Federal Report Details Corruption at IHS

Festering corruption and incompetence continue to plague the Indian Health Service's Aberdeen Area, which serves parts of North Dakota, South Dakota, Iowa and Nebraska, members of the Senate Committee on Indian Affairs were told this week.

Committee Chairman Sen. Byron L. Dorgan, (D-ND) who convened the Oversight Hearing on Aberdeen Area Review, said he launched the formal investigation into the Aberdeen area two months ago after "hearing about poor performance and mismanagement within the area" over the past five years.

The investigation identified:

• Increasingly high numbers of Equal Employment Opportunity complaints and workforce grievances
• Personnel transfers and administrative leaves commonly used as a remedy for problem employees, including one employee who was paid to stay at home for eight months during an investigation
• Several facilities on the brink of losing accreditation or certification
• Frequent diversion of healthcare services and substantial amounts of missing or stolen narcotics
• Questionable management of Contract Health Services funds
• Mismanagement of billing Medicare, Medicaid or private insurers
• Instances of employees working while impaired, possibly under the influence of alcohol

"In one horrendous incident, a nurse was found to be assisting a C-section in such an impaired state that she couldn't even hold the patient's skin together for staples. This nurse kept her job," Dorgan said.

Many more stories abound of employees who are found to be repeatedly engaging in bad behavior, or illegal activity, but who face little or no disciplinary action, Dorgan said.  Between 2005 and 2010, 176 Aberdeen Area employees were placed on paid administrative leave for a period of time totaling eight years, Dorgan said.

While there are many hard working employees in the Aberdeen region, Dorgan said, "there are also poor performing employees in the system. And I am concerned that these problem employees are being allowed to wreak havoc and demoralize those who fight so hard to provide quality healthcare to our First Americans."

For example, in 2008, an investigation by the Office of Inspector General found two Aberdeen Area employees who had been excluded from participating in federally funded health programs, one because of a criminal conviction for embezzlement, said Gerald Roy, Deputy Inspector General for Investigations of the OIG.

"While still excluded, this employee was subsequently rehired by the same department within the Aberdeen Area Office where she committed her illegal acts.  The other employee was a nurse convicted of drug diversion charges," Roy said.

According to testimony by Roy, the IHS was found to have no policy to verify that employees and contractors were not listed among those individuals and entities excluded from participating in federal health programs.

Roy added that OIG investigation discovered that an IHS employee had "unlawfully altered government medical records of IHS beneficiaries for personal gain."

The employee and co-conspirators had replaced beneficiaries' names with their own on medical records and filed claims for payment to a private insurance company. The investigation resulted in five indictments, two of whom were IHS employees, who were charged with conspiracy and healthcare fraud. "They are jointly responsible for paying the insurance company over $99,000 in restitution," Roy said.

IHS pharmacies also have had problems with controlled substance abuses, including diversion and trafficking by employees, contract providers and patients, Roy said.

"In 2008, we investigated an allegation that a Sioux San pharmacy technician in Rapid City "stole large quantities of Vicodin and Tramadol. When questioned by our special agents, the employee admitted to stealing large quantities of narcotics from the IHS pharmacy, which she then sold on the street for cash."

The investigation revealed that the IHS pharmacy "lacked effective security controls to prevent and detect drug diversion, such as security cameras and two-person inventory counts.

The Aberdeen Area, which serves 122,000 Native Americans living in both rural and urban areas, includes nine hospitals, 15 health centers, two school health stations and several smaller health stations and satellite clinics.