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Division of Audits and Investigations

Stephanie Hold, Director
Susan Selby, Assistant Director

Phone:  502-564-2815
Fax:  502-564-7876

The Division of Audits and Investigations staff investigates and audits for possible fraud, waste or abuse of the programs administered by the Cabinet as mandated by KRS 194A.030. Division staff conducts the following types of investigations:

  • Fraud and abuse by physicians, dentists and other Medicaid providers;
  • Fraud and abuse by recipients in the Medicaid, KTAP, food stamps and child care benefits programs;
  • Fraud and abuse by grocery stores and other vendors participating in the WIC Program; and
  • Fraud, abuse and other misconduct by CHFS employees and contractors.

The division has four branches: Audits,  Medicaid Preliminary Investigations, Compliance and Drug Enforcement and Professional Practices. A description of each is listed below.

Audits Branch

The Audits Branch staff audits and investigates possible fraud, waste or abuse in programs administered by the Cabinet to ensure compliance with state and federal regulations in all areas of performance, including procedural and financial activities.

Upon request by the Department for Medicaid Services, branch staff conducts financial desk reviews/audits of Medicaid providers, which includes primary care centers, rural health clinics, managed care organizations, home health and government providers who are reimbursed based upon costs.

Branch staff also performs initial desk reviews and quality control reviews of audits of health departments, area development districts, and regional community mental health and mental retardation centers.

As necessary, staff provides assistance to the Kentucky Office of Attorney General, U.S. Attorney's Office and the Federal Bureau of Investigation.

Steve Vaught, Branch Manager

Phone:  502-564-2815
Fax:  502-564-7876

Medicaid Preliminary Investigations Branch

The Medicaid Preliminary Investigations Branch staff conducts Medicaid preliminary investigations of Medicaid providers alleged to have questionable or inappropriate billing practices. Branch staff coordinates with and refers cases to law enforcement and the OAG Medicaid Fraud Control Unit as appropriate. Staff also works with the Medicaid Department for Program Integrity on non-criminal cases that require administrative action.

Another type of investigation conducted by branch staff includes the improper use of Medicaid cards by Medicaid members. Staff coordinates the necessary prosecution or administrative action for these types of cases as well.

Authority for this branch is found in KRS 194A.030 and KRS 205.8453.

Martin Raymer, Branch Manager

Phone:  502-564-2815
Fax:  502-564-7876

Compliance Branch

The Compliance Branch contains three investigative sections: Determining Eligibility Through Extensive Review (DETER), Recipient Fraud and Special Investigations. The primary goals of this branch are to prevent and stop waste, fraud and abuse of public assistance programs and conduct special investigations into matters related to the Cabinet, such as employee malfeasance.

The DETER program is a collaborative effort between the Office of Inspector General and the Department for Community Based Services (DCBS) to ensure accuracy of information used to determine eligibility for public assistance programs. While DETER focuses primarily on preventing fraudulent receipt of benefits, DETER staff also may investigate active cases when information is questionable or suspect. DETER investigators verify eligibility factors not routinely available to eligibility workers.  These investigations are completed within 15 days to provide DCBS staff the information needed to process benefits accurately and promptly.

The Recipient Fraud Section staff detects, reviews and investigates fraud and abuse by recipients of state welfare, food stamps, child care and Medicaid assistance programs; establishes claims due the commonwealth; and refers cases for criminal prosecution and administrative collection. Section staff also operates the Medicaid and Welfare Fraud and Abuse Hotline, processes and reviews complaints received on the hotline and from other sources and investigates vendors participating in the WIC Program. 

Special investigations are conducted at the request of the Cabinet secretary or agency office heads into such matters as fraud and abuse by Cabinet contractors and vendors, as well as Cabinet personnel investigations.

Derek Gould, Branch Manager

Phone:  502-564-2815
Fax:  502-564-7876

Medicaid and Welfare Fraud and Abuse Hotline: 

Contact via phone, 1-800-372-2970, or e-mail

Drug Enforcement and Professional Practices Branch

The Drug Enforcement and Professional Practices Branch (DEPPB) staff administers and enforces the Kentucky Controlled Substances Act (KRS 218A), the Kentucky Food, Drug and Cosmetic Act (KRS 217) and the Kentucky All Schedule Prescription Electronic Reporting (KASPER) program.  

DEPPB staff licenses manufacturers and/or wholesalers who distribute controlled substances in Kentucky. Staff currently includes investigators who are registered pharmacists and sworn law enforcement officers who work closely with the Kentucky State Police, Office of Attorney General, U.S. Drug Enforcement Administration, local law enforcement agencies and Kentucky's professional licensure boards to enforce the provisions of KRS 218A and KRS 217.

John McGuire, Branch Manager

Phone:  502-564-2815
Fax:  502-564-7468


DEPPB New Controlled Substance License Application [PDF - 204K] - to apply for a Kentucky license to be a manufacturer or wholesaler of controlled substances

DEPPB Controlled Substance License Update Form [PDF - 142K] - to update information regarding your current license as a manufacturer or wholesaler of controlled substances

DEPPB Controlled Substance License Renewal Form [PDF 203K] - to renew your current license as a manufacturer or wholesaler of controlled substances

Kentucky On-Site Drug Disposal Form [PDF - 11K] - used to obtain approval and report disposal of controlled substances to the Cabinet for Health and Family Services

Links and Resources:

2013 Controlled Substance Statute Handbook [PDF - 3.89MB]

2013 Controlled Substance Regulation Handbook [PDF - 1.47MB]

Kentucky Scheduled Drug List [PDF - 224K] - Controlled substances listed by schedule.

Link to DEA Form 106

Secure Prescription Blank Printer List [PDF - 177K]

DEA Registered Reverse Distributors 11-2013 [PDF - 94K] - List of reverse distributors for disposal of drugs.  Must be a DEA registrant if disposing of controlled substances.

Public Assistance Fraud is a Crime

Because public assistance fraud is a crime, substantiated investigations are referred for criminal prosecution or administrative sanctions.

You Can Help: If you know or suspect that someone is defrauding or abusing one or more of the programs that we investigate, please tell us. While many cases are the result of routine computer matches, many others could not have been detected without the help of conscientious and concerned citizens and taxpayers.

To report Medicaid and welfare fraud, please call:
(800) 372-2970

The call is free and you may call anytime. If you want to talk to an investigator, please call Monday - Friday, 8 a.m. - 4:30 p.m. Eastern time. At other times you may leave a message.

When you call, please provide as much information as possible, including:

  • Name(s), address(es) and any alias(es) of the person(s) you are reporting;
  • The name(s) and address(es) of any other person(s) who are pertinent to the allegation, including those spouses and children;
  • Social Security number(s) and birth date(s) for such person(s);
  • A factual statement of the allegation; and  
  • The name(s), address(es) and telephone number(s) of anyone who can provide information to us.

You do not have to give your name when you call. However, providing your name and a daytime telephone number will help us if we need clarification or additional information about your complaint. If you give us your name, we will still respect your anonymity.

You may also report suspected public assistance fraud by email, or  by sending your complaint to us by mail at the following address:

Office of Inspector General
Division of Audits and Investigations
275 E. Main St., 5E-D
Frankfort, KY 40621

Please Note: Our investigative authority is limited to the areas discussed above. We do not investigate matters involving child or adult abuse (except those involving residents of some state facilities); Social Security, SSI or Section VIII fraud; or welfare programs administered by other states. Please report abuse and fraud complaints of this type to:

  • Abuse or neglect of a Kentucky resident – (800) 752-6200
  • Food Stamps trafficking in Kentucky – (800) 372-2970
  • Food Stamps trafficking in other states – (800) 424-9121
  • Social Security and SSI fraud – (800) 269-0271
  • Section VIII (subsidized housing) fraud – (800) 347-3735

To report child or adult abuse of a resident of another state, contact the social service agency for the state or county where the person resides.

To report Medicaid or welfare fraud in another state, contact the state or welfare agency for the state or county where the person resides. The United Council on Welfare Fraud maintains links to numerous sites for reporting welfare fraud.


Last Updated 10/21/2015