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NC Department of Health and Human Services
NC Division of
Medical Assistance

Program Integrity

Rob Kindsvatter, Director for Compliance

New Location:
333 E Six Forks Rd, 3rd floor
Raleigh NC 27609

Mailing Address:
2501 Mail Service Center
Raleigh, NC 27699-2501

Phone: 919-814-0000
Fax:  919-814-0034

Mission Statement

It is the mission of Program Integrity to ensure compliance, efficiency, and accountability within the N.C. Medicaid Program by detecting and preventing fraud, waste, program abuse, and by ensuring that Medicaid dollars are paid appropriately by implementing tort recoveries, pursuing recoupments, and identifying avenues for cost avoidance.

October 2011 Program Integrity Special Bulletin

Guiding Principles

Program Integrity, through teamwork with our DMA partners,

  1. Strives to operate the most cost efficient health care system possible while further enhancing the quality and appropriateness of services delivered.
  2. Requires and supports efforts where our health care providers are able to identify and resolve issues themselves.
  3. Holds provider agencies accountable for failing to have systems in place to prevent improper billing.
  4. Increases the usage of the administrative tools of payment suspension, prepayment review, audit, sanction, and individual and entity exclusion when improper payments are discovered.
  5. Develops and communicates consistent measures of effectiveness of program integrity, which capture cost reduction and avoidance, as well as recoveries, and minimize cost imposed by reviews and investigation.
  6. Recognizes areas of vulnerabilities that adversely affect program integrity.

Reporting Fraud and Abuse

Money Recovered From Program Integrity Investigations

Efforts of the staff in Program Integrity saved, recovered, or avoided N.C. Medicaid costs of more than $1.1 billion during State Fiscal Year (SFY) 2006. More detailed Program Integrity data - Medicaid Annual Reports.

Medicaid Measures Dashboards

Fraud and Abuse Investigations

Program Integrity is committed to identifying Medicaid overpayments and fraud. We actively pursue any leads indicating fraudulent practices and use them as a source to begin investigations. To increase our effectiveness, we have partnered with the Medicare carriers and Federal staff to share information about fraudulent activity and conduct joint investigations.

Program Integrity receives complaints from patients, their families, other providers, former employees of a provider, and through federal and state referrals. Program Integrity staff investigates every complaint. In addition, we also identify patterns of fraud and abuse through our Fraud and Abuse Detection System (FADS),

Review decisions can result in refunds to the program for inappropriate Medicaid payments, training on how to correct or improve billing practices, referral to licensing boards, and/or referral to the N.C. Office of the Attorney General for suspected fraudulent practices.

Program Integrity also targets areas with a high-risk potential for abuse. We submit suggestions for improvement to DMA Management who then work with the provider associations to find solutions.

Criminal Fraud Prosecution

While Program Integrity identifies Medicaid fraud, the Attorney General's Medicaid Investigations Unit (MIU) takes the legal action to convict a provider of criminal fraud. The MIU coordinates their efforts with the IRS, State Bureau of Investigation, FBI, Drug Enforcement Agency, U.S. Attorney, Office of Inspector General and the Medicaid Fraud Control Units in other states to resolve fraud cases. As a general rule, once a case is taken by the MIU, Program Integrity staff involvement with the provider ceases.

Public Concern over Fraud, Waste, and Abuse in Health Care

Health care costs are increasing every year. The available money to fund Medicaid and other State programs is decreasing. Fraud and abuse takes money from needy children, the elderly, blind, and disabled. Therefore, identifying, investigating, preventing and recovering money billed improperly to Medicaid is an important mission for this agency.

The majority of providers and their billings are honest and accurate. However, one dishonest provider can take thousands of dollars slowly over time by billing for services not rendered or medically unnecessary. Far worse, with computerized electronic billing, one dishonest provider can illegally take hundreds of thousands of dollars in a few weeks or months. These occurrences often provide a negative perception of the overall program.

While many PI reviews are targeted at specific complaints or suspicions, often our reviews are routine. Our review process is not intended to impugn the integrity of any provider or category of care but merely to verify the accuracy of the need, provision, and payment for the services provided. We attempt to make every routine review as convenient as possible and work with the provider to reduce the distraction that might occur.

Excluded Provider List

What is an excluded provider? An excluded provider is an individual or entity that cannot bill or cause services to be billed to Medicaid, Medicare, or the North Carolina Health Choice (N.C. Health Choice) program. 

The following website gives additional information on the effect of exclusions on participation in federal programs:

The Effect of Exclusion From Participation in Federal Health Care Programs (

Federal Exclusions

N.C. Medicaid Excluded Provider List

  • PDF- updated 08/26/15 (137KB)
  • Excel - updated 08/26/15 (38KB)

The State of North Carolina works diligently to prevent excluded providers from participating in the N.C Medicaid and N.C. Health Choice programs in order to comply with federal regulations.

Program Integrity Sections

To report suspected improper Medicaid billing, program abuse, waste or fraud, refer to Reporting Fraud and Abuse or contact us directly using the e-mail addresses and telephone numbers listed below for the Program Integrity sections.

Provider Medical Review Section/ Pharmacy Review Section

Contact: Geneva Fearrington, Section Chief
Phone: 919-814-0190
Provider Medical Review Fax:
Pharmacy Review Fax:

The Provider Medical Review Section and Pharmacy Review Section are investigative sections of Program Integrity.  The Provider Medical Review Section is responsible for review of physician and physician-type providers, nursing facilities, ambulatory surgery centers, hospitals, dialysis facilities, health departments, federally qualified health clinics, rural health clinics, ambulance, laboratory, and radiology services.   The Pharmacy Review Section is responsible for review of pharmacy providers.   

The sections examine claims/payment data and medical record documentation to ensure compliance, efficiency, and accountability within the N.C. Medicaid Program by detecting and preventing suspected fraud, waste and program abuse, and by ensuring that Medicaid dollars are paid appropriately through application of Medicaid coverage policy. Reviews are initiated from automated reports, data mining, referrals from a variety of sources, and complaints from recipients and the general public.

The sections also provide related educational activities and collaborate with other sections within the Division on coverage policy, reimbursement, and provider enrollment.    

Home Care Review Section

Contact: Carol Lukosius
Email at

The Home Care Review Section consists of a nurse supervisor, registered nurse analysts, dental investigator, administrative investigators, and administrative support staff. This section conducts post payment reviews on dental and home and community based services provided to Medicaid recipients to determine if the services were medically necessary, of acceptable quality and provided in accordance with Medicaid coverage and billing policies. In addition, the analysts review for evidence that the provider is practicing in accordance with the terms and conditions of Medicaid participation and claims submission agreements. The provider types reviewed include, but are not limited to: Home Health and Hospice, Dentists, Durable Medical Equipment, Private Duty Nursing, Personal Care Services, Independent Practitioners, Community Alternatives Program (CAP) for Disabled Adults and for Children, HIV Case Management, Home Infusion Therapy and Adult Care Homes.

Reviews are initiated from automated reports, referrals from licensing and other regulatory or state agencies, complaints from recipients, CMS contractors, other sections within DMA and the general public. Reviews involve examination of claims/payment data, medical record documentation, and research and application of Medicaid coverage policy. Analysts and investigators of the Home Care Review section conduct both announced and unannounced provider office site visits and recipient interviews.

If overpayments are noted as a result of a post payment review, the Home Care Review Section attempts to recover inappropriately spent Medicaid dollars and educate providers regarding the identified errors in policy compliance or billing. Apparent fraudulent practices are referred to the Attorney General’s Medicaid Investigations Unit. The staff within this section works collaboratively with and supports the staff from the Medicaid Investigations Unit in the investigative process.

Behavioral Health Review Section

Contact: Patrick Piggott, Section Chief

 Behavioral Health Review Section (BHRS) staff performs post-payment administrative and clinical reviews of behavioral health provider claims and services to determine if the services were medically/clinically appropriate and to verify behavioral health providers' compliance with Medicaid coverage policies, and Provider Participation Agreements. Reviews involve examination of claims/payment data, medical record documentation, financial records, administrative research, and application of Medicaid coverage policies. Behavioral health provider reviews are may be conducted on or off-site.

BHRS conducts preliminary reviews on all cases referred by recipients; providers; licensing boards and association; and local, state, and federal agencies.

Third-Party Recovery (TPR) Section

Contact: Dionne M. Toney
Phone: 919-814-0228
Fax: 919-814-0038

The Third-Party Recovery Section and System Support Section (TPR) is primarily responsible for the recovery of Medicaid payments for services that should have been paid by health insurance plans and liability insurance. TPR is also responsible to ensure that accurate insurance information is on recipient files before Medicaid pays claims. Fiscal year 2011, the TPR Section recovered $11,256,361 and saved over $400 million through cost avoidance.

The TPR Section is responsible for the following activities:

  • Casualty Investigations: Recover Medicaid payments from other insurers due to accidental injuries, and on other forms of Tort.
  • Post Payment: Ensures that credit balances owed by providers are reimbursed to the program and oversees Credit Balance Reviews, implements the Medicaid Estate Recovery Plan, processes Medical Support Payments (IV-D); administers the Health Insurance Premium Payment (HIPP) program, and Medicare overpayments.
  • Cost Avoidance: Updates recipient files with third party insurance, recovers prescription drug payments, and oversees the TPL contract.

Health Management Systems (HMS) is contracted to perform the Casualty Investigations, Medicaid Estate Recovery Plan, and administers the Health Insurance Premium Payment (HIPP) Program.

More Third Party Information

Quality Assurance Section

Contact:  Shara Britt, Acting Section Chief

The Quality Assurance Section conducts annual quality control monitoring of recipient eligibility determinations in the Medicaid and North Carolina Health Choice (NCHC) programs.   The objective of quality control monitoring is to measure, identify, and prevent errors due to erroneous eligibility determinations.  Quality Assurance also conducts eligibility reviews in the Medicaid and NCHC programs for the Payment Error Rate Measurement (PERM) every three years as required by the Improper Payments Information Act of 2002.  The Improper Payments Information Act of 2002 focuses on a payment error rate measurement for all expenditures of federal funds in many federally matched programs. 

The results of reviews and monitoring conducted by Quality Assurance are used by Division of Medical Assistance staff and county departments of social services to determine error trends, to identify error-prone cases, and to determine training needs to ensure the Medicaid and NCHC programs are operating accurately.  Quality Assurance recommends corrective action to county departments of social services.  In addition, Quality Assurance collaborates with staff within the Division of Medical Staff to develop and implement corrective action plans as a result of the errors identified from PERM reviews.  

The Quality Assurance Section also develops and implements policies and procedures for recipient fraud and abuse for the county departments of social services.  Quality Assurance also coordinates recipient fraud investigations by the county departments of social services.  In addition, Quality Assurance provides training to county department of social services staff on prevention, detection, and recovery of Medicaid and NCHC recipient overpayments.  Quality Assurance co-sponsors the Enterprise Program Integrity Control System (EPICS) with North Carolina Division of Social Services.  EPICS is the tracking system for overpayments in the Medicaid, NCHC, Food Stamp, and Work First programs. Quality Assurance provides oversight of programming changes for EPICS related to Medicaid and NCHC recipient overpayments.

Quality Assurance also investigates recipient complaints of allegations of providers inappropriately billing recipients for services.  Quality Assurance provides mediation between the recipient and the provider in order to resolve inappropriate billing issues.  Quality Assurance refers providers that will not comply with Medicaid billing requirements to the Attorney General’s office.  

Special Projects Section

Contact: Linda Marsh, Section Chief

The Special Project Section is responsible for managing and coordinating the North Carolina federal and state mandated Program Integrity reviews, including Payment Error Rate Measurement (PERM), Office of the State Auditor (OSA), Medicaid Integrity Group (MIG), Medicaid Integrity Contractors (MIC) and the triennial CMS Medicaid Integrity Program Review. The Special Project section staff is also responsible for the oversight of the Program Integrity Fraud and Abuse Detection System (FADS), which includes the Omni-Alert and Health-Spotlight tools and the monitoring of the DRIVE users license report for efficiency & usage. This section is also charged with preparing necessary reports and coordinates corrective action plans in response to various audit findings.

Under the Special Project Section is the Program Integrity Business Intake Center. The Business Intake Center receives, logs, documents, tracks and verifies all phone and online complaints/allegations that involve N.C. Medicaid providers and recipients. Following the initial gathering of information, cases are disseminated to the appropriate section within DMA for further investigation. The Business Intake Center’s hours of operation are 8:00 a.m. to 5:00 p.m., Monday through Friday (except state holidays) with after-hours voice mail capability.      

Listed below are two significant claim reviews to determine payment accuracy for providers billing N.C. Medicaid. Both involve selecting a stratified random sample of paid claims, obtaining supporting medical record documentation from the provider, conducting process and medical record reviews of the paid claims, and following up on any identified problems.

Office of State Auditor Sample:

This section reviews a 12-month sample of paid claims pulled by the Office of State Auditor who uses the resulting error rate to comply with the State's CAFR.

Payment Error Rate Measurement (PERM):

In compliance with the Improper Payments Information Act of 2002, the Centers for Medicare and Medicaid Services (CMS) implemented a national Payment Error Rate Measurement (PERM) program to measure improper payments in the Medicaid program and the State Children's Health Insurance Program (SCHIP). The PERM review is mandatory across all 50 states. N.C. Medicaid is one of 17 states scheduled for the upcoming FFY 2010 review. PERM errors result in a recoupment for the claim to the provider and a monetary penalty for N.C. Medicaid.

The Special Projects Section coordinates PERM activities with its internal and external stakeholders, monitors the national websites for errors, provides detailed explanations to the review contractor, provider’s error dispute information to the review contractor, appeals decisions to CMS if necessary, and coordinates the corrective action plan for PERM. More PERM Information for Providers > > Ready NC Connect NC