U.S. Department of Health and Human Services Met Many Requirements of the Improper Payments Information Act of 2002 but Did Not Fully Comply for Fiscal Year 2016

The Office of Inspector General (OIG) must review the Department of Health and Human Services (HHS) compliance with the Improper Payments Information Act of 2002 (IPIA; P.L. No. 107-300) as amended by the Improper Payments Elimination and Recovery Act of 2010 (P.L. No. 111-204) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA; P.L. No. 112-248). Ernst & Young (EY), LLP, under its contract with the HHS OIG, audited the fiscal year 2016 HHS improper payment information reported in the Agency Financial Report (AFR) to determine compliance with IPIA and related guidance from the Office of Management and Budget (OMB).

EY determined HHS met many requirements but did not fully comply with IPIA. Among the items required for compliance with IPIA, EY determined HHS published the AFR for fiscal year (FY) 2016, conducted risk assessments for 22 programs deemed not susceptible to improper payments and determined the programs were not at risk for them, and published corrective action plans for 7 of the 8 programs OMB deemed susceptible to significant improper payments and all 5 programs deemed susceptible to significant improper payment under the Disaster Relief Appropriations Act (DRAA) (P.L. No. 113-2) that had not expended all funds by FY 2016. EY also determined that HHS published and met annual reduction targets for four of the seven programs for which it reported reduction targets in the FY 2015 AFR and reported an improper payment rate of less than 10 percent for five of the eight programs OMB deemed susceptible to significant improper payments and all five programs under DRAA that had not expended all funds by FY 2016.

EY concluded that HHS did not comply with several IPIA requirements. EY found HHS did not report an improper payment estimate for the Temporary Assistance for Needy Families program. EY also determined HHS did not achieve an improper payment rate of less than 10 percent for the Medicare Fee-for-Service and Medicaid programs; did not meet improper-payment-rate reduction targets for the Medicare Advantage program, the Children's Health Insurance Program, and the Foster Care program; and did not conduct recovery audits for the Medicare Advantage program.