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

The OIG has issued a report entitled “Recovery Audit Contractors' Fraud Referrals.” By way of background, CMS contracts with recovery audit contractors (RACs) to identify improper payments of Medicare Part A and Part B claims, and they receive contingency fees based on the amount of improper payments identified. While RACs are not responsible for reviewing claims for fraudulent activity, they are responsible for referring any cases of potential fraud they identify to CMS. In its review, the OIG found that RACs referred only two cases of potential fraud to CMS during the period of March 2005 through March 2008, while CMS reported receiving no potential fraud referrals from RACs during this period. The OIG notes that RACs do not receive contingency fees for such fraud cases, which may serve as a disincentive for RACs to refer cases of potential fraud to CMS. The OIG recommended that CMS: (1) determine the outcomes of the two referrals made during the demonstration project, (2) implement a system to track fraud referrals, and (3) require RACs to receive mandatory training on the identification and referral of fraud. CMS concurred with the recommendations.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled "Average Sales Prices: Manufacturer Reporting and CMS Oversight." According to the OIG, for each quarter under review, over 40% of manufacturers submitted average sales prices (ASP) late, but most submitted the data within 10 days after the deadline. The OIG observes that current CMS methods for recording ASP data, including the use of manual processes, "may inhibit efficiency and result in potential errors." In addition, almost one-fifth of labeler codes with ASP submissions were associated with manufacturers that were not actually required to provide these prices, and in some cases Medicare payment amounts were based solely on submissions from manufacturers that did not have rebate agreements in effect. According to the OIG, if these manufacturers chose not to report ASPs, CMS would be unable to calculate ASP-based Medicare payment amounts for these drugs. In the report, the OIG recommends that CMS (1) develop an automated system for collecting ASP data, and (2) seek a legislative change to require all manufacturers of Part B-covered drugs to submit ASPs. CMS concurred with the first recommendation, but did not agree to seek a such legislative change at this time. In a separate report, “Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2008," the OIG noted that in 2008, the ASP for 80 HCPCS codes exceeded average manufacturer prices (AMP) by at least 5% in one or more quarters. If reimbursement amounts for these 80 codes had been lowered to 103% of the AMP, as is authorized by the statute, it would have reduced Medicare expenditures by almost $22 million. The OIG recommends that CMS develop a process to adjust payment amounts based on the results of OIG's pricing comparisons (CMS concurred), and that CMS lower Medicare reimbursement amounts for drugs that meet the 5% threshold (CMS did not agree). CMS also outlined steps it is taking to address a third OIG recommendation – that CMS ensure that drug manufacturers are submitting the required AMP data in a timely manner.

• Email This
• Print
• Comments
• Trackbacks

The Social Security Act requires the HHS Office of Inspector General (OIG) to notify the HHS Secretary if the average sales price (ASP) for a particular drug exceeds the drug's average manufacturer price (AMP) by a threshold of 5%.  If that threshold is met, the Secretary is authorized to disregard the ASP for that drug and substitute the lesser of the widely available market price for the drug or 103% of the AMP. The OIG recently posted several reports identifying specific codes for which Medicare ASP exceeded the AMP by at least 5% during the period spanning the fourth-quarter of 2008 through the second quarter of 2009. The OIG estimates that if Medicare reimbursement for these codes had been based on 103 percent of AMP, Medicare expenditures would have been reduced by millions of dollars. In addition, the OIG points out that while it has issued more than a dozen reports comparing ASPs to AMPs, CMS has yet to make any changes to reimbursement as a result of its findings.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report entitled “Review of Medicare Payments for Selected Durable Medical Equipment Claims With the KX Modifier for Calendar Year 2006." According to the OIG, the KX modifier – which indicates that the supplier has the required documentation on file -- was not effective in ensuring that suppliers that submitted claims to Palmetto GBA in 2006 actually had the required supporting documentation on file. Based on a sample of 100 items, the OIG extrapolates that Palmetto GBA paid approximately $127 million to suppliers who did not have the required documentation on file for services in 2006. The OIG attributes these errors to ineffective edits that determined only whether the KX modifier was on the claim, but not whether the documentation actually was on file. The OIG made a series of recommendations to recover inappropriate payments and improve the effectiveness of the KX modifier.

• Email This
• Print
• Comments
• Trackbacks

The OIG has released two reports analyzing Medicaid payments for prescription drugs. The first report, ”Comparison of Medicaid Federal Upper Limit Amounts to Acquisition Costs, Medicare Payment Amounts, and Retail Prices,” concludes that the current method for setting federal upper limit (FUL) amounts results in “substantially inflated Medicaid payments for many drugs” compared to other prices in the marketplace, potentially costing the Medicaid program hundreds of millions of dollars per year. While the Deficit Reduction Act of 2005 (DRA) required that FULs be based on average manufacturer price (AMP), implementation of this policy was blocked by a federal injunction. Based on the OIG’s calculations, AMP-based FULs calculated under the DRA would significantly lessen the gap between FUL amounts and other prices. While the OIG notes that CMS’s options are limited by the injunction and legislative policy, the OIG nevertheless recommends that CMS continue to work with Congress to identify strategies that would lower “inflated” Medicaid payments for multiple-source drugs.  A second OIG report, “Outlier Average Manufacturer Prices in the Federal Upper Limit Program,” reviews CMS’s FUL outlier policy, under which CMS generally will exclude the lowest AMP from the FUL calculation if it is more than 60% below the second-lowest AMP. T he OIG examined 242 FUL drugs with AMPs that would have met CMS’s outlier criterion if the changes enacted by the DRA had been in effect for January 2008. The OIG identified potential problems with some of these outlier AMPs, including discrepancies in the unit of AMP submission, inaccuracies in reporting, and the inclusion of discontinued drug products. The report includes several recommendations for improving the accuracy of the outlier policy in future FUL calculations.

• Email This
• Print
• Comments
• Trackbacks

On January 13, 2010, the OIG released an update to its March 2003 Special Fraud Alert on Telemarketing by Durable Medical Equipment Suppliers. The Special Fraud Alert focuses on section 1834(a)(17) of the Social Security Act, which prohibits suppliers of DME, except under limited circumstances, from making unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of a covered item. It also highlights the OIG's concerns about possible telemarketing practices by DME suppliers through the use of independent marketing firms. In the updated version of the Alert, the OIG adds that it "has also been made aware of instances when DME suppliers, notwithstanding the clear statutory prohibition, contact Medicare beneficiaries by telephone based solely on treating physicians’ preliminary written or verbal orders prescribing DME for the beneficiaries." According to the OIG, the "physician’s preliminary written or verbal order is not a substitute for the requisite written consent of a Medicare beneficiary."  

• Email This
• Print
• Comments
• Trackbacks

A recent OIG report, “Adverse Events in Hospitals: Public Disclosure of Information about Events,” focuses on policies and practices associated with the public disclosure of hospital adverse event information, including mechanisms for protecting patient privacy. In the OIG review of 17 state adverse event reporting systems, eight Patient Safety Organizations overseen by AHRQ, and CMS Medicare claims data, the OIG found only limited public disclosure of information about adverse events (defined as harm experienced by a patient as a result of medical care). The OIG notes, however, that seven state systems disclosed more extensive information than others (e.g., analysis of the causes of adverse events, guidance for reducing future occurrences, and information about improvements made by hospitals), which can serve as models for other entities.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “Medicare Part B Services During Non-Part A Nursing Home Stays: Enteral Nutrient Pricing.” The OIG found that Medicare's fee schedule amounts for nutrients provided during non-Part A stays in 2006 exceeded prices available to nursing home suppliers and other purchasers by more than 50%. Consequently, the OIG recommends that CMS adjust Medicare fee schedule amounts for enteral nutrients to more accurately reflect supplier prices. CMS agreed with this recommendation. The agency also cited the resumption of the competitive bidding program and consideration of adjustment of the Medicare fee schedule for enteral nutrients, once sufficient data is available from the bidding process, as opportunities to address enteral pricing concerns.

• Email This
• Print
• Comments
• Trackbacks

According to a recent HHS Office of Inspector (OIG) report, "Aberrant Medicare Home Health Outlier Payment Patterns in Miami-Dade County and Other Geographic Areas in 2008," Miami-Dade County, Florida, was responsible for more Medicare home health outlier payments in 2008 than the rest of the country combined. Another 23 counties nationwide also exhibiting "aberrant" home health payment patterns, the OIG found. Among other things, the OIG reports that more than 85% of home health providers that received outlier payments of over $100,000 per beneficiary were located in Miami-Dade County, and outlier payments for claims with a primary diagnosis related to diabetes were eight times the national average in this area. The OIG recommend that CMS: (1) continue its efforts to cap individual home health provider annual outlier payments; (2) review and respond to providers with aberrant outlier payment patterns, and (3) continue with efforts to strengthen enrollment standards for home health providers. CMS concurred with the recommendations and noted it was taking regulatory steps to limit home health outlier payments.

• Email This
• Print
• Comments
• Trackbacks

 The OIG has issued a report on Midyear Formulary Changes in Medicare Prescription Drug Plans, which concludes that Part D drug plan sponsors and CMS are managing midyear formulary changes without major problems.  The OIG found that all drug plan sponsors made formulary changes in 2008, but the majority (64%) of these changes were positive (i.e., they added new drugs, reduced cost sharing, or removed utilization controls).  Of the changes that were more restrictive (which must be approved by CMS), 62% promoted generic drug substitution. According to the OIG, most plan sponsors met beneficiary notification requirements for formulary changes.

• Email This
• Print
• Comments
• Trackbacks

The OIG has released its Semiannual Report to Congress for the second half of FY 2009. The OIG reports savings and expected recoveries totaling $20.97 billion for all of FY 2009, including $16.48 billion in implemented recommendations, $4 billion in investigative receivables, and $492 million in audit receivables. The OIG also excluded 2,556 individuals and organizations from participation in federal health care programs in FY 2009. In addition, the OIG reported 671 criminal actions associated with crimes against HHS programs and 394 civil actions, including False Claims Act and unjust enrichment suits filed in federal district court, Civil Monetary Penalties Law settlements, and administrative recoveries related to provider self-disclosure matters. The report also includes a review of significant OIG accomplishments during the semiannual reporting period. The OIG also has released its summary of “Top Management and Performance Challenges in the Department of Health and Human Services for Fiscal Year 2009.” This annual report highlights potential challenges associated with management of the Medicare program, including the integrity of Medicare provider and supplier enrollment processes and payment methodologies, and vulnerabilities associated with fraud and abuse and quality of care concerns.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “How Grantees Manage Financial Conflicts of Interest in Research Funded by the National Institutes of Health.” The OIG identified a number of vulnerabilities in National Institutes of Health (NIH) grantee institutions' identification, management, and oversight of financial conflicts of interest. For example, 90% of grantee institutions rely solely on researchers' discretion to determine which of their significant financial interests are related to their research and are therefore required to be reported. The OIG also found that nearly half of grantee institutions do not require researchers to disclose specific amounts of equity or compensation, and researcher-submitted financial interest information is not routinely verified. The OIG also found problems with documentation supporting grantee institutions’ oversight of financial conflicts of interest; failure of the majority of grantee institutions to have policies and procedures that address subgrantee compliance with financial conflicts of interest regulations; inconsistent reporting of conflicts; and the lack of a requirement that grantee institutions report to NIH any financial interests that they have with outside companies. According to the OIG, the most common type of financial conflict of interest among researchers is equity ownership in companies in which the financial interests could significantly affect the research. Other financial conflicts of interest among researchers involved inventing technology, consulting, or holding positions with outside companies. The OIG recommended a series of steps address such financial conflicts of interest, including strengthened grantee institution reporting and oversight requirements, the development of NIH guidance on methods to verify researchers' financial interests, and expanded NIH oversight and regulations addressing financial conflicts of interest.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report examining the extent to which Medicare Drug Integrity Contractors (MEDICs) identify Medicare Part D prescription drug fraud and abuse. The OIG found that 87% of potential incidents identified by the MEDICs in FY 2008 were identified through external sources, such as complaints, rather than proactive methods such as data analysis. According to the OIG, the MEDICs’ use of innovative techniques for data analysis was hampered by problems with accessing and using Medicare prescription drug event and Part B data, along with the MEDICs lack of authority to directly obtain information from downstream entities such as pharmacies, pharmacy benefit managers, and physicians. The OIG made a series of recommendations to improve the MEDICs’ access to accurate and comprehensive data, some of which would require statutory and/or regulatory changes.

• Email This
• Print
• Comments
• Trackbacks

A recent OIG report examines the extent to which practitioners have reassigned Medicare benefits – a mechanism by which Medicare practitioners allow third parties to bill and receive payment for services that they rendered. The OIG found 37% of the Medicare reassignments in 2007 should not have been active (usually because the practitioners were no longer employed by the party to which their reassignments were made). The OIG recommends that CMS: (1) implement its plans to revalidate practitioner enrollment information, (2) educate practitioners on the need to provide current information, (3) implement plans to update Provider Enrollment, Chain, and Ownership System (PECOS) from other data sources, and (4) follow up with practitioners for whom payments were made through reassignments that should not have been active. In response, CMS discussed steps it is taking to address these issues.  

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “Renal Dialysis Facilities’ Dosage Protocols for Administering Erythropoiesis-Stimulating Agents.”  The report, which was requested by members of Congress, found that 93% of Medicare-certified dialysis facilities had established protocols in place for administering erythropoiesis-stimulating agents (ESA). While only 56% of these protocols explicitly state a target hemoglobin range, 94% of those that did were consistent with the boxed warning on FDA-approved labeling and the Medicare benefit policy for ESAs. The OIG pointed out that since almost half of the dialysis facilities either did not have protocols or did not specify a target hemoglobin range in their protocols, the OIG cannot determine whether these facilities’ policies target the hemoglobin range consistent with FDA labeling.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “Adverse Event Reporting for Medical Devices.” According to the OIG, the FDA’s Center for Devices and Radiological Health (CDRH) does not use adverse event reports in a systematic manner to detect and address safety concerns about medical devices. Specifically, CDRH has not documented follow-up on adverse events, it does not consistently read adverse event reports for the first time in a timely manner, and it rarely acts when manufacturers and user facilities submit reports late. The OIG recommends that FDA develop a clear protocol for reviewing adverse event reports, including: documenting follow-up on adverse events, documenting that CDRH is meeting its own guidelines for reviewing high-priority adverse event reports, following up with manufacturers who routinely submit reports late or with incomplete information, and enhancing outreach strategies to reduce user facility underreporting. The OIG also recommends that FDA seek legislative authority to eliminate the requirement that user facilities submit annual reports. The FDA agreed with the OIG’s recommendations.

• Email This
• Print
• Comments
• Trackbacks

The OIG has released the Health Care Fraud and Abuse Control (HCFAC) Program Annual Report for FY 2008. The HCFAC program is designed to coordinate federal, state and local law enforcement activities focused on health care fraud and abuse. Among other things, the report announces that the federal government won or negotiated approximately $1 billion in health care fraud judgments and settlements in FY 2008. Including the FY 2008 recoveries, the HCFAC account has returned over $13.1 billion to the Medicare Trust Fund since the program began in 1997. Also during FY 2008, U.S. Attorneys' Offices opened 957 new criminal health care fraud investigations, and federal prosecutors had a total of 1,600 health care fraud criminal investigations pending. There were 588 defendants convicted for health care fraud-related crimes during the year. With regard to civil cases, the Department of Justice opened 843 new civil health care fraud investigations and had 1,311 civil health care fraud investigations pending at the end of the fiscal year.

• Email This
• Print
• Comments
• Trackbacks

HHS has announced efforts to reduce Medicare fraud by preventing identity theft, featuring a new OIG brochure with tips for beneficiaries on protecting their personal information, avoiding common fraud schemes, and monitoring key documents (medical bills, Medicare summary notices and explanations of benefits, and credit reports).

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued two reports on electronic prescribing (e-prescribing) in the Medicare Part D program. First, a report entitled "Medicare Part D E-Prescribing Standards: Early Assessment Shows Partial Connectivity" discusses the extent to which Part D plan sponsors have implemented Part D e-prescribing standards promulgated by CMS. Based on a survey of all plan sponsors between August and September 2008, nearly 80% of plan sponsors reported at least partial plan-to-prescriber connectivity, but few reported complete connectivity. Most plan sponsors had complete plan-to-dispenser connectivity. A second report, "Medicare Part D Plan Sponsor Electronic Prescribing Initiatives,” found that plan sponsors have launched voluntary e-prescribing initiatives to increase prescriber adoption of e-prescribing. As of September 2008, more than a third of sponsors had implemented or planned such initiatives, which included such components as free or discounted software, hardware, training, internet connectivity, or financial incentives. Some sponsors who implemented such initiatives reported an increase in generic substitutions and formulary compliance. 

• Email This
• Print
• Comments
• Trackbacks

An OIG report on Medicare Advantage Organization (MAO) beneficiary appeals found that MAOs make the vast majority of “organization determinations” (expedited reviews of benefit determinations) in favor of beneficiaries, with very few denials. Of the few denials that were appealed by beneficiaries, more than half were overturned by the MAO. At the second level of appeal, Independent Review Entities (IRE) overturned about one in five adverse MAO decisions. The OIG noted potential concerns regarding the low rate of beneficiary appeals, problems with timeliness in processing adverse expedited determinations, and the higher IRE overturn rate of expedited cases. 

• Email This
• Print
• Comments
• Trackbacks

The OIG has released its FY 2010 Work Plan, which outlines the audit, inspection, and investigative initiatives the OIG intends to conduct this year. The plan includes reviews affecting a wide range of Medicare and Medicaid-covered items and services. 

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued two reports regarding Medicare hospice services for beneficiaries in nursing facilities based on a sample of 2006 claims. The first report concentrates on Medicare coverage requirements for hospice services in nursing facilities. Based on its review, the OIG concludes that 82% of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement, and Medicare paid approximately $1.8 billion for these claims. The OIG recommends that CMS provide more education and guidance to hospices and strengthen monitoring in this area. The second report outlines the types and frequency of hospice services provided to beneficiaries residing in nursing facilities.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report on “Medicare Part D Reconciliation Payments for 2006 and 2007." The OIG found that Part D sponsors owe $18 million to Medicare for the 2007 Part D payment reconciliation, compared to $4.4 billion that sponsors owed for 2006. Despite this improvement, the OIG asserts that sponsors continue to submit inaccurate bids and make large unexpected profits. The OIG recommends that CMS: (1) ensure that sponsors' bids more accurately reflect their costs of providing the benefit to Medicare beneficiaries, (2) hold sponsors more accountable for bid inaccuracies, (3) determine whether changes to the risk corridors are appropriate, (4) determine whether alternative methodologies would better align payments with sponsors' costs for the low-income cost-sharing and reinsurance subsidies, and (5) follow up with the sponsors that owe funds for 2006.

• Email This
• Print
• Comments
• Trackbacks

An OIG report on “Beneficiary Utilization of Albuterol and Levalbuterol Under Medicare Part B” examines shifts in physician prescribing patterns that coincided with changes in CMS reimbursement policy. The OIG urges Congress and CMS to consider the impact of new coding and reimbursement decisions on prescribing practices. In particular, the OIG notes that such policies could “limit access to a potentially more effective product” or drive utilization “toward a more expensive product that offers no clinical advantage.” The OIG states that it will continue to monitor drug utilization and payment policies to identify inappropriate Medicare payments.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued two reports on pandemic influenza preparedness. The first report determines the extent to which selected states and localities have prepared for a medical surge in response to an influenza pandemic and have conducted and documented exercises that test their medical surge preparedness. The OIG found that while progress is being made, more needs to be done to improve states' and localities' ability to respond to an influenza pandemic. The second report, which examines vaccine and antiviral drug distribution and dispensing, again concludes that while the majority of selected localities had begun planning to distribute and dispense vaccines and antiviral drugs, more needs to be done to improve localities' ability to respond to an influenza pandemic. 

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report on “Power Wheelchairs in the Medicare Program:  Supplier Acquisition Costs and Services.”  According to the OIG, Medicare paid almost four times the average amount paid by suppliers to acquire standard power wheelchairs during the first half of 2007.  Specifically, Medicare paid suppliers an average of $2,970 beyond the suppliers' acquisition cost to perform an average of five services and cover general supplier business costs.  Medicare paid almost two times the average supplier acquisition cost for complex rehabilitation power wheelchair packages during this period, with Medicare paying suppliers an average of $5,627 beyond the suppliers' acquisition cost to perform an average of seven services and cover general business costs.  The OIG recommends that CMS determine whether Medicare's standard and complex rehabilitation power wheelchair fee schedule amounts should be adjusted by using information from competitive bidding, seeking legislation to ensure that fee schedule amounts are reasonable, or by using its inherent reasonableness authority.  CMS concurred with the OIG’s recommendation, although it noted that it is not likely to use its inherent reasonableness authority until the results of the supplier bids for power wheelchairs under the competitive bidding program have been assessed.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report on “Payments for Ambulance Transportation Provided to Beneficiaries in Skilled Nursing Stays Covered Under Medicare Part A in Calendar Year 2006.” The OIG concluded that ambulance suppliers did not always comply with skilled nursing facility (SNF) consolidated billing requirements in calendar year 2006, resulting in an estimated $12.7 million in potential overpayments.  The OIG recommends that CMS recover the overpayments, provide additional guidance for ambulance suppliers and SNFs, and either establish additional claims edits or post-payment reviews to prevent and detect overpayments.  CMS concurred with the recommendations. 

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has posted its Semiannual Report to Congress for October 1, 2008–March 31, 2009. The OIG’s expected recoveries for this period include $274.8 million in audit-related receivables and $2.2 billion in investigative-related receivables (which includes nearly $552 million in non-HHS receivables resulting from OIG work, such as states’ share of Medicaid restitution). Also during this period, the OIG reported exclusions of 1,415 individuals and organizations for fraud or abuse involving federal health care programs and/or their beneficiaries; 293 criminal actions involving crimes against HHS programs; and 243 civil actions, including False Claims Act and unjust enrichment suits, CMP Law settlements, and administrative recoveries related to provider self-disclosure matters.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) reports that in 2006, Medicare inappropriately paid a total net $178 million (out of $466 million) for chiropractic services that reviewers determined to be maintenance therapy, miscoded, or undocumented. The OIG recommends that CMS take a number of steps to address continuing vulnerabilities in this area, including implementing a new modifier for chiropractic claims to indicate the start of a new episode and/or a cap on allowed chiropractic claims. CMS also should ensure that chiropractic claims are not paid unless documentation requirements are met. 

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has posted its first Monthly Recovery Update Report providing an accounting of steps the OIG is taking to safeguard ARRA funding, such as review of HHS agency spending plans and development of grant audit guides. It also outlines planned OIG activities, including audits of state use of increased Federal Medical Assistance Percentage spending and audits of agency grant award processes.

• Email This
• Print
• Comments
• Trackbacks

According to a new OIG review, Medicare spent an average of five times more per beneficiary on inhalation drugs in South Florida compared to the rest of the country, with the greatest spending differences attributable to the more expensive brand name drugs levalbuterol and budesonide. In addition, three-fourths of South Florida beneficiaries receiving budesonide frequently exceeded coverage guidelines set forth in local coverage policy. The OIG recommends that CMS ensure that its contractors are enforcing the coverage guidelines for inhalation drugs, eliminate Medicare’s vulnerability to potentially fraudulent or excessive inhalation drug claims in South Florida, and review and act on cases where the DME supplier appears to be fraudulently billing Medicare for inhalation drugs.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled "Nursing Home Corporations Under Quality of Care Corporate Integrity Agreements."  The OIG reviewed all nursing homes that were placed under CIAs between June 2000 and December 2005, and found that all 15 corporations enhanced quality of care structures and processes while under their CIA and cited positive effects of the CIA, although challenges were encountered when implementing the CIA requirements. All 15 corporations had written policies and procedures regarding quality of care, codes of conduct, and training required by their CIAs; monitored their quality of care using standardized data, internal self-assessment tools, and by tracking complaints; and created or expanded their compliance infrastructures to integrate quality of care. Based on the report’s findings, areas that OIG will explore for its oversight of future CIAs include: responding swiftly to noncompliant corporations and those that fail to address quality problems; including in the CIAs specific requirements for documentation of nursing home Quality Assessment and Assurance activities; and sharing lessons learned by corporations and quality monitors with other corporations placed under subsequent CIAs.

• Email This
• Print
• Comments
• Trackbacks

On March 24, 2009, the HHS Office of Inspector General (OIG) released an “Open Letter to Health Care Providers” announcing refinements to the OIG's Self-Disclosure Protocol. In order to more effectively allocate resources, the OIG will no longer accept disclosure of a matter that involves only liability under the physician self-referral law in the absence of an anti-kickback violation. The OIG cautions that while it is narrowing the scope of the disclosure protocol for resources purposes, providers should “not to draw any inferences about the Government’s approach to enforcement of the physician self-referral law.” Moreover, the OIG is establishing a $50,000 minimum settlement amount for kickback-related submissions accepted into the self-disclosure protocol after March 24, 2009. The OIG will continue to analyze the facts and circumstances of each disclosure to determine the appropriate settlement amount.

• Email This
• Print
• Comments
• Trackbacks

The OIG has added a new “Recovery Act Fund Oversight” section to its website. The OIG is responsible for assessing whether HHS is using $135 billion in American Recovery and Reinvestment Act (ARRA) funds in accordance with legal and administrative requirements and is meeting the Office of Management and Budget's accountability objectives. The new section of the website outlines the OIG's initial plans and provides links to related websites. For instance, the web site notes that the OIG will be examining CMS's plan for temporarily increasing the Medicaid Federal Medical Assistance Percentage and the controls in place to ensure that the increase is implemented as intended by the ARRA.

• Email This
• Print
• Comments
• Trackbacks

The OIG has released a report entitled "Comparison of Prices for Negative Pressure Wound Therapy Pumps," which asserts that Medicare is overpaying for NPWT pumps. Among other things, the OIG found Medicare reimbursement for NPWT pumps is more than four times the average price paid by suppliers, which makes pumps “vulnerable to fraud, waste, and abuse." The OIG recommends that CMS use its inherent reasonableness authority to reduce the reimbursement amount for NPWT pumps and include pumps in DMEPOS competitive bidding. CMS also should educate suppliers of new pump models on the importance of communication with beneficiaries' treating clinicians and follow up on potentially-inappropriate claims. CMS generally concurred with the recommendations.

• Email This
• Print
• Comments
• Trackbacks

The OIG has released a report from an event it cosponsored with the Health Care Compliance Association (HCCA) in November 2008 on “Driving for Quality in Acute Care: A Board of Directors Dashboard," the sixth roundtable collaboration between OIG and HCCA. Participants at the government-industry roundtable included representatives from hospital systems, trade associations, and government. The meeting focused on how hospital boards of directors can use information dashboards, or scorecards, as a tool to promote quality of care in their institutions. The discussions included information on best practices for tracking measures of quality, safety, customer satisfaction, and financial and employee performance. Participants also offered suggestions for increasing accountability for quality outcomes and stressed the importance of promoting transparency of quality of care information. The full report is available here.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report on “Hospital Compliance With Medicare's Postacute Care Transfer Policy During Fiscal Years 2003 Through 2005.” Under the postacute care transfer policy, Medicare pays full prospective payments to hospitals that discharge inpatients to their homes, but for patients with certain diagnoses, payments to the hospital are reduced for discharges to certain post-acute care settings (such as skilled nursing facilities). The OIG estimated that hospitals improperly coded 15,051 claims as discharges to home rather than transfers to post-acute care, resulting in $24.8 million in overpayments. The OIG noted, however, that claims edits adopted by CMS in 2004 significantly decreased these types of overpayments. A separate OIG review examined “Medicare Payments to Managed Care Plans on Behalf of Deceased Enrollees.” The OIG found that CMS paid approximately $4.4 million to Medicare Advantage plans for coverage periods after the enrollees' months of death, although CMS had correctly stopped payments for the vast majority of the deceased enrollees.

• Email This
• Print
• Comments
• Trackbacks

The HHS OIG has released a report entitled "Effect of the Part D Coverage Gap on Medicare Beneficiaries Without Financial Assistance in 2006." The OIG found that 7% of Part D beneficiaries entered the coverage gap and did not receive financial assistance with prescription drug costs in 2006.  During the coverage gap, 69% of beneficiaries decreased the average number of drugs they purchased, which could have resulted from beneficiaries trying to reduce their financial burden during the coverage gap, or from appropriate reductions due to changes in beneficiaries' health status.  The greater the average number of drugs per month that beneficiaries purchased before entering the coverage gap, the more they reduced the average number of drugs per month that they purchased during the coverage gap. The OIG recommends that CMS support outreach and education activities targeted at beneficiaries who make more prescription drug purchases before entering the coverage gap.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued its quarterly report comparing Medicare Part B drug average sales prices (ASPs) and AMPs, this one comparing second-quarter 2008 ASPs and AMPs and reviewing the impact on Medicare reimbursement for fourth quarter 2008. The OIG identified a total of 31 HCPCS codes with ASP that exceeded AMP by at least 5% in the second quarter of 2008. If reimbursement amounts for these 31 codes had been based on 103% of the AMPs, Medicare expenditures would have been reduced by $3.5 million during the fourth quarter of 2008. The OIG notes that it could not compare ASPs and AMPs for 68 drug codes because AMP data were not submitted; the OIG will continue to work with CMS to evaluate and pursue appropriate actions against manufacturers that fail to submit required data.

• Email This
• Print
• Comments
• Trackbacks

The has OIG issued a report entitled "Comparing Pharmacy Reimbursement: Medicare Part D to Medicaid." The OIG found that Part D and nationwide Medicaid pharmacy reimbursement amounts for most of the single-source drugs that the OIG reviewed were similar; however, Medicaid reimbursement amounts for the multiple-source drugs reviewed were typically higher than the Part D amounts. The OIG notes that it compared only the amount reimbursed to pharmacies by Part D and Medicaid; the OIG did not compare total program expenditures or examine the impact of rebates or post-point-of-sale price concessions. Moreover, in a review of five states, the OIG found that Medicaid and Part D ingredient cost reimbursement amounts were similar for single-source drugs, but the average Medicaid ingredient costs exceeded the average Part D ingredient costs for most multiple-source drugs under review. In addition, Medicaid dispensing fees were substantially higher than average Part D dispensing fees for both the single-source and multiple-source drugs under review.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “Medicare Payments in 2007 for Medical Equipment and Supply Claims with Invalid or Inactive Referring Physician Identifiers.” The OIG reports that Medicare allowed almost $34 million in 2007 for medical equipment and supply claims with physician identification numbers that had never been issued or had been deactivated by CMS, including $5 million for claims with dates of service after the referring physicians had died. The OIG recommends that CMS take a number of steps to promote the accurate and appropriate use of physician identifiers, and CMS concurred with the recommendations.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report entitled “Medicaid and Medicare Home Health Payments for Skilled Nursing and Home Health Aide Services.” The OIG found that Medicaid and Medicare both may be paying for the same home health services as a result of complex payment policies for services provided to dually-eligible beneficiaries and lack of clarity in the Medicare coverage policy regarding billing for unskilled and skilled nursing services. Based on a five-state review, the OIG concluded that Medicaid paid nearly $2 million for skilled nursing and home health aide services that were vulnerable to also being paid by Medicare. The OIG suggests that CMS could consider methods to better integrate Medicaid and Medicare claims processing to prevent duplicate payments. CMS also could clarify the Medicare Benefit Policy Manual to explain that unskilled services provided during a skilled nursing visit paid under the Medicare home health prospective payment system (PPS) are included in the PPS payment.

• Email This
• Print
• Comments
• Trackbacks

The OIG has reviewed the operations of the Office of Medicare Hearings and Appeals (OMHA) , which is responsible for the third level of the Medicare administrative appeals process. The OIG found that OMHA’s caseload has increased between the 2005/2006 and 2007/2008 timeframes, but OMHA has improved the timeliness of its decisions and the quality of the data in the appeals system. 

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report on “The Food and Drug Administration's Oversight of Clinical Investigators' Financial Information,” which concludes that clinical investigators may not be disclosing all financial interests. The OIG found that only 1% of clinical investigators disclosed a financial interest, and the FDA cannot determine whether sponsors have submitted financial interest information for all clinical investigators. Further, FDA's oversight of such information is lacking, since: almost half of marketing applications were missing financial interest information; FDA reviewers did not document a review of financial interest information in almost one-third of marketing applications; and neither FDA nor sponsors took action to minimize potential bias in 22% of marketing applications with a disclosed financial interest. The OIG recommends that FDA ensure that sponsors submit complete financial information for all clinical investigators; use a review template and provide reviewer training; and require sponsors to submit financial information as part of the pretrial application process. While the FDA generally agreed with the recommendations, it did not agree to require sponsors to submit the financial information during the pretrial application process.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report on the top management and performance challenges facing the HHS. Key areas identified by the OIG include: Medicare Part D oversight (including drug pricing and rebates, fraud and abuse safeguards, and access to accurate information); Medicare integrity (including DME fraud and competitive bidding); Medicare Advantage; Medicaid and State Children’s Health Insurance program integrity (including prescription drug fraud and pharmacy reimbursement); quality of care (including pay-for-performance, “never events,” and transparency of ownership and performance); emergency preparedness and response; oversight of food, drugs, and medical devices (including food safety and security, drug and medical device safety, and transparency of provider financial interests); grants management; integrity of information systems and the implementation of health information technology; and ethics program oversight and enforcement.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report comparing first-quarter 2008 average sales prices (ASPs) and average manufacturer prices (AMPs) and associated Medicare reimbursement for the third quarter of 2008. In the report, the OIG identified 41 HCPCS drug codes with ASPs that exceeded AMP by at least 5 percent in the first quarter of 2008. If reimbursement amounts for these 41 codes had been based on 103 percent of the AMPs, Medicare expenditures would have been reduced by $7.8 million during the third quarter of 2008 alone. The OIG could not compare ASPs and AMPs for 76 HCPCS codes because of missing AMP data; the OIG is working with CMS to evaluate and pursue appropriate actions against those manufacturers that fail to submit required data.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued three reports on adverse events in hospitals, defined by the OIG as harm to a patient as a result of medical care. The first report, “Adverse Events in Hospitals: Overview of Key Issues,” identifies a number of areas integral to understanding the landscape of adverse events in hospitals, including the difficulty of measuring the incidence of adverse events, the importance of nonpayment policies for adverse events, barriers to adverse event reporting, legal concerns associated with public disclosure; and slow adoption of adverse event prevention recommendations. A second report, “Adverse Events in Hospitals: State Reporting Systems,” found that 26 states operated adverse event reporting systems as of January 2008. State strategies include legal protections to prevent improper disclosure, monetary penalties for failing to report, and feedback to hospitals about reported events. While specific reportable events and reporting criteria vary, most states use reported data in similar ways to hold individual hospitals accountable for their patient care performance and to promote learning and prevent adverse events. Finally, in “Adverse Events in Hospitals: Case Study of Incidence Among Medicare Beneficiaries in Two Selected Counties,” the OIG found that 13% of hospitalized Medicare beneficiaries in two selected counties experienced one of the four most serious categories of adverse events. The OIG notes that while “the results of this review are not nationally representative, the extent of adverse events and temporary harm found in this case study substantiates concerns about the incidence of adverse events in hospitals and the importance of safety initiatives to reduce occurrences.” The OIG will continue his work in this area.  

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report comparing Part B drug average sales prices (ASPs) and average manufacturer prices (AMPs) for 2007. By way of background, under section 1847A(d)(3) of the Social Security Act, the OIG must notify the HHS Secretary if the ASP for a particular drug exceeds the drug's AMP by a threshold of 5%. If that threshold is met, the Secretary is authorized to disregard the ASP for that drug and substitute the lesser of the widely available market price for the drug or 103 percent of the AMP. To date, OIG has issued seven quarterly reports comparing ASPs to AMPs, but CMS has not yet adjusted reimbursement as a result of OIG's findings. In the new report, the OIG identified 71 Medicare Part B drug codes that would have been eligible for price adjustment if a revised payment methodology recently implemented by CMS had been in effect throughout 2007 (other codes may also have been eligible but AMP amounts were not available). The OIG recommends that CMS develop a process to adjust payment amounts based on the results of OIG's pricing comparisons, lower Medicare reimbursement amounts for drugs that meet the 5-percent threshold, and ensure that drug manufacturers are submitting the required AMP data in a timely manner. CMS generally agreed to develop a process for adjusting payment amounts, but did not specifically agree to lower Medicare reimbursement for drugs that meet the 5-percent threshold.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled “Comparing Special Needs Plan Beneficiaries to Other Medicare Advantage Prescription Drug Plan Beneficiaries.” The OIG found that Special Needs Plan (SNP) beneficiaries filled an average of 11% more prescriptions than other Medicare Advantage Prescription Drug Plan (MA-PD) beneficiaries, and the average annual prescription cost per SNP beneficiary was 49% higher compared to that of other MA-PD beneficiaries. On the other hand, SNP and other MA-PD beneficiaries were similarly exposed to potentially inappropriate drug pairs that could lead to adverse drug events. The OIG recommends that CMS take steps to help physicians and pharmacists prevent inappropriate drug pairs. Separately, the Government Accountability Office (GAO) has issued a report entitled "Medicare Part D: Opportunities Exist for Improving Information Sent to Enrollees and Scheduling the Annual Election Period" Sponsors, pharmacists, beneficiary advocates, and counselors GAO interviewed expressed concern that CMS’s model Annual Notice of Change (ANOC) for the 2008 annual election period (AEP) did not effectively communicate drug plan changes to enrollees. In addition, although CMS and plan sponsors made improvements to the enrollment process, CMS data showed that about 15% of beneficiaries who chose to switch plans in the 2008 AEP were not fully enrolled in their new plan by January 1. To improve the AEP, the GAO recommends that CMS review alternative formats to communicate plan changes. Additionally, Congress should consider authorizing the HHS Secretary to amend the AEP schedule to include a processing interval between the end of the AEP and the effective date of new coverage. CMS concurred with the GAO recommendations.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has released the Health Care Fraud and Abuse Control (HCFAC) Program Annual Report for FY 2007.  The HCFAC program is designed to coordinate federal, state and local law enforcement activities focused on health care fraud and abuse. Among other things, the report announces that the federal government won or negotiated approximately $1.8 billion in health care fraud judgments and settlements in FY 2007. Also during that period, U.S. Attorneys' Offices opened 878 new criminal health care fraud investigations, and federal prosecutors had a total of 1,612 health care fraud criminal investigations pending. A total of 560 defendants were convicted for health care fraud-related crimes during the year. With regard to civil cases, the Department of Justice opened 776 new civil health care fraud investigations and had 743 civil health care fraud investigations pending at the end of the fiscal year.

• Email This
• Print
• Comments
• Trackbacks

The OIG has posted its Semiannual Report to Congress for the period of September April 1, 2008 - September 30, 2008. The OIG reported savings and expected recoveries of more than $20.4 billion for all of FY 2008, including $16.72 billion in implemented recommendations, $1.33 billion in audit receivables, and $2.35 billion in investigative receivables. In FY 2008, OIG excluded 3,129 individuals and organizations from participation in federal health care programs. In addition, OIG reported 775 criminal actions brought against individuals or organizations that engaged in crimes against HHS programs and pursued 342 civil actions, which include False Claims Act and unjust enrichment suits, Civil Monetary Penalties Law settlements, and administrative recoveries related to provider self-disclosure matters. The report also includes a review of major enforcement actions and policy recommendations for the second half of FY 2008.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued an “early alert memo” on “Payments to Medicare Suppliers and Home Health Agencies Associated With ‘Currently Not Collectible’ Overpayments.” The OIG’s review of a small sample of Texas DMEPOS suppliers with outstanding Medicare debt (e.g., unreturned Medicare overpayments) found that a majority of suppliers were associated with other Medicare suppliers or home health agencies, and that complete ownership/management information was not always provided in public records. According to the OIG, the results suggest that individuals associated with Medicare debt could inappropriately receive Medicare payments by omitting owner/manager information on their enrollment applications and working through other DMEPOS suppliers and HHAs. Because this initial review examined a small number of suppliers using a limited set of issue questions, OIG intends to conduct follow-up work regarding the vulnerabilities raised in this memorandum.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has issued a report entitled "Nationwide Review of the Centers for Medicare & Medicaid Services Health Insurance Portability and Accountability Act of 1996 (HIPAA) Oversight." By way of background, the HIPAA security rule requires health plans, providers, and other covered entities that transmit health information in electronic form to: (1) ensure the integrity and confidentiality of the information, (2) protect against any reasonably anticipated threats or risks to the security or integrity of the information, and (3) protect against unauthorized uses or disclosures of the information. The OIG found that CMS had no effective mechanism to ensure that covered entities adequately implemented the HIPAA security rule or that electronic protected health information was being adequately protected. The OIG recommended that CMS establish policies and procedures for conducting HIPAA security rule compliance reviews of covered entities. While CMS disagreed with the OIG’s findings, the agency agreed to establish policies for conducting compliance reviews.

• Email This
• Print
• Comments
• Trackbacks

The OIG and the Government Accountability Office (GAO) have issued several reports regarding the Medicare Part D drug program. In a report entitled “Medicare Drug Plan Sponsors' Identification of Potential Fraud and Abuse,” the OIG recommends a number of steps to address fraud and abuse. For instance, the OIG calls on CMS to: review variances in potential fraud and abuse among plans; determine if Part D prescription drug plan (PDP) sponsors investigated and corrected potential abuses; and require PDP sponsors to report on their fraud and abuse programs. In a separate report, “Oversight of Prescription Drug Plan Sponsors' Compliance Plans,” the OIG found that CMS conducted only one focused audit and no routine audits of PDP sponsors’ compliance plans in 2007. Further, CMS did not verify sponsor’s responses to a compliance plan self-assessment. CMS agreed with an OIG recommendation that CMS conduct audits to verify that PDP sponsors' compliance plans meet regulatory and manual requirements. Additionally, an OIG report on "Centers for Medicare & Medicaid Services Audits of Medicare Part D Bids" found that one-quarter of all bid audits completed for plan years 2006 and 2007 identified at least one material finding, but CMS has not adjusted PDP sponsors’ bid amounts based on such findings. The OIG recommends that CMS hold plan sponsors more accountable for material findings identified in bid audits, and conduct the required number of financial audits in a timely manner. Finally, the GAO has reported on "Medicare Part D Prescription Drug Coverage: Federal Oversight of Reported Price Concessions Data." The GAO found that CMS has initiated about half of its planned detailed financial audits to examine Part D price concessions data for 2006, with the rest delayed due to financial constraints. The audits are expected to be completed by October 2009. CMS also pointed to variation in defining and reporting price concessions data, such as differences in how sponsors allocate manufacturer rebates between their Part D plans and other business, as likely creating oversight challenges.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled "South Florida Durable Medical Equipment Suppliers: Results of Appeals." The OIG followed up on a previous review that had led to the revocation of Medicare billing privileges for 491 suppliers that failed to meet Medicare supplier standards. The OIG found that nearly half of the revoked suppliers appealed the revocations, and billing privileges were restored for 91% of these suppliers. The OIG found that two-thirds of the suppliers whose billing privileges were reinstated subsequently had their privileges revoked again or inactivated, and some individuals connected to reinstated suppliers have been indicted. The OIG recommended that CMS strengthen the appeal process by developing criteria regarding the types of evidence required for hearing officers to reinstate suppliers' billing privileges; CMS agreed to consider establishing such guidelines.

• Email This
• Print
• Comments
• Trackbacks

On September 30, 2008, the OIG published supplemental compliance program guidance (CPG) for nursing facilities, targeting quality of care, billing issues, and kickback concerns that have arisen since the OIG’s original CPG for nursing facilities issued in 2000. The guidance is designed to help nursing facilities develop effective compliance programs by identifying operational areas that present potential liability risks under several key federal fraud and abuse statutes and regulations. With regard to quality of care, the supplemental CPG addresses staffing, resident care plans, medication management, appropriate use of psychotropic medications, and resident safety. The new CPG also highlights submission of accurate claims, including proper reporting of resident case-mix data, billing for therapy services and restorative and personal care services, and screening for excluded individuals and entities. In addition, the CPG identifies types of business arrangements that could implicate the anti-kickback statute, including those involving free goods and services or discounts; certain contracts with physicians, suppliers, and hospices; and reserve bed payments with hospitals. Other potential risk areas identified in the supplemental CPG include working with beneficiaries to select Medicare Part D plans, physician self-referrals, anti-supplementation rules, and compliance with HIPAA Privacy and Security Rules.  

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled "Trends in Nursing Home Deficiencies and Complaints." The study describes the nature and extent of nursing home deficiencies and complaints in 2007 and identifies trends from 2005 to 2007. According to the OIG, in each of the past 3 years, more than 91 percent of nursing homes surveyed were cited for deficiencies, particularly quality of care, resident assessment, and quality of life deficiencies. Additionally, 17 percent of nursing homes surveyed in 2007 were cited for actual harm or immediate jeopardy deficiencies, and 3.6 percent were cited for substandard quality-of-care deficiencies. The number of substantiated complaints decreased slightly (about 3 percent) since 2005.

• Email This
• Print
• Comments
• Trackbacks

On October 1, 2008, the HHS Office of Inspector General (OIG) released its FY 2009 Work Plan, which discusses planned OIG audit, inspection, and investigative initiatives affecting virtually every type of health care provider and supplier.

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has releaseda report entitled "Marketing Materials for Medicare Prescription Drug Plans." Among other things, the OIG found that CMS's oversight of marketing materials for stand-alone Medicare prescription drug plans is limited, the agency’s model documents are not consistent with its guidelines, and 85% of marketing materials failed to meet at least one element of CMS's guidelines.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report that examined Medicare Part B drug pricing when a new generic drug enters the market, based upon an examination of Medicare payment for irinotecan, an injectable cancer drug.  The FDA approved the first generic version of irinotecan on February 20, 2008. The OIG looked at the difference between the Medicare payment amount and manufacturer-reported sales prices during March 2008, when the generic version was available for purchase but yet reflected in the Medicare average sales price because of a two-quarter lag in the payment system. The OIG found that the Medicare payment amount for irinotecan was more than double the OIG-calculated average manufacturer sales price. The OIG noted that CMS’s current authority to address such payment disparities is limited, since time is needed for the OIG to collect payment data, and any resulting pricing changes would not take effect until the quarter after OIG provides the data to CMS. The OIG therefore recommends CMS explore alternative options to address pricing discrepancies arising from newly available generic drugs, which may include seeking a legislative change. CMS concurred with the OIG's recommendation.

• Email This
• Print
• Comments
• Trackbacks

A new OIG report raises questions about the effectiveness of CMS’s Comprehensive Error Rate Testing (CERT) program, along with the validity of CMS estimates of improper Medicare payments for durable medical equipment (DME).   Based on the CERT contractor's medical review, CMS had reported that the FY 2006 DME error rate was 7.5 percent, or about $700 million in improper payments. However, the OIG’s independent contractor’s reviews of beneficiaries’ medical records found errors in Medicare DME claims that CERT contractor had not identified and concluded that the estimated error rate for the FY 2006 CERT DME sample was actually 28.9 percent. The OIG attributes these review discrepancies to the CERT contractor’s reliance on clinical inference rather than additional medical records available from health care providers, CMS’s inconsistent policies regarding proof-of-delivery documentation, physicians’ lack of understanding of documentation requirements, and CMS’s lack of procedures for obtaining information on high-risk DME items from beneficiaries. The OIG recommends that CMS: (1) require the CERT contractor to review all available supplier documentation, (2) establish a written policy to address the appropriate use of clinical inference, (3) require the CERT contractor to review all medical records necessary to determine compliance with medical necessity requirements, (4) document oral guidance that conflicts with written policies, (5) instruct its Medicare contractors to provide additional documentation training to physicians, and (6) require the CERT contractor to contact beneficiaries named on high-risk claims to help determine whether the beneficiaries received the items and the items were medically necessary. CMS generally agreed with the OIG’s findings and recommendations. 

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has released a report comparing Medicare prescription drug average sales prices (ASPs) and average manufacturer prices (AMPs) for the fourth quarter of 2007. This is the OIG’s first pricing comparison since CMS implemented a revised volume-weighted ASP payment methodology mandated by the Medicare, Medicaid, and SCHIP Extension Act of 2007. Using CMS’s revised ASP payment methodology, the OIG identified 12 of 285 drug codes with ASPs that exceeded AMPs by at least 5 percent in the fourth quarter of 2007.  

• Email This
• Print
• Comments
• Trackbacks

The HHS Office of Inspector General (OIG) has released 10 new and revised State False Claims Act review letters.  The letters announce the OIG’s determination regarding whether states comply with section 6031 of the Deficit Reduction Act of 2005, which provides a financial incentive for states to enact false claims acts that establish liability to the state for the submission of false or fraudulent claims to the state's Medicaid program.

• Email This
• Print
• Comments
• Trackbacks

The OIG has issued a report entitled "Review of Medicare Part D Contracting for Contract Year 2006."  The report examines Medicare prescription drug plan (PDP) sponsors’ strategies for contracting with local, community pharmacies to provide Part D prescription drugs to Medicare beneficiaries. The pharmacies and their pharmacy services administrative organizations reported experiencing problems related to PDP sponsors’ network development methods, standard terms and conditions, extended-day supply terms, negotiations, and network requirements and contracting requirements. The OIG provided a number of recommendations related to contracting practices.

• Email This
• Print
• Comments
• Trackbacks

An OIG report entitled “Deficiency History and Recertification of Medicare Home Health Agencies”  found that 15 percent of home health agencies (HHA) repeated the same deficiency citation on three consecutive surveys, most often related to patient plans of care. To improve CMS oversight of HHAs, the OIG recommends that CMS use existing survey data to identify patterns of deficiency citations and at-risk HHAs and implement intermediate sanctions.

• Email This
• Print
• Comments
• Trackbacks

Certain retroactive payment increase provisions in MIPPA result in increased beneficiary copayment amounts for certain items and services furnished from July 1 through July 14, 2009. As a result, beneficiaries who already paid or were billed for cost-sharing amounts based on lower prices temporarily in effect are liable for additional cost-sharing amounts. On July 24, 2008, the OIG issued a policy statement assuring suppliers and providers affected by retroactive rate increases that they will not be subject to OIG administrative sanctions if they waive retroactive beneficiary cost-sharing amounts attributable to those increased payment rates (subject to certain conditions). The policy impacts the following types of items and services: physician fee schedule services; certain DMEPOS in the initial bidding areas; brachytherapy sources and therapeutic radiopharmaceuticals under the outpatient prospective payment system; and ambulance services. Note, however, that suppliers and providers are not required to waive retroactive beneficiary liability, and they may instead choose to bill the beneficiary for the additional copayment obligation. 

• Email This
• Print
• Comments
• Trackbacks