Federal Reports

Management Letter for the Fiscal Year 2016 Financial Statement Audit

This final report documents the results of our audit on the effectiveness of the National Telecommunications and Information Administration’s (NTIA’s) unliquidated obligation (ULO) review policies and procedures developed since our OIG audit report issued in June 2013 (OIG-13-026-A). In our 2013 report, we concluded that Department-wide controls over the management of ULOs needed strengthening. We also concluded that effective management of outstanding obligation balances allows bureaus to review and deobligate unneeded funds, promoting a better use of federal resources. Our objective for the current audit was to evaluate the effectiveness of NTIA obligation and deobligation practices, as well as review policies and procedures that were implemented, since our June 2013 audit report.

For the period January 1 through December 31, 2013, the Virginia Department of Medical Assistance Services, Division of Health Care Services (State agency), did not fully comply with Federal Medicaid requirements for billing manufacturers for some rebates for physician-administered drugs dispensed to enrollees of managed-care organizations (MCOs). The State agency properly billed manufacturers for rebates for drugs associated with the National Drug Codes (NDCs) in our judgmental sample. However, the State agency did not have valid NDCs for other drug utilization data submitted by MCOs for physician-administered drugs, and the State agency did not bill manufacturers for rebates for these drugs. The State agency estimated average rebates per claim billed to manufacturers, and we determined these estimates to be reasonable. We applied the estimates and determined that the State agency did not bill rebates of $5.8 million ($2.9 million Federal share) to manufacturers for physician-administered drug utilization without valid NDCs.

The University of Louisville did not always claim selected costs charged directly to HHS awards in accordance with Federal regulations and, where appropriate, NIH guidelines. In our sample of 120 salary transactions, 102 were allowable but 18 were not. In addition, in our sample of 100 nonsalary transactions, 61 were allowable but 39 were not. These unallowable transactions occurred because the University did not provide adequate oversight to ensure consistent compliance with Federal regulations.

University of Mississippi Medical Center (the Hospital) (operating in Jackson, Mississippi) complied with Medicare billing requirements for 137 of the 217 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 80 claims, resulting in net overpayments of $68,000 for the audit period. Specifically, 12 inpatient claims had billing errors, resulting in net overpayments of $41,000 and 68 outpatient claims had billing errors, resulting in net overpayments of $27,000. These errors occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors. On the basis of our sample results, we estimated that the Hospital received net overpayments of at least $356,000 for the audit period.

NorthShore University HealthSystem (the Hospital) complied with Medicare billing requirements for 97 of the 190 inpatient and outpatient claims we reviewed. However, the Hospital did not fully comply with Medicare billing requirements for the remaining 93 claims, resulting in overpayments of $625,000 for CYs 2013 and 2014 (audit period). On the basis of our sample results, we estimated that the Hospital received overpayments totaling at least $4.1 million for the audit period. Overpayments occurred primarily because the Hospital did not have adequate controls to prevent the incorrect billing of Medicare claims within the selected risk areas that contained errors.