1. CDC's CHEMPACK Project:  Nerve Agent Antidote Storage
2. Summary of Inspectors General Reports on Federal Agencies’ Data-Quality Review Processes
3. Review of New Opportunities, Inc.'s, Compliance With Health and Safety Regulations for Head Start Programs
4. Review of Georgia's Pandemic Influenza Expenditures for the Period August 31, 2005, Through June 30, 2008
5. Review of Medicaid Supplemental Rate Payments to UMass Memorial Health Care, Inc., for Fiscal Years 2004 and 2005
6. Review of High-Dollar Inpatient Claims Processed by Cahaba Government Benefit Administrators, LLC (Contractor No. 00010), for Calendar Years 2004 Through 2006
7. Review of Comprehensive Outpatient Rehabilitation Facility Therapy Services Provided by Care Alliance of America, Inc.

1.CDC's CHEMPACK Project:  Nerve Agent Antidote Storage

The OIG found that the Centers for Disease Control and Prevention's (CDC) procedures did not ensure that nerve agent antidotes stockpiled in States to respond to a nerve agent release were stored to ensure their highest level of quality.  While this finding is specific to the CHEMPACK project, it raises concerns about whether a similar vulnerability also exists with other CDC assets, i.e., non-CHEMPACK drugs in the $3.5-billion Strategic National Stockpile because all assets share the same quality system and similar Shelf Life Extension Program (SLEP) procedures.

In 2004, CDC established the CHEMPACK project as part of the Strategic National Stockpile to assist States in protecting communities against the potentially deadly effects of chemical agents that attack the human nervous system (i.e., nerve agents).  While nerve agent antidotes in the CHEMPACK Project (hereinafter referred to as CHEMPACK drugs) are part of the Strategic National Stockpile, they are not located with other federally stockpiled drugs.  Through this voluntary project, CDC has placed over 1,900 containers of CHEMPACK drugs in multiple locations in participating States, thereby allowing States to quickly respond to a nerve agent release.  Each container is stocked with CHEMPACK drugs to treat 454 or 1,000 people, depending on the container's configuration.

As a holder of CHEMPACK drugs, CDC is subject to current good manufacturing practices (CGMP) provisions in the Food, Drug, and Cosmetic Act (the Act).  The Food and Drug Administration (FDA) considers CGMP provisions of the Act to be met if drugs are stored under conditions required by their FDA-approved label.  FDA also requires entities that perform activities regulated by CGMP to establish and maintain a system to ensure the quality of their products.  Finally, CDC participates in SLEP for CHEMPACK drugs.  SLEP is a program that defers drug replacement costs by extending their expiration dates. 

The OIG found that almost one-quarter of CHEMPACK containers did not have at least three daily temperature readings in accordance with CDC procedures.  The OIG also found that CDC's storage requirements for CHEMPACK drugs were not consistent with FDA's storage requirements and that 9 percent of CHEMPACK containers with at least three daily temperature readings were not stored according to FDA's storage requirements for at least 1 month.  In addition, CDC did not consistently implement quality system procedures.  Finally, the OIG found that CDC's procedures allowed CHEMPACK drugs to inappropriately receive extended expiration dates under SLEP. 

The OIG recommend that CDC (1) seek FDA guidance on whether CHEMPACK drugs that have received extended expiration dates under SLEP are appropriate for use, (2) revise its CHEMPACK project SLEP procedures to comply with FDA requirements, (3) revise its CHEMPACK drug storage temperature requirements to comply with FDA requirements, and (4) ensure that the CHEMPACK project's quality system meets CGMP requirements for drug storage.

CDC concurred with all four of the OIG’s recommendations.  CDC noted several actions it has taken or plans to take to address their findings and recommendations.  For example, CDC has retroactively calculated mean kinetic temperature for the same period as their evaluation and identified three CHEMPACK containers that FDA suggests may require additional testing to assure potency.  However, it is unclear from CDC's comments how it accounted for CHEMPACK containers that were missing temperature readings and documentation of temperature-recording device calibrations.  Finally, CDC stated that the OIG’s report did not evaluate the overall Strategic National Stockpile program and therefore should not imply that problems exist with Strategic National Stockpile non-CHEMPACK assets.  Nevertheless, CDC has begun an assessment of how best to initiate an independent review of its quality system and other procedures relative to CHEMPACK containers, and the rest of the Strategic National Stockpile assets, to ensure compliance with FDA requirements.

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2. Summary of Inspectors General Reports on Federal Agencies’ Data-Quality Review Processes

The Recovery Act created the Recovery Accountability and Transparency Board (Recovery Board) to provide transparency in the use of Recovery Act funds and to prevent and detect fraud, waste, and mismanagement. To help meet its mandate, the Recovery Board requested that the 29 Inspectors General (IG) of Federal agencies receiving Recovery Act funds determine whether the agencies had processes in place to perform limited data-quality reviews of recipient-reported information and to notify recipients of the need to make appropriate and timely changes.

As of November 3, 2009, 20 IGs had issued 21 reports. Because many of the IGs’ assessments were conducted before the recipients reported and corrected data, the objective of the IGs’ assessments did not include determining whether the agencies’ processes operated effectively. However, most of the 20 IGs indicated that they intend to evaluate the effectiveness of agency processes in future reviews.

Fifteen of the twenty IGs assessed agency processes for reviewing information reported by both grantees and contractors. The five other IGs advised the Recovery Board that they assessed agency processes only for grantees because the final OMB guidance for contractors was not available until September 30, 2009.

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3. Review of New Opportunities, Inc.'s, Compliance With Health and Safety Regulations for Head Start Programs

The OIG’s review found that New Opportunities, Inc. (the CT Grantee), did not fully comply with Federal and State regulations on ensuring the health and safety of children in its care.  The Grantee provides early learning services to children aged 6 weeks to 5 years and their families through a variety of programs at three facilities. 

As of May 2009, (1) the files on 6 of the Grantee's 127 Head Start employees did not contain all required documents, (2) the Grantee's three childcare facilities did not always meet Federal Head Start and State regulations on protecting children from unsafe materials and equipment, and (3) the Grantee's three childcare facilities did not always provide a secure environment for the children in their care.  These deficiencies occurred because the Grantee did not have adequate procedures or did not consistently follow procedures that were in place to ensure that it complied with Federal and State health and safety regulations.  The Grantee's failure to follow these regulations jeopardized the health and safety of children in its care. 

The OIG recommended that the Grantee develop and consistently implement procedures to ensure that (1) all employee files contain all required documentation, (2) all unsafe materials and equipment are stored in locked areas out of the reach of children and all necessary repairs are addressed in a timely manner, and (3) all facilities are secure.  In written comments on their draft report, the Grantee described its completed and ongoing actions to address the deficiencies that the OIG identified.

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4. Review of Georgia's Pandemic Influenza Expenditures for the Period August 31, 2005, Through June 30, 2008
As of June 30, 2008, Georgia's Division of Public Health, Office of Preparedness (the State agency) had spent $4.9 million of the $14 million in pandemic influenza (pan flu) funding that it received from the Centers for Disease Control and Prevention.  The unspent funds totaled $9 million, or 65 percent of the cumulative awarded amount.

The OIG reviewed $2.9 million of the $4.9 million charged to the award and concluded that $2.5 million complied with Federal cost requirements.  The remaining $379,000 was not allowable.  Specifically, $255,000 was not adequately documented, and $125,000 did not meet Federal cost requirements.

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5. Review of Medicaid Supplemental Rate Payments to UMass Memorial Health Care, Inc., for Fiscal Years 2004 and 2005

Of the $337 million that the Massachusetts Executive Office of Health and Human Services (the State agency) claimed in Medicaid supplemental rate payments to UMass Memorial Health Care, Inc. (UMMHC), during fiscal years 2004 and 2005, the OIG found that $11.5 million ($5.75 million Federal share) was not claimed in accordance with Federal and State plan requirements.  The OIG also identified an additional $5.6 million ($2.8 million Federal share) in supplemental payments that represented payments to the University of Massachusetts Medical School on which the OIG were unable to express an opinion. 

The OIG recommended that the State agency (1) make a financial adjustment of $11.5 million ($5.75 million Federal share), (2) work with the Centers for Medicare & Medicaid Services (CMS) to determine the appropriateness of $5.6 million ($2.8 million Federal share) in supplemental payments representing UMMHC payments to the Medical School, and (3) follow State plan requirements when submitting claims for supplemental payments.  The State agency disagreed with $8.5 million of the OIG’s $11.5 million finding but agreed to work with CMS in resolving their finding related to payments to the Medical School.

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6. Review of High-Dollar Inpatient Claims Processed by Cahaba Government Benefit Administrators, LLC (Contractor No. 00010), for Calendar Years 2004 Through 2006

Cahaba Government Benefit Administrators, LLC (Cahaba), overpaid Alabama hospitals $1.5 million for inpatient services during calendar years 2004 through 2006.  Contrary to Federal guidance, hospitals reported excessive units of service and charges that resulted in inappropriate outlier or add-on payments and failed to maintain documentation of all charges filed.  Hospitals generally attributed the incorrect claims to data entry errors or insufficient documentation.  Cahaba made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to detect and prevent the overpayments.  Additionally, Cahaba overpaid one claim because it used an incorrect wage index when determining the payment.  Cahaba attributed this overpayment to a data entry error.

The OIG recommended that Cahaba (1) recover the $1.5 million in identified overpayments, (2) use the results of this audit in its provider education activities, and (3) consider implementing controls to identify and review all payments greater than $200,000 for inpatient services.  Cahaba agreed with their recommendations.

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7. Review of Comprehensive Outpatient Rehabilitation Facility Therapy Services Provided by Care Alliance of America, Inc.

Care Alliance of America, Inc., a comprehensive outpatient rehabilitation facility in Florida, received an estimated $1.7 million for outpatient therapy services that did not meet Medicare reimbursement requirements for calendar year 2003.

Care Alliance did not always follow Medicare requirements or its own policies and procedures for reporting service units, ensuring that therapy services were adequately documented and complied with the written plan of treatment, or determining medical necessity.

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