An Audit Report on the Office of Inspector General at the Health and Human Services Commission
November 2006
Report Number 07-004
Overall Conclusion
The Office of Inspector General (OIG) at the Health and Human Services Commission is investigating fraud, waste, and abuse as required by state law (House Bill 2292, 78th Legislature, Regular Session). The OIG has also consolidated investigative functions as required by state law (House Bill 2292).
During fiscal year 2005, the OIG reported:
- Completing 59,440 investigations of recipient fraud and overpayments, recovering more than $21.3 million, and referring 3,796 cases for prosecution.
- Completing 2,211 provider fraud and over-billing investigations, recovering more than $36.4 million, and referring 151 cases for prosecution.
Two significant exceptions limit the OIG's ability to investigate fraud, waste, and abuse. The Health and Human Services Commission (Commission) is piloting the Texas Integrated Eligibility Redesign System (TIERS) in two counties. The OIG is not investigating potential recipient fraud and overpayments for the Food Stamp, Temporary Assistance for Needy Families (TANF), and Medicaid programs in these two counties. According to information provided by the Commission, TIERS determined eligibility for an average of 151,000 recipients per month for these programs since the pilot began in the two counties. For fiscal year 2006, TIERS determined $103 million in benefits for the Food Stamp Program and $4.7 million for TANF, based on information provided by the Commission. According to the OIG, data that is critical to pursuing investigations of fraud and overpayment is not readily accessible to investigators through TIERS, and the data that is accessible is not sufficient to legally pursue criminal proceedings for fraud or to recoup certain types of overpayments.
In addition, the pharmacy benefit manager contractor has not provided Medicaid Vendor Drug Program claims to the OIG since January 2006, which limits the OIG's ability to investigate potential Medicaid fraud and overpayments on a statewide basis. Therefore, the $1 billion paid by the pharmacy benefit manager for the Medicaid Vendor Drug Program from January 1, 2006, to August 31, 2006, was not analyzed to identify potential fraud and overpayments.
Additionally, the OIG should evaluate ways to further improve the screening of cases to ensure that resources are directed toward those cases with the greatest potential to recover funds. The automated screening process designed to filter out cases in which fraud or overpayments are unlikely was improved in early 2005. Still, OIG investigators have to eliminate more than half of their cases in the early stages of an investigation because an overpayment or fraud did not occur.
There are also opportunities for the OIG's Internal Affairs and Audit Sections to improve coordination and communications with health and human services agencies. For example, the OIG's Audit Section should have periodic updates with the five health and human services agencies to improve coordination and establish a more efficient audit process.
The Office of Inspector General Semi-Annual Report could be improved by clarifying the Third-Party Resources line item and enhancing processes used to verify reported amounts and estimated savings. Further, information technology controls at the Health and Human Services Commission and the OIG do not always ensure that all information is accurate and complete, and they do not protect all information from unauthorized access. To minimize the risk associated with public disclosure, this report summarizes the weaknesses in information technology security identified during the audit, but it does not reveal specific vulnerabilities.
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