The OIG has issued a report entitled “Access to Care: Provider Availability in Medicaid Managed Care,” which found that more than half of Medicaid managed care providers could not offer appointments to Medicaid enrollees, and one third could not be found at the location listed by the plan. The OIG observed that there could be long waits for appointments at those providers who offered appointments; while the median wait time was two weeks, 10% had wait times longer than two months. Primary care providers were less likely to offer an appointment than specialists, but specialists tended to have longer wait times. The OIG notes that access to care has taken on heightened importance as enrollment grows in Medicaid managed care programs. The OIG therefore urged CMS to work with states to (1) assess the number of providers offering appointments and improve the accuracy of plan information, (2) ensure that plans' networks are adequate, and (3) ensure that plans are complying with existing state standards and assess whether additional standards are needed. CMS concurred.
The OIG has issued its Semiannual Report to Congress for the period of April 1 – September 30, 2014, in which it highlights significant investigation, audit, and enforcement activities and achievements across HHS programs during the six-month period and for all of FY 2014. The OIG reports expected recoveries exceeding $4.9 billion during FY 2014, consisting of almost $834.7 million in audit receivables and about $4.1 billion in investigative receivables (including about $1.1 billion in non-HHS investigative receivables, such as states’ shares of Medicaid restitution). In FY 2014, the OIG also reported: exclusions of 4,017 individuals and entities from participation in federal health care programs; 971 criminal actions against individuals or entities; and 533 civil actions (including false claims and unjust-enrichment lawsuits filed in federal district court, CMP settlements, and administrative recoveries related to provider self-disclosure matters). In addition to discussing legal and investigative activities, the report recaps various reports issued by the OIG over the 6–month period. It also responds to public suggestions for new anti-kickback safe harbors related to hospital continuing medical education programs, clinical trial participant compensation, and contracts between clinically integrated networks (CINs) and commercial third party payors for value-based payments.
Based on a review of Prescription Drug Event (PDE) records for human immunodeficiency virus (HIV) drugs and other beneficiary records, the OIG determined that Medicare Part D paid for HIV drugs for over 150 deceased beneficiaries in 2012, most of which were dispensed by retail pharmacies. The OIG identified shortcomings in CMS claims edits that reject PDE records for drugs with dates of service more than 32 days after death that allowed payment for drugs that do not meet Medicare Part D coverage requirements. The OIG recommends that CMS eliminate or, if necessary for administrative processing, shorten the window in which it accepts PDE records for drugs dispensed after a beneficiary's death; CMS concurred. The OIG also observes that while its report focuses on HIV drugs, the issues raised are relevant to all Part D drugs.
OIG: Compendia Publishers Comply with Transparency Rules for Evaluating Anticancer Drugs, Identifying Potential Conflicts
Under current law, Medicare Parts B and D cover anticancer drugs for indications not approved by the FDA only if the drugs are supported by one or more of four authorized compendia. Publishers of these compendia must comply with statutory requirements to maintain transparent processes for evaluating anticancer drug therapies and identifying potential conflicts of interest. In a recent report, the OIG concludes that each of the four authorized compendia publishers complied with these requirements, although the number and nature of disclosures of potential conflicts of interest varied across publishers.
The OIG has released a report that examines the extent to which Medicare mail order market share for diabetes test strips changed after the start of national mail order competitive bidding for these items on July 1, 2013. According to the OIG, based on a sample of 1,210 claims, there was a somewhat greater concentration of market share three months after competitive bidding contracts went into effect compared to before bidding. Specifically, after competitive bidding was instituted, two types of test strips accounted for 44% of the Medicare mail order market share (up from 34%), three types made up 58% of the market share (up from 51%), and 10 types accounted for 91% (up from 75%). The OIG intends for CMS to use this information to evaluate the effect of the mail order bidding program on the types of diabetes test strips available to beneficiaries, and to assess whether bidders have met their statutory obligations to demonstrate that their bids cover at least 50%, by volume, of all types of mail order diabetes test strips.
The OIG has released its compilation of “2014 Top Management & Performance Challenges,” highlighting the following 10 most significant management and performance challenges now facing HHS:
- Implementing, Operating, and Overseeing the Health Insurance Marketplaces
- Ensuring Appropriate Use of Prescription Drugs in Medicare and Medicaid
- Protecting an Expanding Medicaid Program from Fraud, Waste, and Abuse
- Fighting Waste and Fraud and Promoting Value in Medicare Parts A and B
- Ensuring Quality in Nursing Home, Hospice, and Home- and Community-Based Care
- The Meaningful and Secure Exchange and Use of Electronic Health Information
- Effectively Operating Public Health and Human Services Programs to Best Serve Program Beneficiaries
- Ensuring Effective Financial and Administrative Management
- Protecting HHS Grants and Contract Funds from Fraud, Waste, and Abuse
- Ensuring the Safety of Food, Drugs, and Medical Devices
The HHS OIG has posted its FY 2015 Work Plan, which summaries the audit, evaluation, and other legal and investigative initiatives that the OIG intends to conduct in the coming year. The OIG plans numerous reviews of CMS, FDA, and other HHS agency programs, with a particular focus on Medicare and Medicaid reimbursement and program integrity policies. The OIG also forecasts areas that may be the subject of review in future years, including emerging Affordable Care Act marketplace issues, Medicaid expansion, and new Medicare payment and delivery models, among others. The OIG also plans to expand its work on Medicare and Medicaid reimbursement (including Medicaid managed care) and quality of care. The OIG notes that other areas under consideration for new reviews include the integrity of the drug and medical device supply chains; the security of electronic data; the use and exchange of health information technology; and emergency preparedness and response efforts.
The OIG has issued a report on Medicare beneficiary copayment costs for outpatient services provided at critical access hospitals (CAH). Beneficiaries who receive services at CAHs pay Medicare coinsurance amounts based on CAH charges, in contrast to patients at acute care hospitals who are responsible for coinsurance amounts based on outpatient prospective payment system (OPPS) rates. According to the OIG report, “Medicare Beneficiaries Paid Nearly Half of the Costs for Outpatient Services at Critical Access Hospitals,” CAH charges are typically higher than the reasonable costs associated with CAH services or the OPPS rates that acute-care hospitals receive. The OIG estimates that Medicare beneficiaries paid nearly half the costs for outpatient services at CAHs in 2012 (approximately $1.5 billion of the estimated $3.2 billion cost for CAH outpatient services). The OIG recommends that CMS seek legislative authority to modify how coinsurance is calculated for outpatient services received at CAHs to reduce the percentage of costs paid by Medicare beneficiaries in coinsurance. For instance, CMS could consider (1) computing coinsurance so that it is based on interim payment rates rather than charges, and (2) processing claims for outpatient services at CAHs as if they were paid under OPPS for the purpose of calculating an OPPS equivalent coinsurance.
In a recent report, the OIG concluded that Medicare would have saved millions of dollars in 2011 if Medicare Part B prescription drug dispensing and supplying fees had been aligned with the rates paid by Medicare Part D plans or state Medicaid programs. Specifically, if Part B dispensing and supplying fees had been the same as average Part D rates in 2011, Part B would have saved $110.9 million, while use of average state Medicaid rates would have saved $106.3 million. The OIG recommended that CMS issue regulations to decrease Part B dispensing and supplying fees to rates similar to those of other payers, such as Part D and Medicaid. CMS did not concur with the OIG’s recommendation, and requested that the OIG study actual costs associated with dispensing these Part B drugs. For additionl information, see the full report, “Medicare Part B Prescription Drug Dispensing and Supplying Fee Payment Rates Are Considerably Higher than the Rates Paid by Other Government Programs."
The OIG continues to fault CMS for failing to issue final regulations – authorized by the Balanced Budget Act of 1997 (BBA) – to enforce the location requirements for rural health clinics (RHCs). By way of background, facilities can be designated as RHCs and qualify for enhanced Medicare and Medicaid reimbursement if they are: (1) located in rural areas and (2) located in areas that have a shortage of health care providers. The BBA allows CMS to terminate of RHCs that no longer met the location requirements as long as they are not determined to be "essential provider" RHCs, but CMS has not issued regulations to allow RHCs to apply as essential provider RHCs. The OIG determined that about 12% of RHCs no longer met the location requirements in 2013 (a 56% increase since 2003, when the OIG last examined this issue). The Medicare program and its beneficiaries paid approximately $132 million to these RHCs in 2012. The OIG points out that these providers they should continue to qualify as RHCs only if they are determined to be essential providers. In order to ensure that CMS can enforce the BBA provisions relating to RHCs, the OIG recommends that CMS issue regulations to enable RHCs determined to be essential providers to remain certified as RHCs. CMS thanked OIG for “their efforts on this issue,” but declined to commit to issuing regulations.
The OIG has issued a report evaluating state standards for access to care for Medicaid managed care program enrollees, an issue which the OIG notes has taken on heightened importance as enrollment in such programs grows. Based on a review of the 33 states with comprehensive, "full risk" Medicaid managed care, the OIG concluded that state standards for access to care vary widely. For example, state standards for primary care providers range from one primary care provider for every 100 enrollees to one provider for every 2,500 enrollees. The OIG also pointed out varying state strategies to assess compliance with access standards, and noted that most states did not identify any violations of such standards over a five-year period. The OIG recommend that CMS: (1) strengthen its oversight of state standards, including ensuring that states develop standards for key provider types; (2) strengthen its oversight of states' methods to assess access standard compliance; (3) improve states' efforts to identify and address violations of access standards; and (4) provide technical assistance to states. CMS concurred with the recommendations.
The OIG has created a “Spotlight” page on its internet site focusing on “Medicaid: State Policies that Result in Inflated Federal Costs.” The page compiles OIG reports that highlighted “State policies that distort the cost-sharing arrangement, causing the Federal Government to pay more than its share of Medicaid expenditures.” According to the OIG, such mechanisms do not increase benefits to beneficiaries, but they increase states' funds at the expense of the federal government. The OIG discusses steps that have been taken to close loopholes in this area, but it notes that more work remains. The OIG continues to recommend that CMS seek legislation to strengthen its ability to curb wasteful federal spending stemming from states claiming reimbursement for excessive payments.
The OIG has issued a report reviewing the extent to which Medicare- and Medicaid-certified nursing facilities comply with federal requirements related to reporting allegations of resident abuse or neglect. For the purposes of this report, the OIG uses the term “nursing facility” (NF) to refer to both Medicare skilled nursing facilities and Medicaid nursing facilities. Based on a sample of 250 NFs, the OIG estimates that:
- 85% of NFs reported at least one allegation of abuse or neglect to OIG in 2012. The OIG notes that for the purposes of this study, it did not determine whether the reported allegations were substantiated.
- 76% of NFs maintained policies that address federal regulations for reporting both allegations of abuse or neglect and investigation results.
- 61% of NFs had documentation supporting the facilities’ compliance with regulations under Section 1150B of the Social Security Act requiring NFs to (1) annually notify covered individuals (i.e., owners, operators, employees, managers, agents, or contractors of nursing facilities) of their obligation to report to the appropriate entities any reasonable suspicion of a crime, and (2) clearly post a notice specifying employees’ rights to file a complaint under Section 1150B.
- 53% of allegations of abuse or neglect and the subsequent investigation results were reported, as required.
The OIG recommends that CMS ensure that nursing facilities: (1) maintain policies related to reporting allegations of abuse or neglect; (2) notify covered individuals of their obligation to report reasonable suspicions of crimes; and (3) report allegations of abuse or neglect and investigation results in a timely manner and to the appropriate individuals.
A recent OIG report, “Medicaid Drug Rebate Dispute Resolution Could Be Improved,” focuses on the extent to which drug manufacturers and states disagree on the amount of money that manufacturers owe states in Medicaid rebates, and how such disputes are resolved. Most states providing data (29 of 31) estimated that only a small percentage of rebate dollars were disputed, such as when poor quality claims data leads to disputes regarding unit of measure conversions, physician-administered drugs, and ineligible drugs (e.g., drugs purchased under the 340B Drug Pricing Program and terminated drugs). States reported difficulties in providing data to resolve such disputes, and some state and manufacturer representatives expressed interest in greater CMS involvement in preventing and resolving disputes. To that end, the OIG recommends that CMS: work with states to improve the quality of claims data submitted by providers and pharmacies; help states obtain better data on ineligible drugs; facilitate states’ submission of standardized claims data, and establish a stronger role in dispute resolution.
The OIG has issued two reports on implementation of the ACA health insurance “Marketplaces.” The first report, “Marketplaces Faced Early Challenges Resolving Inconsistencies with Applicant Data,” looked at the extent to which the federal and state health insurance marketplaces ensured the accuracy of information submitted by insurance applicants, including information related to eligibility for premium tax credits and cost sharing reductions. According to the OIG, marketplaces were unable to resolve most data inconsistencies, particularly involving citizenship and income information (although the OIG cautions that inconsistencies do not necessarily indicate that incorrect information was provided or that financial assistance is inappropriate). The report recommends additional planning and oversight to resolve inconsistencies.
A related OIG report questions the effectiveness of internal controls implemented by the federal, California, and Connecticut marketplaces in ensuring that individuals were enrolled in qualified health plans (QHPs) according to federal requirements. In particular, the OIG identified deficiencies in internal controls that could limit the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining applicant’s eligibility for enrollment in a QHP. The OIG recommended steps to verify applicant data, determine enrollment and cost sharing assistance eligibility, and maintain and update enrollment data.
Finally, the GAO released a report that concentrates on contractor performance related to the Healthcare.gov portal. The GAO points cost increases and delayed system functionality for the federally facilitated marketplace that resulted from CMS’s lack of effective planning, changing requirements and oversight gaps. GAO recommends that CMS take immediate steps to address contract costs, acquisition strategies, and use of oversight tools. In its response to the report, CMS discussed improvements it was making in the management of the Marketplace (including a stronger CMS management structure, an improved structure of Marketplace contracts, and a strengthened acquisition workforce). CMS expressed confidence that “its contractors will deliver the needed capabilities for the 2015 open enrollment period in a timely and cost-efficient manner.”
The OIG has posted guidance on its contractor self-disclosure program, which provides a means for contractors to self-disclose potential violations of the False Claims Act and federal criminal laws involving fraud, conflict of interest, bribery, or gratuity. The Federal Acquisition Regulation (FAR) requires federal contractors with contracts valued over $5 million to disclose to the OIG when they have credible evidence of one of these violations. The guidance specifies that such self-disclosures are made with no advance agreement regarding possible OIG resolution and with no promises regarding potential Department of Justice action. The guidance, a disclosure form, and FAQs are available at the OIG web site.
The OIG attributes $32 million in Medicare Part D spending on HIV drugs in 2012 to claims associated with “questionable utilization patterns.” Specifically, nearly 1,600 Part D beneficiaries with HIV drug claims had no indication of HIV in their Medicare histories, received an excessive dose or supply of HIV drugs, received HIV drugs from a high number of pharmacies or prescribers, or received contraindicated drugs. The OIG observes that while some of this utilization may be legitimate, these patterns warrant further scrutiny, since they could indicate that a beneficiary is receiving inappropriate drugs or diverting drugs, a pharmacy is billing for drugs that the beneficiary did not receive, or a beneficiary’s identification number was stolen. The OIG recommend that CMS: expand sponsors’ drug utilization review programs and use of beneficiary-specific controls; expand the Overutilization Monitoring System to additional drugs; restrict certain beneficiaries to a limited number of pharmacies or prescribers and limit their ability to switch plans; increase monitoring of beneficiaries’ utilization patterns; and follow up on questionable utilization patterns.
According to an OIG report, “Questionable Billing for Medicare Part B Clinical Laboratory Services,” Medicare allowed $1.7 billion for clinical laboratory claims in 2010 associated with eight types of “questionable billing.” Such indicators of questionable billing identified by the OIG include: claims for beneficiaries with no associated Part B service with ordering physician; claims with beneficiaries living more than 150 miles from the ordering physician; duplicate lab tests; claims with ineligible or invalid ordering-physician numbers; claims with compromised beneficiary, ordering-physician, or lab provider number. More than 1,000 labs had unusually high billing for five or more measures of questionable billing for Medicare lab service, and almost half of these labs were located in California and Florida. The OIG notes that while “some of this billing may be legitimate, all labs that exceeded thresholds on five or more measures of questionable billing may warrant further scrutiny.” The OIG recommends that CMS: review the labs identified as having questionable billing and take appropriate action; review the effectiveness of existing program integrity strategies; and ensure that existing edits prevent claims with invalid and ineligible ordering-physician numbers from being paid. CMS concurred with these recommendations.
The OIG has issued a report entitled “Limitations in Manufacturer Reporting of Average Sales Price Data for Part B Drugs.” The OIG determined that at least one-third of 200 manufacturers did not submit required ASPs for some of their products in the third quarter of 2012, despite being required to do so, and another 45 manufacturers were not required to report ASPs because they have not signed a Medicaid drug rebate agreement (although 22 of these manufacturers voluntarily reported ASPs). In addition, the OIG asserts that inaccuracies in CMS’s ASP files may have affected Medicare payments for a small number of drugs. The OIG made a series of recommendations, including that CMS continue to work with OIG to identify and penalize manufacturers that do not meet ASP reporting requirements (CMS concurred). CMS did not agree with an OIG recommendation to seek a legislative change to directly require all manufacturers of Part B drugs to submit ASPs.
Today the HHS OIG issued a Special Fraud Alert highlighting its concerns regarding two trends involving transfers of value from laboratories to physicians that the OIG believes “present a substantial risk of fraud and abuse under the anti-kickback statute.” Specifically, the OIG details risks involved with certain compensation paid by laboratories to referring physicians and physician group practices for (1) blood specimen collection, processing, and packaging, and (2) submitting patient data to a registry or database. The Special Fraud Alert reiterates the OIG’s “longstanding concerns” when payments from laboratories to physicians exceed the fair market value of the physicians’ services or reflect the volume or value of referrals of federal health care program business. Reed Smith is preparing an analysis of the Alert.