On February 24, 2015, the HHS Office of Inspector General (OIG) released its “Health Reform Oversight Plan” for FY 2015, which describes the OIG’s current and planned efforts to oversee the implementation and management of HHS programs under the ACA. The plan outlines the OIG’s key tactical considerations (e.g., assessing relative risks; monitoring emerging issues and trends, conducting reviews, and addressing allegations of fraud); identifies primary focus areas, both in the health insurance Marketplaces and in other ACA-related HHS programs; and sets forth target timeframes for issuing reports on reviews related to the Marketplaces. While the report focuses on audits and evaluations, the OIG notes that it is prepared for and engaged in law enforcement operations related to ACA programs.
The OIG has issued a report on its findings that Medicare in some cases continued to make payments to physicians who have delinquent Medicare debts that have been referred to Treasury for collection. For instance, CMS paid a total of $10.7 million to 23 individual physicians who collectively owed CMS a total of $8.84 million. The OIG recommended that CMS take a series of steps to ensure that it does not pay individual physicians with delinquent debts after referring their Medicare debts to Treasury for collection; CMS concurred. For more information, see the full report, “CMS Made Payments Associated With Providers After Referring Individual Providers' Debts to the Department of the Treasury for Collection.”
The OIG has issued another report examining the safety of compounded sterile preparations (CSPs) used in hospitals, in response to a 2012 meningitis outbreak caused by contaminated injections. This report, "Medicare’s Oversight of Compounded Pharmaceuticals Used in Hospitals," assesses the extent to which Medicare's oversight of hospitals addresses 55 practices for CSP oversight in acute-care hospitals recommended by various expert guidelines. While CMS and the four CMS-approved hospital accreditors addressed most of the recommended CSP-related practices at least some of the time, the OIG identified certain gaps, particularly with regard to review of hospital contracts with stand-alone compounding pharmacies. The OIG also questioned the human capital available by oversight entities to thoroughly review hospitals' preparation and use of CSPs, and the adequacy of surveyor training related to compounding. The OIG recommends that CMS: (1) ensure that hospital surveyors receive training on standards from nationally recognized organizations related to safe compounding practices; and (2) amend its interpretive guidelines to address hospitals' contracts with standalone compounding pharmacies. CMS concurred with the recommendations.
OIG Report: Medicare Payments for Power Mobility Device Claims that Did Not Meet Physician Face-To-Face Exam Rules
As a condition of Medicare coverage for power mobility devices (PMDs), a physician must conduct and document a face-to-face examination of the beneficiary and write a prescription for the PMD. CMS established an optional Healthcare Common Procedure Coding System (HCPCS) code, G0372, for a physician to report the need for a PMD. Based on a review of a limited sample of claims (200 total), the OIG determined that while PMD claims with a corresponding physician G-code claim generally conformed with requirements for face-to-face examinations of beneficiaries, almost half of the 100 PMD claims without a corresponding physician G-code claim did not meet the face-to-face examination requirement. On the basis of its sample results, the OIG estimates that Medicare paid approximately $35.2 million in 2010 for PMD claims that did not meet federal requirements. The OIG recommends that CMS, among other things, adjust the sampled claims representing overpayments to the extent allowable; require physicians to use the G0372 code when prescribing PMDs; and educate physicians on the use of the G0372 code and the documentation requirements for face-to-face examinations. The report, “Medicare Paid Suppliers for Power Mobility Device Claims That Did Not Meet Federal Requirements for Physicians' Face-to-Face Examinations of Beneficiaries,” is available at http://oig.hhs.gov/oas/reports/region9/91202068.pdf.
The HHS Office of Inspector General (OIG) estimates that CMS made $4.6 million in incorrect Medicare outpatient payments to hospitals for established patients’ clinic visits in 2012. According to the OIG, hospitals attributed the incorrect payments to staff making clerical and programing errors, not verifying whether the patient was registered as an inpatient or outpatient of the hospital within the past 3 years (and thus considered an established rather than new patient), not following hospital procedures, not fully understanding Medicare billing requirements for clinic visits, and relying on the code that the treating physician billed for that visit. The OIG also observes that CMS does not have edits in place to identify Medicare payments for patients who were already registered at a facility. The OIG recommends that CMS work with its Medicare administrative contractors to recover identified incorrect payments and resolve additional potential overpayments to the extent feasible. For more information, see the full report, “CMS Did Not Always Correctly Make Clinic Visit Payments to Hospitals During Calendar Year 2012.”
The OIG recently issued a report that examined the extent to which Quality Improvement Organizations (QIOs) duplicate other CMS hospital quality improvement efforts, particularly Hospital Engagement Networks (HENs) and the Community-Based Care Transitions Program (CCTP). Based on a questionnaire sent to a random sample of 410 Medicare hospitals, more than half of responding hospitals reported that that they participated with QIOs on quality improvement projects in 2013, but the majority also worked with other federally-funded and non-federally-funded entities on the same topics. The OIG observes that the overlap in the CMS quality improvement efforts raises concerns about duplication of efforts and complicates attributing quality improvements to any one effort. The OIG therefore recommends that CMS: (1) take steps to coordinate and reduce overlap between the QIO program and CMS’s other quality improvement efforts; and (2) determine the relative contribution of each of its quality improvement efforts. CMS concurred with the recommendations, which were set forth in the report, “Quality Improvement Organizations Provide Support to More Than Half of Hospitals but Overlap with Other Quality Improvement Programs.”
The OIG has defended its hospital compliance review policies in response to objections raised by the American Hospital Association (AHA). Specifically, a January 15, 2015 OIG letter addresses four main areas of AHA concern about the OIG’s application of Medicare rules and policies: (1) the need for a physician order, (2) the treatment of canceled surgeries, (3) the rebilling of Medicare Part A claims under Part B, and (4) the review of claims beyond the statute of limitations. While the OIG letter cites legal authorities supporting its policies, the OIG did announce that given the “dynamic landscape” of Medicare inpatient short-stay policy, it has voluntarily suspended reviews of inpatient short-stay claims after October 1, 2013, consistent with the moratorium placed on the recovery audit contractors.
Today the OIG issued a report examining the growing use of Medicare hospice care in the assisted living facility (ALF) setting. According to the OIG, Medicare payments for hospice care in ALFs grew by more than 119% from 2007 to 2012, compared to a 38% increase in spending for hospice care provided in other settings. The OIG also reports that hospices provided care for longer periods and received higher Medicare payments for beneficiaries in ALFs compared to other settings, even though hospice beneficiaries in ALFs often had diagnoses that typically require less complex care. The median amount Medicare paid for-profit hospices for care in ALFs during the five-year period was $18,261 per beneficiary, compared to $13,941 for nonprofit hospices. The OIG contends that its findings suggest that the current payment system includes financial incentives that could encourage hospices to target beneficiaries in ALFs.
The OIG recommends that CMS take its findings into account as CMS undertakes hospice reforms mandated by the Affordable Care Act (ACA). Specifically, the OIG recommends that CMS: (1) reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays, (2) target certain hospices for review, (3) establish claims-based quality measures, (4) make hospice data publicly available for beneficiaries, and (5) educate hospices regarding how they compare to their peers. CMS concurred with these recommendations.
The OIG recently assessed the appropriateness of claims submitted by providers for screening for, diagnosing, evaluating, or treating cataracts, wet age related macular degeneration (wet AMD), and glaucoma in 2012. The OIG estimates that Medicare paid $22 million for ophthalmology claims in 2012 that were potentially inappropriate, according to national and local coverage requirements, although the OIG cautions that it did not review the medical records for any claims to determine if exceptions to the coverage requirements were documented and appropriate. The OIG recommends that CMS strengthen claims processing edits, and determine the appropriateness of ophthalmology claims identified in the report, and take appropriate action. CMS concurred with the recommendations in the report, “Medicare Paid $22 Million in 2012 for Potentially Inappropriate Ophthalmology Claims.”
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.