Federal Reports

Selected General Information System Controls at the Railroad Retirement Board Were Not Always Adequate

Under the home health prospective payment system (PPS), the Centers for Medicare & Medicaid Services pays home health agencies (HHAs) a standardized payment for each 60-day episode of care that a beneficiary receives. The PPS payment covers intermittent skilled nursing and home health aide visits, therapy (physical, occupational, and speech-language pathology), medical social services, and medical supplies. Our prior reviews of home health services identified significant overpayments to HHAs. These overpayments were largely the result of HHAs improperly billing for services to beneficiaries who were not confined to the home (homebound) or were not in need of skilled services. Our objective was to determine whether EHS Home Health Care Service, Inc. (EHS), complied with Medicare requirements for billing home health services on selected types of claims.

The Postal Service uses Negotiated Service Agreements (NSAs) to better meet customer needs in the highly competitive parcel shipping market. The number of NSAs has grown from several dozen in 2012 to more than 1,000 as of 2018. These agreements must be approved by the Postal Regulatory Commission (PRC). Of the more than 1,400 domestic package agreements submitted to the PRC for review since 2006, all of them have been approved. While the regulatory bar is relatively low, the process for developing, approving, and managing NSAs is complex.

We conducted this audit to provide Postal Service management with timely information on potential operational risks at the Graceland Annex in the Chicago District of the Great Lakes Area. The Graceland Annex has 651 city routes and two parcel delivery routes staffed with 79 regular carriers and 17 City Carrier Associates (CCA). We selected the Graceland Annex to review because of concerns raised by U.S. Representative Mike Quigley of Chicago, IL, related to misdelivery of mail, damaged mail, and inconsistent mail delivery. In a letter to the Postmaster General in October 2018, Congressman Quigley outlined persistent mail delivery service issues throughout his district.

I am pleased to submit our Semiannual Report to the United States Congress. This report—our office’s 59th—highlights our audits and investigations for the six months ending March 31, 2019, pursuant to the Inspector General Act of 1978, as amended. During this period, our audit work continued to focus on high-impact areas, with an emphasis on safety, security, and reducing costs and increasing revenue. For example, our work found significantly more drug- and alcohol-related issues among employees in safety-sensitive positions—such as train engineers—than the company identified through its detection programs. We also updated our work on the company’s background check process, and found that the company had strengthened its procedures, but needed additional measures to ensure its contracted employees were properly screened. Additionally, we identified opportunities for the company to reduce its costs associated with servicing and inspecting trains and found it could have avoided $23.2 million in unnecessary costs if it better managed its leased and owned properties. Our investigative work this period led to more than $4 million in recoveries and restitutions in various fraud-related cases. In one, we uncovered a contract steering scheme in which a former Amtrak procurement official steered more than $7.6 million in contracts to a manufacturing firm in exchange for $20,000 in bribes, trips, and other items. In another, our work led to a $260,000 settlement between the Department of Justice and an Amtrak contractor that had allegedly overbilled the company since 2012. Further, our agents continue to support ongoing, complex health care fraud investigations across the country, which ultimately impact insurance claims against the company. Finally, we bid farewell to our former Inspector General, Tom Howard, who retired in January. His 44 years of service to the accountability community and the nation have left a lasting, positive mark and we remain indebted to his contributions. It is my honor to carry on the work of our dedicated and talented team—where we will continue to provide independent, thoughtful, and objective oversight on issues of importance to the company, the Board of Directors, Congress, and the public. We trust you will find this report informative.