Federal Reports

DOL's reported Unemployment Insurance improper payment rate of 9.17 percent is compliant with Payment Integrity Information Act of 2019, it is not representative of total unemployment expenses for program year 2020. This occurred for the following reasons: (1) DOL excluded CARES Act of 2020 because these unemployment payments were not in existence for more than 12 months, and (2) DOL received direction from Office of Management and Budget to utilize the results from the first three quarters of the program year. This allowed state workforce agencies to suspend work on improper payment sampling to reduce the burden on program resources. The DOL-OIG's initial pandemic audit and investigation work indicate UI program improper payments, including fraudulent payments, is likely higher than 10 percent.

Effective January 1, 2015, the Centers for Medicare & Medicaid Services (CMS) established a policy for Medicare to pay under the Medicare Physician Fee Schedule for chronic care management (CCM) services rendered to beneficiaries whose medical conditions meet certain criteria. Effective January 1, 2017, CMS unbundled complex CCM from noncomplex CCM and began paying separately for complex CCM. Although scope of service and billing requirements are the same for noncomplex CCM as for complex CCM, the two types of services differ as to clinical staff time, medical decisionmaking, and care planning. CCM services are a relatively new category of Medicare-covered services and are at higher risk for overpayments. This audit expands on the findings of a previous OIG audit.

During our audit period, CDS was a subsidiary of Blue Cross Blue Shield of South Carolina (BCBS South Carolina), whose home office is in Columbia, South Carolina. CDS was created after being awarded the Enterprise Data Center (EDC) contract effective March 10, 2006. The EDC contract was replaced by a Virtual Data Center contract on November 15, 2012, which is still in effect. Upon creation of the CDS Medicare segment, BCBS South Carolina and CDS elected to follow CAS regulations regarding segmented accounting. The disclosure statement that CDS submits to CMS states that CDS uses pooled cost accounting. Medicare contractors use pooled cost accounting to calculate the indirect cost rates (whose computations include pension and PRB costs) that they submit on their ICPs. Medicare contractors use the indirect cost rates to calculate the contract costs that they report on their ICPs. In turn, CMS uses these indirect cost rates in determining the final indirect cost rates for each contract. Medicare Reimbursement of Pension CostsCMS reimburses a portion of the annual contributions that contractors make to their pension plans. The pension costs are included in the computation of the indirect cost rates reported on the ICPs. In turn, CMS uses indirect cost rates in reimbursing costs under cost-reimbursement contracts. To be allowable for Medicare reimbursement, pension costs must be (1) measured, assigned, and allocated in accordance with CAS 412 and 413 and (2) funded as specified by part 31 of the FAR. In claiming costs, contractors must follow cost reimbursement principles contained in the FAR, the CAS, and the Medicare contracts. Previous Audits of Allocable Pension CostsWe previously reviewed CDS’s allocable pension costs (A-07-17-00511; Aug. 28, 2017) and BCBS South Carolina’s allocable pension costs (A-07-17-00509; Aug. 28, 2017). Our previous CDS audit report identified allocable pension costs that CDS should have used when calculating its indirect cost rates for CYs 2008 through 2012. We recommended that CDS increase the allocable pension costs for CYs 2008 through 2012 by $30,436. Our previous BCBS South Carolina audit report identified Other segment allocable pension costs that its subsidiaries’ Medicare segments should have used when calculating BCBS South Carolina’s indirect cost rates for CYs 2006 through 2012. We recommended that BCBS South Carolina decrease the allocable pension costs used to calculate its Medicare segments’ indirect cost rates for CYs 2006 through 2012 by $6,193,748. Incurred Cost Proposal AuditsAt CMS’s request, Figliozzi & Company CPAs P.C. (Figliozzi), Mayer Hoffman McCann P.C. (McCann), the Defense Contract Audit Agency (DCAA), and CohnReznick (Reznick) performed audits of the ICPs that CDS submitted for CYs 2012 through 2016. The objectives of these ICP audits were to determine whether costs were allowable in accordance with applicable Federal regulations. For our current audit, we relied on the Figliozzi, McCann, DCAA, and Reznick ICP audit findings and recommendations when computing the allowable pension costs discussed in this report. We incorporated the results of the Figliozzi, McCann, DCAA, and Reznick ICP audits into our computations of the audited indirect cost rates, and ultimately the pension costs claimed, for the contracts subject to the FAR. CMS will use our report on allowable pension costs, as well as the Figliozzi, McCann, DCAA, and Reznick ICP audit reports, to determine the final indirect cost rates and the total allowable contract costs for CDS for CYs 2012 through 2016. The cognizant Contracting Officer will perform a final settlement with the contractor to determine the final indirect cost rates. These rates ultimately determine the final costs of each contract.

An Amtrak trackman/flagman based in Chicago, Illinois, resigned from employment on August 5, 2021, prior to his administrative hearing. Our investigation found that the former employee violated company policies by driving and operating company-owned vehicles without a valid driver’s license on a routine basis. We further determined that he was arrested and convicted on two occasions for operating a vehicle while intoxicated and did not report the incidents to the company as policy required.

Our objective was to determine whether NIST is complying with the requirements of the CARES Act. Specifically, we determined (1) what steps NIST took to implement and comply with the CARES Act, (2) challenges NIST faced during implementation, and (3) NIST’s status in the processing of applications and awarding funds under the CARES Act. Overall, we found that NIST implemented and followed the requirements of the CARES Act and applicable grant award policies and procedures. In addition, NIST implemented measures to mitigate challenges resulting from an increased workload and a forced transition to a virtual work environment prompted by the COVID-19 pandemic, and is on track to fully obligate and expend all CARES Act funds before September 30, 2021.

The Defense Department estimates that two of every three sexual assaults suffered during military service go unreported. As a result, evidence of the trauma can be difficult to subsequently produce or validate, posing a special challenge for VA when processing related veterans’ benefit claims for posttraumatic stress disorder.In response, the Veterans Benefits Administration (VBA) has established special procedures to help veterans support their claims when they do not have the evidence or documentation usually required. However, in an August 2018 report, the VA Office of Inspector General (OIG) found that about half of the military sexual trauma claims denied between April 1 and September 30, 2017, were not properly processed under VBA procedures, resulting in premature denial. These premature denials could have resulted in veterans not receiving the benefits they deserved. The OIG made six recommendations intended to help VBA review and correct all prematurely denied claims since October 1, 2016, and to better process them in the future.This report examined whether VBA effectively implemented the OIG’s 2018 recommendations and found that processors did not always follow the updated policies and procedures. VBA leaders did not effectively implement the OIG’s recommendations and did not ensure adequate governance over military sexual trauma claims processing. The OIG concluded that VBA was not properly implementing the recommended changes.The OIG recommended the acting under secretary for benefits should establish a formal procedure to correct all claims processing errors identified by the OIG. The OIG also recommended the acting under secretary fix continuing military sexual trauma claims processing deficiencies and strengthen controls to effectively implement and promote compliance with the OIG’s 2018 recommendations. Lastly, the acting under secretary should ensure VBA strengthen communication, oversight, and accountability for the processing of military sexual trauma claims.