FCA-2012-4445

The results of our audit disclosed deficiencies in internal control and/or instances of noncompliance or other matters that are considered reportable under Government Auditing Standards. These items included: During our audit period, HMS generated $157.9 million in total recoveries to the Department with payments due to HMS of $14.9 million. That represents a return of investment of 962% without regard to federal participation amounts or cost avoidance projections. The recovery amounts substantially exceeded contractor payments. Payments made to IBM under its contract with the Division of Medical Assistance were not based on actual deliverables, and the current return on investment has not reached the levels projected in the contract. Nonetheless, the contract may have long-term potential for cost savings. Payments made under a contract with SAS did not coincide with completion and acceptance of deliverables as specified in the contract, and the current return on investment has not reached the levels projected in the contract. The contract with SAS provides the Department with what it considers to be more sophisticated tools for the detection of Medicaid fraud that may have the long-term potential for cost savings. The Division of Medical Assistance has not sufficiently monitored PCG's performance to ensure the quality of work performed. As a result, questionable results have been achieved that were not detected by the Division in a timely manner. Details about each item are provided in the Audit Findings and Responses section of the report.