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From Health Law Daily, May 21, 2015

HHS’ annual financials fail to provide full payment information

By Harold M. Bishop, J.D.

A review by the HHS Office of Inspector General (OIG) found that HHS met many of the requirements of the Improper Payments Information Act of 2002, but did not fully comply for fiscal year (FY) 2014 (OIG Report, No. A-17-15-52000, May 18, 2015).

Background. The Improper Payments Elimination and Recovery Act of 2010 (IPERA) (P.L. 111-204) requires OIGs to review and report on agencies’ annual improper payment information included in their Agency Financial Reports (AFRs) to determine compliance with the Improper Payments Information Act of 2002 (IPIA) (P.L. 107-300). An improper payment under the IPIA is any payment that should not have been made or that was made in an incorrect amount (i.e., an overpayment or underpayment). Federal agencies are required to file their AFRs with Congress annually. AFRs are prepared by agency heads in accordance with guidance prescribed by the Director of the Office of Management and Budget (OMB). The Secretary of HHS filed her AFR for FY 2014 on November 13, 2014.

Findings. The HHS OIG assessed the FY 2014 AFR and found that HHS failed to comply with several IPIA requirements, as follows:

  • did not perform risk assessments of payments to employees and charge card payments;

  • did not publish an improper payment estimate for one of eight programs (the Temporary Assistance for Needy Families program (TANF)) that the OMB deemed to be susceptible to significant improper payments;

  • did not publish corrective action plans (CAPs) for TANF;

  • did not meet improper payment rate reduction targets for four of the six programs for which it reported reduction targets in the FY 2013 AFR (Medicare Fee-for-Service (FFS), Medicaid, Foster Care, and Child Care Development Fund); and

  • did not report an improper payment rate of less than 10 percent for one of the eight programs deemed susceptible to improper payments by OMB (Medicare FFS) and two of the seven programs deemed susceptible to improper payments under the DRAA (Administration for Children and Families Social Services Block Grant and Substance Abuse and Mental Health Services Administration Grants).

The OIG also found that HHS has not been in compliance with the IPIA for 4 consecutive FYs for TANF (i.e., no estimate of improper payments and failure to meet other IPIA requirements) and three consecutive FYs for the Medicare FFS program (failure to meet annual reduction targets).

Recommendations. Because HHS has not fully addressed all of the OIG’s recommendations from prior years, including: (1) the need to provide an improper payment estimate for TANF, (2) meet improper payment rate reduction targets, and (3) reduce improper payment error rates to below 10 percent, the OIG recommended addressing these prior recommendations. The OIG plans to continue following up until these recommendations are resolved.

In addition, to address a new requirement under OMB’s guidance, the OIG also recommended that HHS conduct risk assessments of payments to employees and charge card payments as part of its 2015 risk assessment process.

MainStory: TopStory CMSNews MedicaidPaymentNews PaymentNews RiskNews

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