce extreme euphoria. The combination can cause respiratory depression and death.

The purpose of the Recipient RestrictionProgram (RRP) is to identify, detect and preventabuse of medical and pharmaceutical benefits,based on set parameters in federal and stateregulations, as well as HFS policy. RRP uses theDNA Predictive Analytic model and profile-reporting system for data that identifiesoverutilization of services by enrolledrecipients. Other referral sources include tipsregarding potential recipient fraud or abuse fromthe OIG website, Medicaid Fraud Hotline andcalls to the RRP hotline. When recipients utilizemultiple prescribing providers and multiplepharmacies, they are at a significant risk foradverse and potential life threatening situations.The RRP is designed to promote recipient safetythrough care coordination, often referred to as aLock-In Program. Specific indicators willtrigger Lock-In Program intervention, and also,in the case of a fee-for-service recipient, a singleprimary care provider. The OIG has establishedprotocols for the identification, restriction,monitoring and periodic evaluation of recipientssuspected of abusing pharmacy benefits or over-utilizing covered medical services. Additionally,one RAU analyst is dedicated part-time toevaluating recipients who have been identifiedthrough data analytics or by referrals, as beingprescribed the “Holy Trinity” or a “VegasCocktail”.2 In FY18, this analyst reviewed 701recipients.

Given the transition to Managed Care, OIGprovides assistance to MCO partners in developingand implementing their Lock-In Programs. UsingHFS guidelines, most MCOs implemented apharmacy Lock-In Program; others implementedboth primary care provider and pharmacy Lock-InPrograms.

Top Accomplishments in FY18:• 2,835 cases reviewed - 701 of these were Vegas Cocktail cases • 378 recipients restricted in FFS• 816 restrictions recommended to MCOs• 2,030 total number of FFS restrictions as of 6/30/18• Total cost avoidance for RRP: $2,209,495



Bureau of Internal Affairs

Section

3


Bureau of Internal AffairsThe Bureau of Internal Affairs (BIA)investigates misconduct of State employees andcontractors, while also monitoring the safety ofemployees and visitors in Department buildings.BIA is charged with security oversight of HFS,which involves conducting assessments on threatsreceived from employees, non-custodial parents,clients and civilians.

BIA ensures compliance with State regulations asit pertains to new employee hiring by obtainingand researching the criminal history informationof all applicants. These background checks arerequired for all Staff who needs access toproprietary data sources.

The Bureau is responsible for monitoringemployee Internet traffic and the use of Stateresources. By utilizing a variety of investigativemethods, BIA identifies fraudulent staff activityand security vulnerabilities. BIA conducts forensicexaminations of Department Personal Computers(PCs) when an investigation warrants this action.

The Bureau prepares investigative reports andshares the findings with the agency’s divisionadministrators, the Bureau of Labor Relations, andwith state and federal authorities if necessary.Once an investigation is completed and the reportis published, the Division Administrator or theBureau of Labor Relations are required to reportany action taken back to the Bureau within 30days.

Investigations conducted by the Bureau caninclude inquiries into public aid fraud, criminalcode offenses, contract violations, and criminaland non-criminal work-rule violations. Internalinvestigations often reveal violations of workrules or criminal statutes. A single investigationmay cite multiple violations, and involve multipleemployees or vendors. Resolutions may includeresignation, dismissal, suspension, orreprimanding.

HighlightsInvestigationsTotal Staff: 10 Open/Active cases: 321

Total cases opened: 492Total completed cases: 520Average Case Processing Time: Background Investigations – 2.98 Days General Investigations – 69.29 Days

Investigation Outcomes BIA received an anonymous complaint on May 24,2016, alleging that a Human Resource Specialistwas utilizing HFS computer equipment for personalschool work during work hours. The employeeadmitted to, and Agency forensic imagingconfirmed, that the employee forwarded a largenumber of non-work related materials (e-mails,pictures and documents) from the employee’s homee-mail to the work computer, and additionallyprinted personal e-mails during the workday. Theemployee acknowledged that the actions were inviolation of Department policy and subsequentlyreceived a 30 day suspension on July 28, 2017.

On August 18, 2017, while performing maintenanceon computers used by the BIA, it was discoveredthat an Information Systems Analyst I had accessedcomputers used by the Internal Affairs Chief andStaff. Forensic examination of the employee’scomputer indicated that the employee had alsoaccessed the computers of the Administrator ofHealthcare and Family Services, the Division ofPersonnel and Administrative Services, and thepersonal drive of a Division of Child SupportServices employee. The investigation determinedthat the Information Systems Analyst violatedmultiple HFS Employee Handbook policies.2 This

2 (EH) 605.1Section 605.1a #21 – Misuse of Computer Systems and Employee Handbook Section 605.1a #3 –Inappropriate Behavior.

1 Total represents 26 Record Keeping Cases and 6 Active Investigations.


Bureau of Internal Affairsemployee held a sensitive position, having nearlyunlimited access to the HFS computer system. Theemployee used their position to access unauthorizedfolders, which were not part of official duties andcould not provide an explanation as to why theywere accessed. The Information Systems Analyst Iwas discharged on April 6, 2018.

BIA received a complaint on April 23, 2018,alleging that a Public Service Administrator (PSA)was frequently tardy, used extended lunch periods,and had falsified time and attendance records. Theinvestigation determined that the employee violatedmultiple HFS Employee Handbook policies: failingto report to work at the regularly scheduled workhours on 29 separate instances, extended lunchperiods on 11 instances without taking appropriateauthorized Available Benefit Time, allowing asubordinate to falsify Employee Daily Time Logs,and failing to address the employee when they didnot report to work on time.3 The Public ServiceAdministrator received a 14-day suspension onAugust 20, 2018.

BIA conducted an Internet use review anddetermined a Medical Assistance Consultant III(MAC) appeared to have excessive, non-workrelated internet usage. Through the employee’s ownadmission and forensic evidence, the investigationdetermined that the employee violated multipleEmployee Handbook policies when the employeeused the Department’s equipment and resources forstrictly personal reasons.4 The employee admitted tousing Agency resources to make purchases onshopping websites and to access their personal e-mail and banking accounts. The Medical AssistanceConsultant III received a 1-day suspension onMarch 5, 2018.

4 (EH) 605.1 and 635, #21 Misuse of Computer Systems and Internet Security.

3 (EH) 605.1 #2 Repeated and Excessive Tardiness or Absenteeism and/or Violation of the Affirmative Attendance Policy, (EH) 605.1 #5 Unsatisfactory Work Performance or Neglect in the Performance of Duties, and (EH) 120.5 Signing In and Out.

6 (EH) 605, Personal Conduct , 605.1, #1 Violation of Work Rules, (EH) 605.1, #3, Inappropriate Behavior or Discourteous Treatment to Others, (EH-605.1), Personal Conduct/Violation of Work Rules.

5 (EH) 605.1 #2 Repeated and Excessive Tardiness or Absenteeism and/or Violation of the Affirmative Attendance Policy, (EH) 605.1 #5 Unsatisfactory Work Performance or Neglect in the Performance of Duties, and (EH) 120.5 Signing In and Out.

BIA received a complaint on June 21, 2017, whichalleged an Office Coordinator in the Division ofChild Support Services displayed inappropriatebehavior for the workplace when being counseledby the employee’s supervisor. The investigationdetermined that the Office Coordinator wasdiscourteous to the supervisor and inappropriate forthe work place by using profane language whenbeing counseled by the supervisor, displayingfrustration by pounding on their supervisor’s desk,and continued slamming file drawers while exitingthe work area. The Bureau of Internal Affairsreceived another complaint on August 14, 2017, thatthe same Office Coordinator was discourteous to anSPSA and a Security Officer in the Division ofChild Support Services. The investigation resultedin the Office Coordinator being discharged on May7, 2018, as a result of multiple Employee Handbookviolations.5

On April 18, 2018, during routine monitoring of theHFS computer system it was discovered that aHuman Service Case Worker was utilizingDepartment equipment and resources for managingan ESPN fantasy baseball team, visiting theUniversity of Illinois’ website, and sending personale-mail messages. The forensic examination located423 personal e-mail messages that were sent by theemployee. Upon admission by the employee thatthey used Department equipment to monitor andmake updates to an ESPN Fantasy Baseball Team,the employee received a 5-day suspension onAugust 21, 2018.6

An anonymous complaint was received by BIA onApril 7, 2018, alleging that a Child SupportSpecialist Trainee was abusing the State of Illinoise-mail system. During the investigation, the forensic


Bureau of Internal Affairs

examination located 528 non-State of Illinoisrelated e-mail messages located in the employee’ssent folder. For using the State of Illinois internetfor personal reasons, the Child Support SpecialistTrainee received a 7-day suspension. 7

On May 25, 2017, BIA received a complaintalleging that a Public Service Administrator (PSA)had sexually harassed an employee both on and offthe work site. Upon questioning, the PSA deniedhaving a personal relationship with the co-workerwith the intention to mislead and deceiveinvestigators. Upon further questioning by BIA, thePSA admitted to having a relationship with the co-worker and coworker’s husband. The PSA’sintentional false statements constituted a failure tocooperate with an IA investigation, and thereforethe PSA received an oral reprimand on September21, 2018.8

BIA received a complaint on March 13, 2017,alleging that an Office Associate was utilizing Stateresources for personal use. The employee wasallegedly sending job applications to other stateagencies through Certified Mail, at theDepartment’s expense. Upon questioning, theemployee admitted to sending applications and bidforms approximately three times via Certified Mailat the Department’s expense. The Office Associatereceived an oral reprimand on November 15, 2017.9

In FY18, BIA completed a total of 520 Departmentemployee and contractor investigations. Of thistotal, 443 of these investigations were employeebackground checks. During routine criminalbackground checks on new and transferring

8 (EH) 605.1, #1Violation of Work Rules & #3 Inappropriate Behavior or Discourteous Treatment of Others.

7 (EH) 605, Personal Conduct , 605.1, #1 Violation of Work Rules. (EH) 605.1, #3, Inappropriate Behavior or Discourteous Treatment to Others. Employee Handbook (EH-605.1), Personal Conduct/Violation of Work Rules.

9 (EH) 625.1-Use of Office Equipment; 610.1-Conflict of Interest & Governor’s Executive Order #4-Conduct Unbecoming a State Employee.

employees, BIA confirmed that five employees didnot report all convictions on the State of IllinoisSelf Disclosure of Criminal History form (CMS284B). Each of the five employees received a 1-daysuspension. In addition, three additional applicantswere not offered employment because they were nottruthful on their CMS 284 A&B when they appliedto the Department.


Bureau ofInvestigations

Section

4

The Bureau of Investigations (BOI) investigatesallegations of suspected fraud, waste and abuseagainst the Medicaid system by both recipients andproviders. The BOI may pursue criminal prosecutionand administrative sanctions against any recipientand provider under the OIG’s jurisdiction1 for ChildCare Fraud, Eligibility Fraud, and Provider Fraud.

InvestigationsDuring the process of investigating allegations ofprovider and recipient fraud, the Bureau works hand-in-hand with state and federal prosecutors, membersof the law enforcement community, and other stateand federal regulatory agencies. The Bureau is alsoresponsible for processing criminal backgroundfingerprint results for all High-risk providersenrolling as Medicaid providers. BOI investigatorsare also charged with conducting on-site inspectionsof High-risk providers. Investigators conduct on-sitereviews of transportation and Durable MedicalEquipment (DME) providers. The main goal of thesereviews is to ensure that the provider exists, that theirlocation of business is valid, and that all paperworkto conduct business in Illinois has been properly filedwith the appropriate entities.

Child Care FraudInvestigations are conducted when recipients orproviders are suspected of misrepresentation of factsregarding their eligibility for the Child Care Program.Recipient fraud can occur for a variety of reasons:


Bureau of InvestigationsInvestigations, SNAP Fraud Unit, WARP

earnings from providing child care are not reportedas income, child care needs are misrepresented, orchild care payments are stolen or diverted. Providerfraud occurs when claims are made for child carenot provided or for care provided at inappropriaterates. The results of these OIG investigations areprovided to DHS’s Bureau of Child Care andDevelopment (BCCD). In cases where anoverpayment has been identified, it is referred toDHS’s Bureau of Collections (BOC). Once BOCestablishes the debt, they refer it to the IllinoisOffice of the Comptroller for involuntarywithholding. Additionally, should the debt becomedelinquent, it is referred to a private collector. Casesinvolving large overpayments or aggravatedcircumstances of fraud cases are sometimes referredfor criminal prosecution to a State’s Attorney or aU.S. attorney, or to the DHS’s BOC for possiblecivil litigation.

Investigation Outcomes An investigation was completed for a child carecase that alleged that the client received child carepayments in her mother’s name, but reported thatshe resided with her children’s father who had ameans of income. The investigation revealed thatthe client resided with her children’s father while hewas gainfully employed, but failed to report it. Theinvestigation could not substantiate that the client

Bureau of Investigations HighlightsIdentified Overpayment: $7.7 millionCompleted Cases: 824 (of these 615 were founded, 209 were unfounded)Referred for Prosecution with the State’s Attorney: 12Open/Active cases: 3,364Onsite Visits: 109Child Care Overpayment: $85,583Total Staff: 27

1 305 ILCS 5/12-13.1 Inspector General: In order to prevent, detect, and eliminate fraud, waste, abuse, mismanagement, and misconduct, the Inspector General shall oversee the Department of Healthcare and Family Services' and the Department on Aging's integrity functions.

In FY18, the BOI identified$15.2 million in potentialMedicaid recoveries due tototal ineligibility. Unfortunately,there is no current process tocollect these monies.


Bureau of Investigationswas receiving child care payments in her mother’sname. An estimated child care recipientoverpayment totaled $9,972 from December 2011through May 2016.

An Investigation was completed for a child carerecipient case, which alleged that a client falselyreported the identity of her child care provider tothe Department of Human Services from April 2014through March 2017. During this time period, theprovider, who is the client’s father, wasincarcerated. The investigation revealed the clientsubmitted numerous signed redeterminations andcertifications for child care with the incarceratedprovider’s name listed. An estimated child careoverpayment was totaled at $17,465 for the childcare services provided.

Medical Card FraudInvestigations are conducted when recipients orproviders are suspected of misuse ormisrepresentations concerning medical programs.Recipient fraud occurs when recipients aresuspected of misusing their medical cards or whenmedical cards are used improperly without theirknowledge. Examples of recipient fraud include:loaning a medical card to an ineligible person,visiting multiple doctors during a short time periodfor the same condition, obtaining fraudulentprescriptions, selling prescription drugs or suppliesfor personal gain, or using emergency room servicesinappropriately. Founded cases are referred to theRecipient Restriction Program.

Investigation Outcomes An investigation completed for client eligibilitycase alleged the client came to the United Statesillegally and had a child, which they signed up forMedicaid before returning home to Syria. Theinvestigation revealed that the client flew to theUnited States on September 10, 2014 and left thecountry on February 21, 2015. The client had achild in the U.S. while on a travel visa, which wasissued for one month only, to visit family. Beforeleaving the U.S. via O’Hare International Airport,

the client admitted in an outbound interview toImmigration and Customs Enforcement that shefailed to report her pregnancy to U.S. Officialswhen obtaining the U.S. Travel Visa and thatMedicaid paid for the birth of her child. The clientalso admitted that she was a Treasury Officer in Iraqand her husband was an IT manager for an oilcompany. The client’s Medicaid payments totaled$9,335. Immigration and Customs Enforcementdenied a second Travel Visa request from the couplein December 2016, due to the concealment of herpregnancy from U.S. Officials in 2014.

Provider FraudProvider fraud occurs when claims are submittedfor services not provided or for services provided atinappropriate rates. Depending upon the results ofthe investigation, the case may be referred internallyto the Provider Analysis Unit (PAU) for furtherreview.

Personal Assistant (PA) providers are also reviewedand investigated in BOI. As discussed in the MPISsection of this report, this waiver provider type isnotorious for fraud schemes. Given the presentenrollment process, the OIG does not receive theapplications for review of any waiver provider untilafter the provider has started providing services andhas potentially been paid. The BOI’s role is toreview PAs who have a criminal background. TheBOI conducts research on criminal history anddetermines if the PA has a disqualifying criminaloffense. The administrative code authorizes theDepartment to terminate or suspend a provider'seligibility to participate in the Medical AssistanceProgram, terminate or not renew a provider’sagreement, or exclude a person or entity fromparticipation in the Medical Assistance Program,when it determines there is criminal history tosupport such decision. When providers areidentified for termination, they are referred to theOIG’s Office of Counsel to the Inspector General(OCIG) for administrative termination.


Bureau of Investigations

income earned from self-employment. A SNAPoverpayment was estimated at $44,553 from January2011 through May 2018. This case was referred toBOC. This case may be considered for criminalprosecution.

A referral was received alleging a recipient residedwith the father of her children and provided alteredpay stubs to the FCRC in order to qualify for benefits.A BOI investigation confirmed that therecipient also failed to report she was married andconfirmed the pay stubs submitted to the local officewere altered. The recipient knowingly failed to reporttrue household income which resulted in a SNAPoverpayment totaling $23,515 from January 2011through December 2017.3 The investigation wascompleted in November 2017, processed by theFCRC in January 2018, and is currently beingrecouped by the BOC.

Another example of a household composition caseinvestigated by BOI revealed that a recipient failed toreport that her children’s father had lived in theassistance unit with her and their children sinceNovember 2011. Additionally, it was found that thechildren’s father had income from employment. The

SNAP Fraud UnitWithin the BOI, the SNAP Fraud Unit worksdiligently to ensure the integrity of the federalSupplemental Nutrition Assistance Program(SNAP). Recipients who intentionally violate SNAPrules and regulations are disqualified from theprogram for a period of 12 months for the firstoffense, 24 months for the second offense,permanently for the third offense, and 10 years forreceiving duplicate assistance and/or Trafficking.Cost avoidance on SNAP cases is calculated basedon the average amount of food stamp standardsduring the overpayment period multiplied by thelength of the disqualification period.

Investigation OutcomesA referral was received from a Family CommunityResource Center (FCRC) requesting BOI toinvestigate a recipient who refused to comply withthe Division of Child Support Enforcement whenthe non-custodial parent was earning over $5,000per month and the recipient reported zero incomefor herself. The investigation revealed the recipientfailed to report her spouse, the children’s father andthe non-custodial parent, had been in the home andthey had both been gainfully employed. As a resultof the recipient knowingly hiding the truehousehold composition and total household income,a total SNAP overpayment of $20,121 wasidentified.2 The investigation was completed inMarch 2018, was processed by DHS Bureau ofCollections (BOC) in April 2018, and is currentlybeing recouped.

Upon review of a recipient eligibility referralreceived by OIG, a BOI investigation determinedthat the recipient did not report the presence of theresponsible relative, the father of recipient’schildren, living in the home. The responsiblerelative had resided in the home since 2010 and had

Bureau of Investigations – SNAP HighlightsReferrals received: 701Case reviewed completed: 1,482Identified Overpayment: $1.8 millionCost avoidance: $2.0 millionDisqualification Hearings Held: 849Disqualifications: 787Open/Active cases: 2,168Total Staff: 3Administrative Hearing Decisions Rendered: 453,451 of these decisions, or 99.6%, were found in favorof the OIG.

2 Overpayments were identified as follows: $4,715 for the period of 06/13-11/13, and $15,406 for the period of 02/16-03/18 totaling $20,121.

3 SNAP overpayments were identified as follows: $11,942 for the period of 01/11 - 10/14, and $7,354 for the period of 01/15 – 09/16, and $4,219 for the period of 01/17 – 12/17 totaling $23,515


Bureau of Investigationsinvestigation was completed in April 2018 andsubmitted to the FCRC. The FCRC calculated thatfor the period of November 2011 through March2018, the recipient received an overpayment of$59,547 in SNAP benefits. This case was referred toBOC. This case may be considered for criminalprosecution.

One successful criminal prosecution case resultedfrom a referral in which a BOI investigationconfirmed that a SNAP recipient failed to report herhusband had earned income while residing with therecipient and their children from July 2012 to

September 2014. The BOI investigator was able toplace the husband in the household through hisemployment records, state income taxes, postalverifications, school verifications, and IllinoisSecretary of State Records. The recipient’shusband’s own admission confirmed the findings.Per a sentencing order filed in Fulton County,Illinois on May 31, 2018, the recipient was chargedwith a Class A misdemeanor for theft. The Judgealso imposed $11,000 in restitution, and sentencedthe recipient to two years of probation and 60 daysin the Fulton County Jail.

The Welfare Abuse RecoveryProgram (WARP)Within BOI, WARP serves as the central fraudintake unit for the entire OIG. WARP processesfraud and abuse referrals received directly fromlocal DHS offices, alleging potential fraud byrecipients and providers. Referrals are also receivedby the general public via a hotline4, an online intakereferral form, as well as direct referrals from stateand federal agencies and law enforcement entities.

Warp HighlightsReferrals received: 22,438Staff: 5 and 2 Graduate Public Service Interns (GPSI)

WARP conducts thorough research on suspectedfraud referrals by accessing multiple databases froma variety of sources including, but not limited to,DHS, Secretary of State, Illinois State Police (ISP),DPH vital records, employment and unemploymenthistory. WARP takes multiple steps in gathering,reviewing, and analyzing information regarding thereferral and processes the referral in the OIG’s casetracking system. WARP ultimately determines howand where to route cases, based on the findings.Cases can be closed out due to lack of merit orinformation, or sent to BOI investigators for furtherreview and investigation. Cases can also be sent toFCRC for additional follow up, or sent to BOC toestablish a dollar amount and time frame for anoverpayment. When BOC receives a referral, they

respond to the OIG with the appropriateoverpayment amount.

In FY18, WARP received a total of 22,438allegations of potential fraud, waste and abuse.These inquiries were received through phone calls,internet, mail, and e-mail. Of these, 360 cases werereviewed and a total of $940,229 in SNAP andTANF overpayments were established.

Given the volume of fraud referrals received, thebacklog of pending investigations into allegations offraud remains large. All allegations of fraud againstrecipients are set up by WARP, researched andvetted through a variety of proprietary State andFederal databases, and routed to the Bureau ofInvestigations Supervisor, to assign to Investigators.Based on staff vetting and research, some referralscan be completed without an interview or field visit,based on current case information and electronicverification. Through a CMS Rapid Results project

4 1-844-ILFRAUD/ 1-844-453-7283 and https://www.illinois.gov/hfs/oig/pages/reportfraud.aspx


Recipient Program Overpayments

Recipient Program Total Overpayments EstablishedBOC Local Office SNAP $908,876BOC Local Office TANF $31,353Total: $940,229

Bureau of Investigations

an Executive I position was established for WARP. This position will expedite the process, eliminateunnecessary and unfounded referrals routed to BOI investigators and will save time and funding that otherwisewould have been spent on additional investigative staff and/or overtime. Once this position is filled, the newprocedure for researching and vetting incoming fraud allegations will be streamlined and more efficient.


Bureau ofMedicaid Integrity

Section

5


Bureau of Medicaid IntegrityAudits, LTC-ADI, Peer, Quality Control (QC)The Bureau of Medicaid Integrity (BMI) performscompliance audits, quality of care reviews andspecial project reviews of providers in addition toconducting Medicaid eligibility quality controlreviews and Long Term Care Asset Discoveryfunctions. The sections within the Bureau include:Audit, Peer Review, Long Term Care – AssetDiscovery Investigations (LTC-ADI) and QC.

AuditThe Audit Section of BMI conducts program integrityaudits on all provider types enrolled as a Medicaidprovider and receives reimbursement fromHealthcare and Family Services. The Audit Section isalso responsible for the oversight of the CertifiedPublic Accountant (CPA) vendors, the UniversalProgram Integrity Contractor (UPIC) and theRecovery Audit Contractor (RAC) program, asrequired by the Affordable Care Act (ACA).

The OIG performs pre-payment and post-paymentaudits, in order to ensure that the Department makesappropriate payments to providers, as well as toprevent and recover overpayments. Through theseaudits, the OIG ensures compliance with State andfederal law and Department policy. All Medicaidproviders, claims, and services are subject to audit.The OIG uses a number of factors in determining theselection of providers for audit, including, but notlimited to, data analysis; fraud and abuse trends;identified vulnerabilities of the Program; externalcomplaints of potential fraud or improper billing; and a provider’s category of risk.

In general, the OIG’s internal audits fall into thefollowing categories:

• Desk Audits involve audit findings based mostly on the use of data analytics and algorithms that electronically analyze specific billing and reimbursement data. The OIG verifies the data outcomes using applicable law, regulations, and policy.

HighlightsAudits Initiated: 856Audits Completed: 1,170Re-Audits: 4Total Overpayments Collected: $13.5 million

• Field Audits require a manual review of medical or other documentation by auditors. Field Audits also use data analytics, but require a more thorough verification process by qualified professionals.

• In-House Field Audits are mirrors to the same processes and procedures as a desk audit other than the fact that the auditor or team of auditor(s) conducts an on-site visit prior to the audit being commenced.

• Self-Audits involve audit findings based upon external and/or internal referrals or by internal OIG data analytics. Self-Audits require the provider to review all audit documents and schedules to determine agreement and/or disagreement with potential overpayment findings. A reconciliation process is implemented until all audit findings are validated and finalized.

• Self-Disclosure Reviews involve the identification of irregularity in the billing practices of a provider. In appropriate circumstances, the OIG requires a provider to conduct its own investigation and overpayment self-disclosure. The OIG will verify the overpayment amounts through data analytics and professional review. The Self-Disclosure Protocol Notice can be found at the following link:http://www.illinois.gov/hfs/oig/Documents/ProviderSelfDisclosureProtocol.pdf.

• Audit Sampling and Extrapolation may involve the use of sampling and extrapolation. Using statistical principles, the OIG selects a valid sample of the claims during the audit period in


Bureau of Medicaid Integrity question and audits the provider's records for only those claims. The OIG then calculates an overpayment amount by extrapolating the findings of the sample to the overall universe.

External Contract Vendor AuditorsCertified Public Accountant (CPA) Audits areperformed by three firms that currently assist theBMI Audit unit in performing financial audits ofLong Term Care Facilities. These audits areconducted on-site by the vendors and finalized bythe BMI Audit staff.

Recovery Audit Contractor Audits are requiredby Federal law. States are required to establishprograms to contract with Recovery AuditContractors (RAC) to audit payments to Medicaidproviders. The OIG uses RAC vendors tosupplement its efforts for all provider and audittypes. Payment to the RAC vendor is a statutorilymandated contingency fee based on theoverpayments.

Universal Program Integrity Contractor (UPIC)Audits utilize the OIG’s partnership with thefederal Centers for Medicaid and MedicareServices’ Center for Public Integrity (CPI). CPIoffers states the use of UPIC auditors, in order toperform targeted audits at no cost to the state.

In FY18, The Bureau’s Audit Section and theExternal Audit vendors conducted a total of1,170 audits on Medicaid providers to ensurecompliance with the Department policies. The AuditSection reviews various records and documentation,including patient records, billing documentation andfinancial records. Deficiencies noted because ofthese audits may result in the recoupment of anyidentified overpayments. The OIG collects theoverpayment in full or via installment paymentsreceived from the provider. In FY18, the totalamount of Overpayments collected was $13.5million which is comprised over overpaymentsidentified in FY18 and installment paymentsreceived from prior year audits.

FY18 Audit Initiatives• Audit Package Implementation The Audit section has implemented new audit package templates that are to be used for every provider type audited and every type of audit performed. These new packages are streamlined to bring forth efficiency, effectiveness and transparency of the audits to the provider(s). The audit packages will include all legal authorities, policies and procedures in addition to detailed description of the audit findings. With the implementation of these new audit packages, the audit conferences have run more efficiently and effectively and have resulted in fewer appeals from the providers on the audit finding(s).

• Electronic Health Record (EHR) Audits The State of Illinois Department of Healthcare and Family Services is to comply with the provisions of the Health Information Technology for Economic and Clinical Health (HITECH Act), which was enacted under the American Recovery and Reinvestment Act of 2009 (Recovery Act). HFS-OIG is mandated to implement an annual Electronic Health Information Technology Auditing Plan to ensure that all Eligible Professionals (EPs) and Eligible Hospitals (EHs); successfully demonstrate meaningful use of certified EHR technology. The OIG performs audits of a random sample of all EP/EH providers to ensure that providers who have attested to the adoption, implementation, or upgrade (AIU) of certified EHR technology have the adequate documentation to support the AIU efforts and to ensure that appropriate federal incentive payments for EHR implementation have been made to these provider(s). In FY18, the OIG performed 75 audits of EHR eligible professionals for AIU certification. All provider(s) during this audit period attested and were certified as meeting federal AIU requirements.

In FY19, the OIG will continue efforts to audit EHR providers for AIU requirements in addition to beginning efforts to audit eligible


Bureau of Medicaid Integrity professionals and eligible hospitals for Meaningful Use (MU) requirements. The OIG is planning on conducting audits on at least 10% of all EP and EH providers and 100% of providers who are determined to be High-risk providers (as determined by risk scores defined in the HFS-OIG EHR Audit Plan).

• Hospital Global Billing Payments In FY18, the OIG performed 112 audits to identify and potentially recover $800,000 in overpayments made by the Department to hospitals who billed the professional component of a laboratory or X-ray service in addition to a physician billing the professional component for the same recipient on the same date of service with the same procedure code. Hospitals, as a part of this initiative, have made successful efforts to fix their internal billing systems to ensure that these global billings do not occur in the future. The OIG is also working with these hospitals in receiving global billing self- disclosures to remedy this duplicate payment situation.

Importantly, beyond recovering overpayments, the Global Billing Initiative established a positive and transparent process that allows the hospitals to review their own internal billing processes. Further, as a result of the self-audit, several hospitals implemented changes to their internal billing processes to prevent overpayments from occurring in the future. As a result, the Global Billing Initiative process has resulted in an estimated cost-avoidance amount of approximately $500,000 for FY18.

• Prevent Payment for Deceased Recipients In FY18, the OIG continued initiatives focused on areas of identified Program vulnerabilities. This includes preventing payments and recovering overpayments made for deceased recipients. In FY18, the OIG performed 62 audits to identify and recover $63,000 in overpayments made by the Department for deceased Medicaid recipients.

Further, the OIG conducts outreach to provide education on healthcare fraud laws and Department regulations pertaining to the improper billing for payments for deceased recipients. When appropriate and when the audit provides evidence of improper conduct by a provider, the OIG has invoked its authority to sanction providers through payment suspensions and terminations from participation in the Medicaid Program. Importantly, as part of the OIG evaluation of these cases, OIG identifies instances of credible allegations of fraud and appropriately refers the cases to law enforcement partners for further criminal investigation.

• Transportation Audits In FY18, the OIG performed 254 audits to identify and recover $167,307 in overpayments made by the Department for transportation providers who billed for services during an inpatient stay not covered by HFS policy, duplicate transportation billings and loaded mileage billings. Loaded mileage is where there is more than one recipient in the same vehicle at the same time/trip and the provider bills HFS for both recipients. According to HFS policy, the transportation provider can only bill for one recipient therefore the billings for the additional recipient is a loaded mileage overpayment. OIG continues to run this algorithm audit on a yearly basis and is currently working with transportation providers to ensure HFS policies are followed and these types of erroneous billings do not occur in future billings to the Department.

The following charts identify the number of auditsand the amount of overpayments identified andcollected in FY18 by provider type and by audittype.


Bureau of Medicaid Integrity

These figures include adjustments made to receivables when required.





FY19 Audit InitiativesIn addition to the continuation of the FY18 auditinitiatives, the following will be additional OIGaudit initiatives for FY19:

• Behavioral Health, Laboratories and Hospice Audits The Audit Section will be working with the Universal Program Integrity Contractor (UPIC) to identify overpayments made to providers of Behavioral Health, Laboratories and Hospice services. These audits will be expansive field audits that will be conducted in a joint effort to combat fraud, waste and abuse within these provider types.

• Durable Medical Equipment Audits The Audit Section will be conducting audits on Durable Medical Equipment (DME) providers to identify issues of non-compliance with HFS

LTC-ADI HighlightsApplications processed: 2,407 applicationsTotal savings of $140,730,671ROI of $42.80 for every $1 spent

policy and procedures. The audits will be focusing on services provided that are direct-shipped to the recipients, wheelchair/wheelchair supplies, diabetic supplies and other types of services.

• Expansion of Long-Term Care Audits The Audit Section, in conjunction with the CPA vendors and the RAC vendor, will be conducting financial audits on a wider population of LTC facilities across the State of Illinois.

• MCO Contract Compliance Audits The Audit Section will be working closely with the Managed Care Organizations’ Special Investigative Units (SIUs) and the Bureau of Managed Care to perform Contract Compliance Audits. These audits will consist of identifying program integrity issues and discrepancies within the MCO contracts in regards to services being provided to the enrollees and what the deliverables are within each contract.

LTC-ADIThe Department is responsible for the MedicaidLong-Term Care (LTC) Program for approximately55,000 eligible Illinois residents in over 738nursing facilities. Illinois residents can apply to theLTC Program to have the State pay for their long-term nursing home services. Individuals are eligiblefor such assistance if they have less than $2,000 inresources and have not made unallowable transfersin the last five years.

While all states are required to perform assettransfer look-back reviews pursuant to the DeficitReduction Act of 2005, Illinois is the only state inthe nation with a dedicated Long Term Care-AssetDiscovery Investigations (LTC-ADI) Unit of thissize. This is also the only Unit to have a reviewlook-back period of five years on asset reviews. Assuch, Inspector General Hart presents nationallyabout the successes of the Unit, its processes, andits cost savings to the tax payers of the state ofIllinois. The unit is responsible for ensuring that

Long Term Care (LTC) residents requestingcoverage for LTC services are eligible and incompliance with federal and state regulations beforethey receive State assistance. The goal of the unit isto ensure that individuals applying for LTC servicesdo not have excess resources or unallowabletransfers of resources which would allow them topay for their own nursing home care. By preventingimproper conduct related to eligibility, the LTC-Asset Discovery Investigations Unit ensuresprogram funds go to qualified applicants who haveno other means to pay for their own care.

Applications are referred to the OIG from the DHSFamily Community Resource Centers (FCRCs) as aresult of meeting specific criteria. LTC-ADI



Analysts (Analysts) complete reviews of financialrecords and applicant information up to five yearsfrom the date of the application for benefits.Directives are made and then provided back to theFCRCs to allow DHS to send out notices advisingthe applicants of their eligibility for the program.

What are excess resources?Excess resources are any asset or resource that onehas available to use as payment for the cost of theircare, over and above the $2,000 allowed per statute.For example, if an individual has an investmentaccount, it should be used to pay for their care;therefore this investment account would be anexcess resource. If an individual does have excessresources, they will be required to spend down thevalue of the resources before the State of Illinoiswill pay for their care.

Common statements made by applicants when theAnalysts determine they have excess resources:

“I have to use my investment account to pay for mycare?”

“I didn’t think that the farm ground would have tobe used for my care.”

“I thought that since the property was in a trust thatI protected it.”

FY18 Case Examples ofExcess Resources:During this investigation, an Analyst found that theapplicant applied for benefits with minimalinformation reported on the application. Uponthorough review of the application, the Analyst’sinvestigation also uncovered two Charles Schwabinvestment accounts and a property held in theapplicant’s revocable trust. The assets held in therevocable trust are available to the applicant and theapplicant will be required to spend down theseexcess resources, totaling $211,020 before the statewill pay for long term care benefits.

In this case, an Analyst investigated an applicationfor a 22 year old who had been involved in anaccident which left him visually impaired. Theapplicant had received a settlement as a result of theaccident and entrusted their mother with the funds.The applicant’s mother used the funds to pay off herpersonal credit card bills, install a pool in herbackyard, and remodel her house. These purchaseswere made after the applicant’s mother admittedhim to the LTC facility. The applicant’s mother waspenalized $97,032 for inappropriate spending of theapplicant’s funds, which should have been used topay for her child’s care.


Bureau of Medicaid IntegrityDuring this investigation, an Analyst found that theapplicant applied for benefits with minimalinformation reported on the application. Upon furtherreview of the application and documents, theAnalyst discovered that the applicant had made largemonthly payments to an insurance company. Whenthe Analyst received additional information, it wasproven that the applicant had a life insurance policywith a face value of $650,000 and a cash value of$445,910. The Analyst also uncovered informationshowing that the applicant had a house available tothem. In total, the amount of excess resourcesavailable to this applicant was $736,885.

During this case, an Analyst found that an applicantsold their house and put the funds into a RevocableLiving Trust. The family thought this would protectthe funds from having to be used to pay for theirnursing home care. After legal review, it wasdetermined that the assets in the revocable trust wereavailable to the applicant. In addition, the analystalso uncovered interest income in the applicant’s taxreturns, payable from another bank not disclosed bythe applicant. It was discovered that the applicantheld a Certificate of Deposit (CD) and an IndividualRetirement Account (IRA) with another bank. Beforethe Department will pay for benefits, the applicantwill be required to spend down the $113,000 ofresources that the applicant has available to use.

What is an unallowabletransfer?An unallowable transfer is a transfer of an asset or aresource prior to applying for benefits. These typesof transfers are a common tactic of concealing assets.For example, if an individual owns a property andtransfers it to a relative prior to applying for LTCbenefits, this would be an unallowable transfer. If anunallowable transfer occurs, a penalty period will beimposed for the applicant for attempting to divertassets. A penalty period is the period of time that theState will not pay for long term care benefits to theapplicant. The length of the penalty period iscalculated by the dollar amount of the penalty and

divided by the private pay rate, resulting totalmonths of the penalty.

Common statements made by applicants when theAnalysts determine they have made unallowabletransfers:

“…But the Internal Revenue Service (IRS) told me itwas okay to gift $14,000.”

“My mom can only keep $2,000, so I put the rest ofher money in a ‘special account.’”

“….But my mom really wanted me to have it.”

“….But that is my inheritance.”

FY18 Case Examples ofAsset Concealment/Unallowable Transfers:During a review of an application for long-termcare, an Analyst uncovered that an applicant soldtheir home and used the proceeds, $150,515, topurchase another home just prior to applying forLTC benefits. The applicant put the new property inthe name of the applicant’s son. A penalty wasassessed for the transfer of assets. The case wasappealed; however the Bureau of AdministrativeHearings (BAH) upheld the Department’s decision.

During a review, an Analyst uncovereddocumentation citing that the parents of anapplicant created an irrevocable trust, containing105 acres of farm ground and two homes. Afterlegal review, it was determined that the applicanthad access to the income and principal, thereforecould afford to pay for their own long-term care.The total amount of assets determined available tothe applicant totaled $1,191,000. The Department’sdecision was appealed by the applicant; BAHupheld the Department’s decision.

Upon review of bank statements for an application,it became obvious to the Analyst that the applicantand the applicant’s spouse were frequently giftingmoney to family members prior to filing the


Bureau of Medicaid Integrityapplication for LTC benefits. The applicant gifted$14,000 to each of the applicant’s five children, andalso made gifts to the applicant’s grandchildren.Additionally, one of the children opened a businesswith loans given to them by the applicant. The totalpenalty applied for this case was $174,800.

Upon review of mortgage documents for anapplication, an Analyst determined that theapplicant took out a reverse mortgage for $79,683prior to their admission to the nursing home, andgave funds to applicant’s daughter, who was alsothe power of attorney. In addition to thisunallowable transfer, the Analyst uncovered that thedaughter was writing substantial weekly checks toherself from the applicants account. The totalpenalty for this case was $110,682.

A review performed by an Analyst uncoveredinformation showing that an applicant transferredmoney to her daughter several times a month forcaregiving. Further inquiries performed by theAnalyst discovered that there was no contract forthis agreement and the applicant’s daughter did nothave any evidence to supply that the applicant’sdaughter cared for the applicant. Findings showedthat in over just a few years, the applicanttransferred $96,534 to her daughter. A penalty wasaccessed for the entire amount of the transfer.

ProcessesThe LTC-ADI Unit assumes responsibility for allappeals during the appeal process, as well as for allspend down and penalty issues that have beendetermined by the unit. New for FY18 was thehiring of legal counsel for the LTC-ADI Unit. Thisattorney coordinates and facilitates all pre-appealconferences, and represents the OIG in litigationappeal cases involving spenddowns and penalties.

The LTC-ADI Unit assumes the additionalresponsibility of allotting Hardship Waivers toindividuals whose welfare might be irreparablyaffected by the application of a penalty. HardshipWaivers act to waive the penalty, either partially orentirely, if it is determined by a committee within

the Unit that conditions related to hardship are met.The individual receiving the waiver is responsiblefor submitting evidence that proves hardship exists.

In the past year, the State has been sued by severalnursing home corporations due to the lengthy delayin the application approval process. These lawsuitsresulted in the Department of Human Services’expediting the application processes on their end.However, this change in process will eventuallyaffect the LTC-ADI Unit, affecting the volume ofapplications received for review. LTC-ADI isproactively working on researching new and revisedworkflow methods to be prepared. The processingof the long term care benefits applications has beena “hot topic” for years; however, the process iscumbersome for both the applicants and theAnalysts. Reviews are often lengthy and can extendfor many months, as applicants have to spend timeobtaining the necessary documentation before theAnalysts can review the documents.

Senate Bill #2913 was passed by the GeneralAssembly and signed into law on August 2, 2018,which streamlined processing of non-complexapplications; however this did not affect the LTC-ADI Unit’s processes.

Currently, the LTC-ADI Unit consists of 24 staffmembers, including: a manager, clerical staff,analysts, supervisors, and an attorney. The clericalstaff research and obtain documents, such asapplications or verifications of assets, from theIntegrated Eligibility System (IES). Once thedocuments have been collected, they are provided tothe Analysts for examination to determine if anyresources are available to the applicant to spendtowards their care and if any unallowable transfersof resources occurred in the prior five years. Oftentimes, the Analysts must request additionalinformation from the applicants, which can causesignificant delay in the processing of theapplications. The analysts are responsible forcompleting a directive for each case which will besent to the DHS office for processing. Supervisorsreview the work of the analysts, train new staff, and



Peer Review HighlightsPeer Reviews Completed: 43Cases in Review: 68Cases Pending Assignment for Review: 89Providers Terminated or Suspended Resulting from a Peer Review: 3

assist with the hearing process. The LTC-ADI’sattorney is responsible for providing legal counselon all legal issues such as trusts, wills, divorce,separation, spousal refusal, and spousal transfer.

As stated above, the LTC-ADI Unit often faceslegal issues in the public eye. The nature of thereview process itself is lengthy. Any delays in theprocess of applicants providing resources anddocumentation to the Unit further exasperates thedelay in processing of the applications. Theapplication and financial reviews are laborious andtedious. The average amount of time it takes foreach case to be reviewed by an Analyst is 8-10hours. The LTC-ADI unit regularly works overtimein order to minimize delays in processing. TheOIG’s headcount is very limited and staff turnoverhas also been an issue for LTC-ADI. Manyalternative workflow processes have been utilized toreduce the backlog of cases and create efficiencies.The Unit has the most successful process in place,for both efficiency and accuracy, given the 250 newcases, which the Unit receives each month.

Peer ReviewThe Peer Review Section conducts quality of carereviews and monitors utilization of servicesrendered to Medicaid recipients from recordssubmitted by a provider/applicant. Quality of careconcerns are summarized in the categories of risk of

harm, medically unnecessary care or care in excessof needs, and grossly inferior quality of care. Riskof harm is identified when there is a risk to thepatient that outweighs the potential benefit of theservice. Medically unnecessary care or care inexcess of needs is identified when the care providedto the patient is not medically necessary and/or inexcess of the patient’s needs. Grossly inferiorquality of care is identified when “flagrantly badcare” is provided to a patient. Peer Review conductsreviews of physicians, dentists, podiatrists,audiologists, chiropractors, nurse practitioners, andoptometrists. Peer review cases can originate fromhotline/complaints; referral from the ProviderAnalysis Unit, Recipient Restriction Unit, AuditUnit or other agencies such as the IllinoisDepartment of Financial Professional Regulation,State Police, or Public Health. Some cases mayalso involve providers that have been reviewedpreviously and quality of care concerns wereidentified but were not serious enough to terminate

the provider. The providerwill be reviewed again to seeif the concerns have beenrectified. If a provider wasterminated, suspended, orwithdrew from the Programand submitted his/herenrollment application inIMPACT, a reinstatementcase will be created and sentto Peer Review to conduct aquality of care review. If apotential provider submittedhis/her application inIMPACT, but had a red flag

such as a discipline on his/her license, an enhancedenrollment case will be created and sent to PeerReview to conduct a quality of care review.

The Peer Review staff reviewer may go to theprovider’s office to obtain the recipient records ormay request the provider send the office records tothe Department. A written report documenting thequality of care concerns and the recommendationsis subsequently completed by the reviewer. Possiblerecommendations may include case closure with noconcerns; case closure with minor deficienciesidentified and sending a letter to the provideridentifying these minor concerns; or a referral to aconsultant for further review of potentially seriousconcerns. The consultant will review the officerecords and will submit a written report to theDepartment identifying quality of care concernsalong with a recommendation to the Department.The consultant may recommend that a letter be sentto the provider outlining quality of care concernsand recommendations when minor concerns areidentified. If the consultant has identified moreserious quality of care concerns the Department willrequest that the provider attend a Medical QualityReview Committee (MQRC) meeting to discuss thecare provided and attempt to clarify or discuss theconcerns identified with the provider. The MQRCcommittee will consist of two to three departmentalconsultants of like specialty. If the provider is boardcertified, at least one committee member must be


Bureau of Medicaid Integrityboard certified in the same branch of medicine. TheMQRC makes a recommendation to the Departmentprior to the conclusion of the meeting after theprovider is dismissed. The committee mayrecommend that the provider be sent a letteridentifying concerns that the provider should correctin his/her practice; suspension; corporate integrityagreement in lieu of termination; termination; denialof reinstatement; denial of enrollment; or referral tothe Audit Section if potential compliance issues aresuspected. In addition, a referral may be sent to theDepartment of Public Health and/or the Departmentof Financial and Professional Regulation for relatedregulatory actions.

Total Cases Open and Assigned 68 Full Peer Review 58 Modified Peer Review 2 Reinstatement Review 4 Enhanced Enrollment Review 4

Total Cases on Tickler or Needing Assigned 89 Full Peer Review 86 Modified Peer Review 2 Reinstatement Review 0 Enhanced Enrollment Review 1



QC (Quality Control)Federally Mandated ReviewsSince the early 1980s, the State has been mandatedby the Federal Centers for Medicare and MedicareServices (CMS), to conduct reviews of eligibilitydeterminations as set forth in 42 CFR 431 SubpartP. At the onset of this mandate, the reviews wereconducted by the Department of Public Aid (DPA)and consisted of all three federal programs – Aid toFamilies with Dependent Children (AFDC), FoodStamps and Medicaid. Currently HFS (formallyDPA) conducts the Medicaid reviews (MedicaidEligibility Quality Control – MEQC). DHS isresponsible for the Supplemental NutritionalAssistance Program (SNAP) and AFDC qualitycontrol reviews.1

Medicaid reviews performed from the 1980s to theearly 1990s were considered traditional reviews,meaning they were standardized reviews of arandom sample of all Medicaid eligibilitydeterminations in the universe. In the early 1990s,CMS offered the States the option of conductingreviews targeted at “troubled “areas. The OIG tookadvantage of this offer and began conductingreviews of “troubled” areas as identified throughprevious traditional reviews. Two current OIGprograms were created as a result of these reviews –the New Provider Verification process that visits,surveys, investigates and monitors high riskproviders and the Long Term Care Asset DiscoveryInvestigations (LTC-ADI) – an investigation ofasset transfers prior to the approval for LTCservices. LTC-ADI has resulted in hundredsof millions of savings to the State.

In 2012, QC was mandated by CMS to conducteligibility reviews for the Payment Error RateMeasurement (PERM) program as set forth in 42CFR 431 Subpart Q. These reviews occur every

three years and are conducted by all states. They aredesigned to develop a national payment error rate,as well as correct errors identified and minimizetheir reoccurrence through a Corrective Action Plan(CAP). The CAP requires the coordination of boththe Department and the Department of HumanServices (DHS), and is monitored by CMS forcompletion. The OIG works with CMS contractorsto identify the universe, finalize the sample, gathercase records and review the cases.

During FY18, QC performed the followingactivities:

• 250 MEQC eligibility reviews and 265 test cases to assess both the Manually Adjusted Gross Income (MAGI) budgeting process as well as the State’s new Integrated Eligibility System (IES).

• 903 MEQC eligibility reviews of Medicare eligible recipients to ensure they were covered under the State’s Aid to the Aged, Blind and Disabled (AABD) program and not incorrectly placed into the Affordable Care Act (ACA) population as federal matching funds are higher for the ACA program.

• 6,143 contacts to recipients to verify the receipt of services as mandated by 42 CFR 455.20 and 433.116.

• 11 PERM eligibility reviews for the review year (RY) 2019. QC continues to work with the CMS contractor to finish the review of the remaining 967 cases.

• Creation of the MEQC design for 2019 as required by CMS to determine what types of cases will be reviewed throughout 2019 and reported on by August 2020.

1 The AFDC program changed to Temporary Assistance to Needy Families (TANF) in 1996.



The Office ofCounsel to theInspector General

Section

6

HighlightsHearings InitiatedTermination Cases: 132Term/Recoup Cases: 49Recoupment Cases: 121

Final ActionsTermination Cases: 110Term/Recoup Cases: 36Voluntary Withdrawals: 3Recoupment Cases: 68Barrment Cases: 3 1

Reinstatement ActionsDenied Applications: 2Reinstatement Cases: 5Disenrollment Cases: 17

Voluntary Withdrawal Cases: 5Payment Withholds: 2 29

Total Medical Provider Sanction DollarsFunds Put to Better Use: $1,515,719 3


The Office of Counsel to the Inspector GeneralThe Office of Counsel to the Inspector General(OCIG) provides general legal services to the OIG,rendering advice and opinions on the Departmentprograms and operations, as well as providing alllegal support for the OIG’s internal operations.OCIG represents the OIG in administrative fraudand abuse cases involving Department programs. Inconnection with these cases, OCIG also negotiatesand monitors corporate integrity agreementsbetween providers and the Department. OCIGrenders program guidance to the OIG Bureaus, aswell as to the health care industry as a whole,concerning healthcare statutes and other OIGenforcement activities.

OCIG drafts and monitors legislation andadministrative rulemaking that impacts fraud,waste, abuse and the overall integrity of the MedicalAssistance Program. OCIG is also responsible forthe enforcement of provider sanctions, and

represents the Department in provider recoveryactions; actions seeking the termination, suspension,or denial of a provider’s Program eligibility; stateincome tax delinquency cases; civil remedies torecover unauthorized use of medical assistance; andlegal determinations affecting recipient eligibilityfor the OIG’s Long Term Care-Asset DiscoveryInvestigations. Finally, OCIG assists with responses

1 Includes federal exclusion cases.

2 This number includes payment withholds imposed under all provisions under the jurisdiction of the OIG, including noncompliance with Department requests.

3 Includes cost savings $434,697 and $1,081,022 rejected billings.

to Freedom of Information Act (FOIA) andsubpoena requests.

OCIG terminated, denied,suspended or excluded over114 providers, individuals andentities from participation in theIllinois Medical AssistanceProgram.

OCIG terminated 88 PersonalAssistant Providers (PA) inFY18.


The Office of Counsel to the Inspector GeneralIn FY18, OCIG terminated, denied, suspended orexcluded over 114 providers, individuals andentities from participation in the Illinois MedicalAssistance Program. Searchable exclusions lists areavailable on the OIG Website. Providers and ownerswho are terminated or debarred from the Programare restricted from participating in the Program andmay not be employed by any entity receivingpayment by a Federal or State health care program.

OCIG hires four new attorneysIn FY18, OIG bolstered its mission of preventingfraud, waste, and abuse by hiring four newattorneys. These attorneys each possess a wealth ofknowledge and experience with administrative law.Three of the attorneys are operating from theChicago office and assist with prosecuting medicalprovider cases. One attorney is operating in theSpringfield office and assists with Long Term Carerecipient eligibility issues and Freedom ofInformation Act (FOIA) requests. The addition ofthe new staff will greatly assist in processingbacklogged cases, while also ensuring OIG remainsin compliance with the due process rights ofproviders.

OCIG fights to keepconvicts out of the IllinoisMedical AssistanceProgramA Final Administrative Decision (FAD) was issued,which adopted and upheld an administrative law

OCIG investigated and

processed 71 new post

mortem recoupment cases

with approximately 10 to 20

cases being filed every month.

judge’s Recommended Decision to allow a PersonalAssistant (PA), who had previously been criminallyconvicted of murder, to remain employed as part ofthe Illinois Medical Assistance Program. HFS-OIGfiled Exceptions contending the RecommendedDecision was incorrectly decided as a matter of law,a violation of the Illinois SMART ACT, and directlycontrary to HFS-OIG’s Program Integrity statutorymandate. The Recommended Decision improperlyimposed an additional legal requirement on HFS-OIG to prove a "risk of harm" to the PersonalAssistant and Medicaid Recipient relationship,despite the plain language of the applicable IllinoisAdministrative Code governing medical providertermination in such cases containing no suchrequirement. HFS-OIG maintains the FADincorrectly adopted the Recommended Decision andthat the provider should have been terminated.

Administrative issueshamper OCIG’s ability toprosecute casesThe ability to file, schedule, and hear additionalmedical provider hearing cases is limited by thereduction in personnel, including attorneys,investigators, and staff members within the Officeof the Inspector General. This is in addition to areduction, as well as changes in Administrative LawJudge personnel and ancillary staff membersassigned to hear and handle medical providerhearing cases. The ability to process the backlog ofcases in a timely manner and schedule them for anadministrative hearing is also constrained, in part,by the existence of a Bureau of AdministrativeHearings Standing Order. This order limits the filingof all new cases to a maximum of 50 new cases permonth. HFS-OIG is cooperatively working with theBureau of Administrative Hearings to file and hearmore cases.


The Office of Counsel to the Inspector General

FY18 Highlight Cases Doctor terminated basedon $2.9 million health carefraud schemeDr. Eguert Nagaj was terminated as a result of hiscriminal conviction for a $2.9 million health carefraud scheme. While the doctor lost his license topractice medicine because of his conviction, thedoctor’s termination from the Illinois MedicalAssistance Program was effective from the date hewas convicted.

OCIG obtains $31Kjudgment againsttransportation providerVee Transportation violated numerous Departmentpolicies, rules, and HFS Handbook provisionsduring a BMI Audit review. Violations related to thedelivery of transportation services, including billingduring an inpatient stay, loaded mileage, andmultiple billings. The HFS Director’s FAD affirmedan administrative law judge’s recommendeddecision, which issued a default order against theprovider and upheld the Department’s right to anoverpayment recovery of $31,129.


AcronymsAABD Aid to Aged Blind or DisabledACA Affordable Health CareAFDC Aid to Families with Dependent ChildrenAG Illinois Attorney GeneralAIU Adoption, Implementation, or UpgradeALJ Administrative Law JudgeBAH Bureau of Administrative HearingsBFST Bureau of Fraud Science and TechnologyBIA Bureau of Internal AffairsBMC Bureau of Managed CareBMI Bureau of Medicaid IntegrityBOC Bureau of CollectionsBOI Bureau of InvestigationCAP Corrective Action PlanCAS Central Analysis ServicesCASE Case Administrative System EnquiryCD Certificate of DepositCFR Code of Federal RegulationsCHIP Children’s Health Insurance ProgramCMS Central Management ServicesCPA Certified Public AccountantCPI Center for Public IntegrityCPIP Certified Program Integrity ProfessionalsDHS Department of Human ServicesDME Durable Medical EquipmentDNA Dynamic Network AnalysisDOIT Department of Innovation and TechnologyDOJ Department Of JusticeDPA Department of Public AidEDW Enterprise Data WarehouseEH Eligible HospitalEHR Electronic Health RecordsEP Eligible Professional

FAD Final Administrative DecisionFAE Fraud Abuse ExecutiveFBI Federal Bureau of InvestigationFCRC Family Community Resource CentersFFP Federal Financial ParticipationFFS Fee for ServiceFOIA Freedom of Information ActFQHC Federal Qualified Health CenterFST Fraud Science TeamFY Fiscal YearGPSI Graduate Public Service InternEHR Electronic Health RecordsHFPP Healthcare Fraud Prevention PartnershipHFS Healthcare and Family ServicesHHA Home Health AgenciesHHS Department of Health and Human ServicesHITECH Health Information Technology for Economic and Clinical HealthHSP Home Services ProgramICF-MI Intermediate Care Facility- Mental IllnessICF-MR Intermediate Care Facility- Mentally RetardedIDFPR Illinois Department of Financial and Professional RegulationIDPH Illinois Department of Public HealthIES Integrated Eligibility SystemILCS Illinois Compiled StatutesIMPACT Illinois Medicaid Program Advanced Cloud TechnologyIOC Illinois Office of the ComptrollerIP Individual Provider aka Personal AssistantIRA Individual Retirement AccountIRS Internal Revenue Service


Acronyms

ISP Illinois State PoliceLTC Long Term CareLTC-ADI Long Term Care- Asset Discovery InvestigationsMAC Medical Assistance ConsultantMAGI Manually Adjusted Gross IncomeMCO Managed Care OrganizationMEQC Medicaid Eligibility Quality ControlMFCU Medicaid Fraud Control UnitMMAI Medicare-Medicaid Alignment InitiativeMME Average daily morphine milligram equivalent doseMMIS Medicaid Management Information SystemsMPIS Medicaid Program Integrity SpotlightMQRC Medical Quality Review CommitteeMRA Management, Research, and AnalysisMU Meaningful UseNAC/MII National Advocacy Centers Medicaid Integrity InstituteNAMFCU National Association of Medicaid Fraud Control UnitNAMPI National Association for Medicaid Program IntegrityNEMT Non-Emergency Medical TransportationNHCAA National Healthcare Anti-Fraud AssociationNPI National provider IdentifierNPV New Provider VerificationNRC Narrative Review CommitteeOCIG Office of Counsel to the Inspector GeneralOIG Office of Inspector GeneralPA Personal AssistantPAU Provider Analysis UnitPCS Personal Care Services

PEER Peer Review Unit of Bureau of Medicaid IntegrityPERM Payment Error Rate MeasurementPES Provider Enrollment ServicesPI Program IntegrityPMP Prescription Monitoring ProgramPRAS Provider and Recipient Analysis SectionPSA Public Service AdministratorQC Quality Control reviews,RAC Recovery Audit ContractorRAU Recipient Analysis UnitRIN Recipient Identification NumberROI Return On InvestmentRPY Representative PayeeRRP Recipient Restriction ProgramRVP Recipient Verification ProcedureSAS Statistical Analysis SystemSIU Special Investigative UnitSMART Save Medicaid Access & Resources Together (Act)SNAP Supplemental Nutritional Assistance ProgramSSA Social Security AdministrationSSI Supplemental Security IncomeTANF Temporary Assistance to Needy FamiliesTMU Technology Management UnitUPIC Universal Program Integrity ContractorUSDOJ United States Department Of JusticeWARP Welfare Abuse Recovery ProgramXIM Xanalys Investigation Management


OIG Statutory MandateThe OIG is authorized by 305 ILCS 5/12-13.1. Bystatute, the Inspector General reports to theGovernor (305 ILCS 5/12-13.1(a)). The OIGstatutory mandates are “to prevent, detect, andeliminate fraud, waste, abuse, mismanagement, andmisconduct.” The OIG must comply with a varietyof charges set out by 305 ILCS 5/12-13.1, includingthe following Program Integrity requirements forthe Medical Assistance Program:

• Audits of enrolled Medical Assistance Providers• Monitoring of quality assurance programs• Quality control measurements of any program administered by the Department• Administrative actions against Medical providers or contractors• Serve as primary liaison with law enforcement• Report all sanctions taken against vendors, contractors, and medical providers• Public assistance fraud investigations

In addition to the Medical Assistance ProgramIntegrity components, the OIG has several otherduties:

• Employee and contractor misconduct investigations• Fraudulent and intentional misconduct investigations committed by clients• Pursue hearings held against professional licenses of delinquent child support obligors• Prepare an annual report detailing OIG’s activities over the past year

Federal Mandates andProgram ParticipationThe OIG is also responsible for Program Integrityfunctions mandated under federal law, including:

• Medicaid fraud detection and investigation program (42 CFR 455)• CHIP fraud detection and investigation program (42 CFR 457)• Statewide Surveillance and Utilization Control Subsystem (SURS), which is part of the Medicaid Management Information System (MMIS) (42 CFR 456)• Lock-in of recipients who over-utilize Medicaid services and Lock-out of providers (42 CFR 431)• Client fraud investigations (42 CFR 235)• Food Stamp program investigations (7 CFR 273)• Medicaid Eligibility Quality Control (MEQC) program (42 CFR 431)• Fraud and utilization claim post-payment reviews (42 CFR 447)


Appendix

Refill Too SoonA new Pharmacy Benefit Management System(PBMS) went live in April 2017. In this system,only payable claims are priced; therefore, OIG isunable to calculate the dollars associated with anyclaims that would be subject to a Refill Too Soon(RTS) edit. With the advent of HealthChoice Illinoisand the expansion of managed care in the IllinoisMedicaid system, the Managed Care Organizations(MCO) maintain their own billing policiesregarding pharmaceuticals. The OIG suggests thatthis statutory requirement needs to be addressed andmodified or eliminated for these reasons.

Aggregate ProviderBilling/PaymentInformationData showing billing and payment information byprovider type and at various earning or paymentlevels can be accessed under the heading of 2018Annual Report OIG’s Website. The information,required by Public Act 88-554, is by provider typebecause the rates of payment vary considerably.

https://www.illinois.gov/hfs/oig/Pages/AnnualReports.aspx

2200 Churchill Road, A-1Springfield, Illinois 62702

217-524-6119

401 S. ClintonChicago, Illinois 60607

312-793-2481

https://www.illinois.gov/hfs/oig

Welfare/Medicaid Fraud Hotline1-844-ILFRAUD (453-7283)

Printed by the Authority of the State of Illinois

12/18 . 250 c . IOCI19-0299

OFFICE OF INSPECTOR GENERALIllinois Department of Healthcare and Family Services