Health Law Daily Wrap Up, AUDITS AND MONITORING—OIG REPORTS: HHS falls short of full compliance with PIIA for FY 2024, (May 30, 2025)
Organizations Mentioned:Ernst & Young LLP
HHS met several requirements under the Payment Integrity Information Act but failed full compliance due to gaps in risk assessments and audit recovery.
The Office of Inspector General (OIG) has found that HHS did not fully comply with the Payment Integrity Information Act of 2019 (PIIA) for fiscal year 2024. In an independent audit conducted by Ernst & Young LLP, it was determined that while HHS satisfied many PIIA requirements, such as publishing improper payment estimates and reporting financial information, it fell short in other key areas. These gaps in compliance were identified despite adherence to guidelines issued by the Office of Management and Budget and generally accepted government auditing standards (OIG Report, No. OAS-25-17-042 (May. 19, 2025)).
A primary shortcoming noted was HHS’ failure to conduct timely risk assessments for all programs with annual outlays exceeding $10 million, a requirement meant to identify susceptibility to improper and unknown payments. Though HHS assessed 89 programs based on FY 2023 outlays, it did not fulfill the statutory mandate to evaluate each qualifying program at least once every three years. This lapse undermines the HHS’ capacity to detect and reduce financial mismanagement across its numerous programs.
Further, the audit highlighted a significant deficiency related to recovery efforts. Specifically, HHS had not completed required recovery audit activities for improper payments identified in the Medicare Advantage (Part C) program. This noncompliance raised concerns regarding HHS' effectiveness in addressing overpayments and ensuring fiscal accountability, especially in high-priority programs like Medicaid, CHIP, and Medicare.
According to the audit, while HHS has demonstrated progress in meeting many aspects of PIIA and maintaining internal control frameworks, these compliance failures suggest a need for stronger oversight and follow-through on statutory obligations. The OIG's report underscores the importance of consistent risk assessment, proper documentation, and timely recovery actions to ensure transparency and stewardship of taxpayer resources.
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