South Carolina Medicaid Fraud Control Unit: 2020 Inspection

WHY WE DID THIS STUDY

OIG administers the Medicaid Fraud Control Unit (MFCU or Unit) grant awards, annually recertifies the Units, and oversees the Units' performance in accordance with the requirements of the grant. As part of this oversight, OIG conducts periodic reviews of Units and prepares public reports based on these reviews.

HOW WE DID THIS STUDY

OIG conducted the inspection of the South Carolina MFCU in January 2021 using a remote format. Our inspection covered the 3-year period of FYs 2018 through 2020. We based our inspection on an analysis of data and information from 6 sources: (1) Unit documentation; (2) financial documentation; (3) structured interviews with key stakeholders; (4) structured interviews with the Unit's managers and selected staff; (5) a review of a random sample of 88 case files from the 464 nonglobal case files that were open at some point during the review period; and (6) a review of all convictions submitted to OIG for program exclusion and all adverse actions submitted to the National Practitioner Data Bank during the review period.

WHAT WE FOUND

We observed that the South Carolina MFCU was highly respected by State and Federal partners and that the Unit successfully investigated and prosecuted cases of Medicaid fraud and patient abuse or neglect. For FYs 2018-2020, we identified six areas in which the Unit should improve its adherence to program standards and/or requirements.

We found that low staff levels and significant turnover contributed to large caseloads for Unit staff. We also found that in 16 percent of the Unit's case files, the Unit did not document the reason for significant investigative delays. Further, the Unit's case management system posed challenges for retrieving case information, and the Unit did not consistently document periodic supervisory reviews in its case files. Additionally, we found that the Unit did not report many convictions or adverse actions to Federal partners within the appropriate timeframes consistent with regulatory requirements. We also found that the Unit's memorandum of understanding (MOU) with the State Medicaid agency generally reflected current practice, policy, and legal requirements with the exception of a regulatory requirement regarding procedures for the receipt of managed care referrals.

We also made observations regarding Unit operations and practices, including a beneficial practice employed by the Unit that may serve as a model for other Units: Unit management notified referral sources of the Unit's decision to open formal investigations of incoming referrals.

WHAT WE RECOMMEND

To address the findings, we recommend that the Unit (1) assess the adequacy of existing staffing levels and, if appropriate, consider a plan to expand the size of the Unit; (2) take steps to reduce investigation delays and ensure that the reasons for delays are documented in the case files; (3) seek approval from the South Carolina Office of the Attorney General to implement a new case management system; (4) take steps to ensure that supervisory reviews of Unit case files are conducted periodically and documented in accordance with Unit policy; (5) take steps to ensure that all convictions and adverse actions are reported to Federal partners within the appropriate timeframes; and (6) revise the Unit's MOU with the State Medicaid agency to establish procedures by which the Unit will receive referrals of potential fraud from managed care organizations.