Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

The Government Accountability Office (GAO) has issued a report entitled "Electronic Personal Health Information Exchange: Health Care Entities' Reported Disclosure Practices and Effects on Quality of Care." The report, which was required by the HITECH Act, reviews practices implemented by health information exchange organizations, providers, and other health care entities that disclose electronic personal health information, based on case studies of operational health information exchanges and a selection of each of the exchanges’ participating providers. The health care entities reported that they implement widely-accepted practices for safeguarding personal information to help ensure the appropriate use and disclosure of electronic personal health information for treatment purposes. In addition, both the exchanges and providers reported examples of ways that sharing electronic personal health information has had a positive effect on the quality of care that providers deliver to patients.

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The Government Accountability Office (GAO) has issued a report entitled, “Patient Safety Act: HHS Is in the Process of Implementing the Act, So Its Effectiveness Cannot Yet Be Evaluated.” The report seeks to assess the early implementation of the Patient Safety and Quality Improvement Act of 2005, which included provisions to encourage health care providers to voluntarily report information on medical errors and other events to patient safety organizations (PSOs). The GAO notes that at the time of its review in July 2009, few of the 17 PSOs it interviewed had entered into contracts to work with providers or had begun to receive patient safety data. Some PSOs are waiting for the Agency for Healthcare Research and Quality (AHRQ) to finalize the common formats for PSOs and providers to use in submitting patient safety data to the network of patient safety databases (NPSD). According to AHRQ, if development of the patient safety system remains on schedule, the NPSD could begin receiving patient safety data from hospitals by February 2011. 

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This post was written by Jacqueline B. Penrod.

The Government Accountability Office has outlined the results of a study it conducted regarding how CMS has handled violations of the marketing rules applicable to Medicare Advantage Organizations (MAOs). The study found that between January 2006 and February 2009, CMS took action against 73 MAOs. The most frequent violation cited was noncompliance with regulations limiting commissions to agents; CMS responded that it has established stronger rules for governing these commissions in order to curtail these behaviors. Consequences for MAOs ranged from initial notices of noncompliance to punitive measures, such as civil money penalties. Although GAO was generally complimentary of the compliance efforts, it recommended better tracking of the number of beneficiaries affected by these violations. CMS concurred with this recommendation.

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The Government Accountability Office (GAO) has released a report entitled “Medicaid Outpatient Prescription Drugs: Second Quarter 2008 Federal Upper Limits (FULs) for Reimbursement Compared with Average Retail Pharmacy Acquisition Costs.” The report examines the relationship between FULs based on average manufacturer price (AMP) — as required under the Deficit Reduction Act of 2005 (DRA) but which has been delayed by judicial and legislative action — and pharmacies’ average acquisition costs. Among other things, the GAO concludes that if AMP-based FULs had been in place in the second quarter of 2008, they would have been lower than average retail pharmacy acquisition costs, in general, for most of the 83 drugs in the GAO sample and in the national aggregate (although the GAO notes that its calculations do not account for rebates and discounts that pharmacies may receive from wholesalers or manufacturers). Overall, the FULs would have been 17% lower than acquisition costs, although there was significant variation by state.

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The GAO has released a report entitled "Brand-Name Prescription Drug Pricing: Lack of Therapeutically Equivalent Drugs and Limited Competition May Contribute to Extraordinary Price Increases." According to the GAO, during the period of 2000 to 2008, 416 brand-name drug products had "extraordinary" price increases, defined as a price increase of 100% or more at a single point in time. More than half of the brand-name drug products that had extraordinary price increases were in three therapeutic classes—central nervous system, anti-infective, and cardiovascular. The GAO reports that a lack of therapeutically-equivalent drugs (both generics and other brand-name drugs used to treat the same condition) and limited competition may contribute to extraordinary price increases.

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The GAO has issued two recent reports on nursing home quality of care and sanctions. The first report found that a substantial percentage of state nursing home surveyors and state agency directors identified general weaknesses in the nursing home survey process, including both the survey methodology and guidance on identifying deficiencies. The GAO makes a series of recommendations to CMS to address concerns about CMS’s survey methodology and guidance, workforce shortages, insufficient training, inconsistencies in supervisory review of deficiencies, and state agency practices and external pressure that may compromise survey accuracy. Accompanying the report, “Nursing Homes: Addressing the Factors Underlying Understatement of Serious Care Problems Requires Sustained CMS and State Commitment,” is a document with additional information regarding the feedback the GAO received from nursing home surveyors and state agency directors. The second report, “Nursing Homes: Opportunities Exist to Facilitate the Use of the Temporary Management Sanction,” notes that the federal temporary management sanction has been used successfully by some states where there was some combination of immediate jeopardy, a history of noncompliance with CMS quality requirements, or the failure of other sanctions to bring about compliance. Several obstacles to using federal temporary management were identified, however, including time constraints, a lack of qualified temporary managers, and inadequate funding to pay for a temporary manager. In response, the GAO recommends that CMS: (1) create and maintain lists of qualified temporary managers; (2) identify best practices, such as when and how to use the sanction; and (3) develop guidance for states to help ensure the longer-term compliance of homes that have undergone temporary management. 

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The GAO has issued a report entitled "Medicaid: Ongoing Federal Oversight of Payments to Offset Uncompensated Hospital Care Costs Is Warranted." The GAO’s review found that, among other things, certain states with large supplemental payments for uncompensated care costs did not calculate correctly the hospital-specific disproportionate share hospital (DSH) payment limits. In the report, the GAO recommends that CMS ensure that states account for all Medicaid payments, including non-DSH supplemental payments, when calculating payment limits.

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This post was written by Paul Sheives.

A recent GAO report points to improvement in FDA’s postmarket drug safety oversight, but the agency expresses concern over continued gaps in particular areas. The GAO recommended that FDA develop a plan and timeline for transferring additional regulatory authorities from the Office of New Drugs to the Office of Surveillance and Epidemiology. FDA comments regarding the report were generally supportive, but the agency is hesitant to commit to any timelines.

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The Government Accountability Office (GAO) has issued a report entitled “Medicare: CMS Working to Address Problems from Round 1 of the Durable Medical Equipment Competitive Bidding Program.” In this report, the GAO notes that while the first round of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program (CBP) in 2007-2008 could have resulted in substantial savings if it had not been halted by Congress, there were significant problems with the bidding process. For instance, GAO noted that CMS repeatedly clarified its policies during the bidding window, and the information CMS provided to suppliers about bidding requirements was sometimes unclear and inconsistent, particularly regarding financial documentation. CMS also did not effectively notify suppliers that losing bids could be reviewed, so some suppliers missed this opportunity to address bids that had been incorrectly disqualified. The GAO also found several problems with the electronic bid submission system, including data losses from automated logouts and unscheduled downtimes, which made it difficult for some suppliers to submit bids. CMS has taken steps to improve the bidding process for the current round 1 rebid, according to the GAO, including certain safeguards that were mandated by Congress and a new electronic bidding submission system. The GAO’s only recommendation is that if CMS decides to conduct reviews of disqualified bids, it should notify all suppliers of this process; CMS agreed.

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A recent Government Accountability Office (GAO) report, "Centers for Medicare and Medicaid Services: Deficiencies in Contract Management Internal Control Are Pervasive,” raises concerns that CMS contract management practices “increase the risk of improper payments or waste.” Among other things, based on the GAO’s review of a sample of 2008 CMS contract actions, the GAO concluded that least 84.3% of FY 2008 contract actions contained at least one instance where a key control was not adequately implemented (such as ensuring project officers certify invoices for payment). These deficiencies were due in part to a lack of agency-specific policies and procedures to help ensure proper contracting expenditures. The GAO also charges that CMS did not fully implement recommendations GAO made in 2007 to improve internal control over contracting and payments to contractors. The report warns that “continuing weaknesses in contracting activities and limited progress in addressing known deficiencies will continue to put billions of taxpayer dollars at risk of improper payments or waste.” The GAO makes 10 recommendations for developing policies to improve oversight and strengthen CMS’s control environment.  

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This post was written by Paul Sheives.

FDA is authorized to approve applications based on clinical trials that demonstrate a new drug’s impact on a “surrogate endpoint,” or laboratory measure or physical sign used as a substitute for a clinical endpoint. When FDA approves a drug based on a surrogate endpoint under an accelerated approval process, a sponsor must, as a condition of approval, conduct postmarketing confirmatory studies to validate that a drug’s impact on a surrogate endpoint also leads to clinical benefits. Responding to concerns raised about FDA’s reliance on surrogate endpoints and its oversight of postmarketing studies, the GAO issued a report that (1) identified drugs approved based on surrogate endpoints; (2) obtained the status of related postmarketing studies; and (3) reviewed FDA’s oversight of a sample of 35 studies it required under its accelerated approval process, selected to include studies at varying levels of completion.  According to the GAO, although FDA has authority to expedite the withdrawal of a drug from the market if a sponsor does not complete a required confirmatory study with due diligence, or if a study fails to confirm a drug’s clinical benefit, it has not specified the conditions that would prompt it to do so. The GAO notes that this authority has never been exercised by the agency, even when such study requirements have gone unfulfilled for nearly 13 years. The GAO report recommends that FDA clarify the conditions under which it would utilize its authority to expedite the withdrawal of drugs under its accelerated approval process, but FDA disagreed with the need to develop such clarifying guidance. 

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This post was written by Paul Sheives.

The GAO issued a report entitled "Oversight of Clinical Investigators: Action Needed to Improve Timeliness and Enhance Scope of FDA's Debarment and Disqualification Processes for Medical Product Investigators."   Among other things, the report raises concerns about the length of time associated with FDA disqualification proceedings. The GAO also found that FDA rules allow an investigator who is disqualified for conduct related to drugs or biologics to serve as an investigator for medical devices; likewise, an individual disqualified for conduct related to medical devices still may serve as a clinical investigator for drugs and biologics. In the report, the GAO recommends that the FDA Commissioner: pursue extending FDA’s debarment authority; extend disqualification to include drugs, biologics, and medical devices; and ensure the timely completion of debarment and disqualification proceedings.   FDA agreed with GAO’s recommendations.

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The GAO has issued a report on options for CMS to use in developing its program to provide physicians with confidential feedback on resources used to provide care to Medicare beneficiaries. Among other things, the report points out that while a literature review suggests that providing such feedback has no more than a moderate influence on physician behavior, “the potential influence of feedback from CMS on Medicare costs may be greater, in part because of the relatively large share of physicians’ practice revenues that Medicare typically represents.”

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The General Accounting Office (GAO) has issued a report entitled "Nursing Homes: CMS’s Special Focus Facility Methodology Should Better Target the Most Poorly Performing Homes, Which Tended to Be Chain Affiliated and For-Profit." In this report, the GAO provides an overview of the Special Focus Facility (SFF) program, which targets nursing homes with severe and persistent quality of care problems, and examines potential refinements to CMS’s methodology to more accurately identify the most poorly performing homes. The GAO recommends that CMS consider a home’s relative performance nationally when allocating SFFs across states and refine its methodology for the identification of SFFs. CMS generally agreed with the GAO’s recommendations.

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The GAO has issued a report entitled "Medicare Physician Services: Utilization Trends Indicate Sustained Beneficiary Access with High and Growing Levels of Service in Some Areas of the Nation." According to the GAO, Medicare beneficiaries experienced few problems accessing physician services in 2007 and 2008. The proportion of beneficiaries who received physician services and the number of services per beneficiary increased from April 2000 to April 2008. The GAO identified potentially over-served geographic areas of the country, in which certain physician services, such as advanced imaging and minor procedures, are performed more frequently despite similar beneficiary demographic characteristics.

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The Government Accountability Office (GAO) has issued a report entitled “Medicare Physician Payments:  Fees Could Better Reflect Efficiencies Achieved When Services Are Provided Together.” The report reviews steps CMS has taken to ensure that physician fees recognize efficiencies that occur when certain services are commonly furnished together, such as the CMS multiple procedure payment reduction (MPPR) policy for certain imaging and surgical services furnished together.  According to the GAO, expanding the MPPR to reflect efficiencies when nonsurgical, nonimaging services are provided together could save approximately one-half billion dollars annually.  Moreover, expanding the MPPR policy to reflect efficiencies in the physician work component of certain imaging services could cut payments by an estimated additional $175 million annually, the GAO notes.

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The Government Accountability Office (GAO) has issued a report entitled “Privacy and Security: Food and Drug Administration Faces Challenges in Establishing Protections for Its Postmarket Risk Analysis System.” The report focuses on the FDA’s Sentinel Initiative, a postmarket risk identification and analysis system based on electronic health data. Although the Sentinel system is still in the early planning stages, the GAO believes that the system will pose significant privacy and security challenges, including among other things: ensuring that appropriate legal mechanisms are established to protect privacy and implement security consistently across the Sentinel system; effectively informing the public of the program’s planned uses of their personal health information; ensuring that de-identified information is not re-identified; establishing adequate security controls to protect the personal health information associated with Sentinel; and establishing sufficient oversight and enforcement mechanisms to ensure that privacy and security requirements are consistently implemented. In the report, the GAO recommends that the Commissioner of FDA develop a plan, including milestones, for developing the Sentinel system and for addressing these privacy and security challenges.

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The Government Accountability Office (GAO) has issued a report entitled “End-Stage Renal Disease: CMS Should Monitor Effect of Bundled Payment on Home Dialysis Utilization Rates.” According to the GAO, the Medicare bundled payment system for ESRD services, which must be implemented by January 1, 2011 under the Medicare Improvements for Patients and Providers Act, could end up encouraging or discouraging home dialysis depending on how the bundle is structured. The GAO recommend that CMS establish formal plans to monitor the impact of bundled payments on access to home dialysis services; CMS concurred.

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The Government Accountability Office (GAO) is requesting the public’s help in identifying waste, fraud, abuse, or mismanagement associated with ARRA funds. Specifically, the GAO is urging private citizens, government workers, contractors, and others to report ARRA-related concerns to FraudNet, a hotline that processes allegations about federal agencies and federally funded programs. The ARRA requires GAO to issue bimonthly reviews of how selected states and localities are using funds. 

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The GAO has issued a report entitled “Medicare and Medicaid Participating Facilities: CMS Needs to Reexamine Its Approach for Funding State Oversight of Health Care Facilities.” The GAO identified a number of weaknesses in the health facility survey system, including state funding inequities, limited data on the impact of funding on facility oversight, and limited oversight of state spending. The GAO recommends that CMS broadly reexamine its current approach to funding and conducting surveys, and makes a number of specific suggestions for addressing identified these weaknesses. CMS concurred with most of the GAO’s recommendations.

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The GAO has issued a report entitled "Health-Care-Associated Infections: HHS Action Needed to Obtain Nationally Representative Data on Risks in Ambulatory Surgical Centers." The GAO examined the availability of data on HAIs in ASCs nationwide, and found that no current sources of data on HAIs in ASCs provide information on the extent of the problem nationwide. The GAO recommended a protocol for HHS to use to conduct recurring periodic surveys of randomly selected ASCs. CMS concurred with the recommendation.

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The GAO has issued a report entitled  “Nonprescription Drugs: Considerations Regarding a Behind-the-Counter Drug Class.” This report examines the pros and cons of establishing an additional class of nonprescription drugs that would be held behind the counter (BTC) but would require the intervention of a pharmacist before being dispensed, and issues that must be addressed before establishing such a drug class.

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The Government Accountability Office (GAO) has released a report entitled “Medicare: Improvements Needed to Address Improper Payments in Home Health.” The report examines the growth in Medicare home health spending and utilization linked to upcoding and other fraudulent practices, concentrating on a review of home health agencies (HHAs) in California, Florida, Louisiana, Nevada, Oklahoma, Texas, and Utah. The GAO recommends that CMS: consider verifying the criminal history of key officials named on an HHA enrollment application; provide additional information to physicians who's identification number was used to certify HHA plans of care; direct CMS contractors to conduct postpayment medical reviews on claims submitted by HHAs with high rates of improper billing identified through prepayment review; and issue rules to expand the types of improper billing practices that are grounds for revocation of billing privileges.

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The Government Accountability Office (GAO) has issued a report entitled “Dietary Supplements: FDA Should Take Further Actions to Improve Oversight and Consumer Understanding.” The GAO found that while FDA has taken some steps to identify and act upon safety concerns related to dietary supplements, several factors limit the agency’s ability to detect concerns and remove products from the market, including lack of mandatory recall authority and the difficult process of demonstrating significant or unreasonable risk for specific ingredients. The GAO recommends that the FDA request additional authority to oversee dietary supplements, issue guidance on new dietary ingredients and clarify the boundary between dietary supplements and foods with added dietary ingredients, and take steps to improve consumer understanding of dietary supplements. The FDA generally agreed with GAO’s recommendations.

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The Government Accountability Office (GAO) has issued a report entitled “High-Risk Series: An Update,” which identifies areas where federal programs are at risk of fraud, waste, abuse, and mismanagement. This biennial report highlights areas of continuing concern, including Medicare and Medicaid program management.  While the GAO points to certain improvements in Medicare program operations, it recommends further actions, such as monitoring beneficiary grievances; eliminating inappropriate payment incentives; safeguarding the program from payment errors; and addressing deficiencies in oversight of care quality in nursing homes and hospitals. The GAO also identified continued weaknesses in oversight of state Medicaid claims and supplemental payments, review of the budget neutrality of Medicaid demonstrations prior to approval, and the overall level of improper Medicaid payments. The GAO also adds a new high risk area this year focusing on the FDA’s ability to ensure the safety and efficacy of drugs, biologics, and medical devices. The GAO recommendations in this area address, among other things, foreign drug inspections, review of promotional materials, and presentation of clinical trial results by drug sponsors.

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The GAO has issued a report entitled "Medical Devices: FDA Should Take Steps to Ensure That High-Risk Device Types Are Approved through the Most Stringent Premarket Review Process." The GAO found that in fiscal years (FY) 2003 through 2007, as part of its premarket review, the FDA: (1) reviewed 13,199 submissions for class I and II devices via the 510(k) process, clearing 11,935 (90%) of these submissions; (2) reviewed 342 submissions for class III devices through the 510(k) process, clearing 228 (67%) of these submissions; and (3) reviewed 217 original and 784 supplemental PMA submissions for class III devices and approved 78% and 85%, respectively, of these submissions. Although Congress envisioned that class III devices would be approved through the more stringent PMA process, and the Safe Medical Devices Act of 1990 required that FDA either reclassify or establish a schedule for requiring PMAs for class III device types, the GAO concluded that this process remains incomplete. GAO found that in FYs 2003 through 2007, FDA cleared submissions for 24 types of class III devices through the 510(k) process. As of October 2008, four of these device types had been reclassified to class II, but 20 device types could still be cleared through the 510(k) process. FDA said it is committed to issuing regulations either reclassifying or requiring PMAs for the class III devices currently allowed to receive clearance for marketing via the 510(k) process, but it did not provide a time frame for doing so. The GAO recommends that FDA expeditiously take steps to issue regulations for class III device types currently allowed to enter the market via the 510(k) process by requiring PMAs or reclassifying them to a lower class. HHS agreed with the GAO’s recommendation.

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The GAO has released a report entitled "Medicare Advantage Organizations: Actual Expenses and Profits Compared to Projections for 2006." The GAO found that MA organizations reported earning average profits of 6.6% of total revenue in 2006, compared to projected profits of 4.1%, and they reported spending an average of 83.3% of total revenue on medical expenses compared to projections of 86.9%. The GAO points out that if MA organizations had more accurately projected both their revenues and expenses, they would have been able to provide beneficiaries with additional benefits or cost-sharing reductions, and still maintain the level of profits projected. In a separate report, "Medicare Advantage: Characteristics, Financial Risks, and Disenrollment Rates of Beneficiaries in Private Fee-for-Service Plans," the GAO found that beneficiaries in private fee-for-service (PFFS) plans in April 2007 tended to be healthier and generally younger than beneficiaries in other MA plans. Moreover, Medicare PFFS beneficiaries may have faced certain financial risks if they did not contact their plan before receiving services that generally were not assumed by beneficiaries in other MA plans and Medicare FFS.  The GAO also found that some PFFS plans were inappropriately using the term prior authorization in their informational materials when such plans were not permitted to deny service coverage due to lack of prior plan approval. The GAO observes that CMS guidance on this issue has been inconsistent and sometimes incorrect. Finally, the GAO found that from January through April 2007, beneficiaries in PFFS plans disenrolled at an average rate of 21% compared to 9% for other MA plans, and while CMS has not complied with statutory requirements to mail disenrollment rates to Medicare beneficiaries. GAO recommends that CMS (1) investigate the extent to which PFFS beneficiaries face unexpected costs for not contacting their plan before receiving care, (2) ensure that CMS guidance on prior authorization reflects CMS policy, and (3) mail MA plan disenrollment rates to beneficiaries, as required by statute, and update rates on Medicare’s web site.  

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The GAO has issued a report entitled “Biosafety Laboratories: Perimeter Security Assessment of the Nation's Five BSL-4 Laboratories.”. For this report, the GAO conducted a physical security assessment of the nation’s five biosafety level (BSL) 4 labs, which handle the world’s most dangerous agents and diseases. Based on findings of inconsistent levels of protection against unauthorized intrusions, the GAO recommends that the Director of the Centers for Disease Control and Prevention (CDC) adopt specific perimeter control requirements for all BSL-4 labs. HHS indicated that further study is required prior to additional regulation. 

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On October 22, 2008, the Government Accountability Office (GAO) issued a report entitled "Drug Safety: Better Data Management and More Inspections Are Needed to Strengthen FDA's Foreign Drug Inspection Program." Among other things, the GAO found that: FDA databases contain inaccurate information on foreign establishments subject to inspection; FDA inspects relatively few foreign establishments each year to assess the manufacturing of drugs currently marketed in the United States; and FDA’s identification of serious deficiencies has led foreign establishments to take corrective actions, but inspections to determine continued compliance are not always timely. The GAO recommends that FDA improve the data that it uses to manage its foreign inspection program, conduct more inspections of foreign establishments, and ensure more timely inspection of foreign establishments where FDA has identified serious deficiencies. HHS agreed that FDA should conduct more foreign inspections, and discussed other FDA oversight initiatives, such as database improvements.

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The Government Accountability Office (GAO) has issued a report examining the FDA’s advisory committee processes. Specifically, the GAO examined: (1) how FDA recruited individuals for membership and evaluated candidates for potential conflicts of interest, (2) barriers that were reported to recruiting qualified individuals to serve on committees, and (3) the proportion of standing and temporary members, and the frequency with which members with conflict of interest determinations participated in meetings. 

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The GAO has issued a report entitled “Nonprofit Hospitals: Variation in Standards and Guidance Limits Comparison of How Hospitals Meet Community Benefit Requirements.” The GAO found that Internal Revenue Service (IRS) standards allow nonprofit hospitals broad latitude to determine the activities that constitute community benefit, and state tax-exempt/nonprofit status rules also vary substantially.   While consensus generally exists regarding how charity care, unreimbursed costs of means-tested government health care programs, and certain other activities qualify as community benefit, there is no consensus defining bad debt and unreimbursed Medicare costs as community benefit. This lack of consensus and differences in measuring charity care and unreimbursed government health care program costs lead to substantial differences in the amount of community benefits hospitals report. The GAO recommends that federal and state policymakers and industry groups continue to address the variability in defining and measuring community benefit activities.

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A new Government Accountability Office (GAO) report reviews the impact of a Deficit Reduction Act of 2005 (DRA) provision capping Medicare fees for certain imaging services covered by the physician fee schedule at the rate for these services under Medicare’s hospital outpatient prospective payment system (OPPS). The GAO found that the OPPS cap reduced the fee for the performance of about one in four physician imaging tests overall in 2007, and fees for advanced tests were more likely than other imaging tests to be paid at the OPPS rate. Moreover, the GAO found that from 2000 through 2006 both expenditures for and utilization of Medicare physician imaging services increased, but in 2007 expenditures declined while per-beneficiary utilization continued to rise.  

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The GAO has issued a report entitled “Health-Care-Associated (HAI) Infections in Hospitals:  An Overview of State Reporting Programs and Individual Hospital Initiatives to Reduce Certain Infections." The report looks at (1) the design and implementation of state HAI public reporting systems, (2) hospital initiatives to reduce MRSA infections, and (3) the experience of certain early-adopting hospitals in overcoming challenges to implement such initiatives. 

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The Government Accountability Office (GAO) has issued a report on Medicare Part D low-income subsidies (LIS) and low-income beneficiary access to state and manufacturer drug programs. In brief, the GAO found that in 2006 and 2007, assets and income were both important factors in LIS denials, but income was of greater importance. The GAO also reports that the availability and extent of state and drug manufacturer low-income Medicare beneficiary prescription assistance programs are uneven. State Pharmaceutical Assistance Programs are available in 23 states, but differ in the type and extent of assistance they offer with beneficiaries’ out-of-pocket prescription drug costs. Prescription drug manufacturers’ Patient Assistance Programs (PAP) also assist low-income individuals in obtaining prescription drugs, but not all PAPs are open to Part D beneficiaries, and the drugs provided are limited to those of the sponsoring manufacturers.

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The Government Accountability Office (GAO) has issued a report examining (1) the extent to which certain Medicare Part D drug plan sponsors have implemented programs to control fraud, waste, and abuse, and (2) the extent of CMS’s oversight of Part D plan sponsors’ programs to control fraud, waste, and abuse. The GAO concluded that five of the largest Part D plan sponsors’ had not completely implemented all of CMS’s required compliance plan elements and selected recommended measures for Part D fraud and abuse programs. Moreover, CMS oversight of Part D sponsors’ fraud and abuse programs has been limited. The GAO recommends that CMS conduct timely audits of Part D sponsors’ fraud and abuse programs, and CMS concurred.

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The Government Accountability Office (GAO) has issued a report entitled "Medicare: Covert Testing Exposes Weaknesses in the Durable Medical Equipment Supplier Screening Process."  The GAO set up two fictitious durable medical equipment (DME) companies using undercover names and bank accounts, and the fictitious companies eventually were approved for Medicare billing privileges despite having no clients and no inventory. CMS acknowledged that the covert tests illustrate gaps in oversight that still require improvement, and agency reiterated its intention to strengthen the entire supplier enrollment process.

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