A recent OIG report, "Medicare Nursing Home Resident Hospitalization Rates Merit Additional Monitoring,” examines the extent to which Medicare nursing home residents are hospitalized. The OIG found that in FY 2011, nursing homes transferred one quarter of their Medicare residents to hospitals for inpatient admissions in FY 2011, and Medicare spent $14.3 billion on these hospitalizations. Septicemia was the most common condition requiring the hospitalization of nursing home residents, and nursing homes located in Arkansas, Louisiana, Mississippi, and Oklahoma had the highest annual rates of resident hospitalizations. The OIG concludes that the higher-than-average resident hospitalization rates of some nursing homes in FY 2011 suggest that some hospitalizations could have been avoided through better nursing home care. The OIG recommends that CMS develop a quality measure that describes nursing home resident hospitalization rates and assess this measure during surveys of nursing homes. CMS concurs with OIG’s recommendations, and is already working on developing a hospitalization measure for all nursing home residents and a re-hospitalization measure for Medicare skilled nursing facility residents. CMS also concurs in adding these measurers to the quality measures surveyors review.
The HHS Office of Inspector General (OIG) has issued a report on variations in Medicare outlier payments made to acute hospitals under the inpatient prospective payment system (IPPS) during calendar years 2008 to 2011. According to the OIG, almost all hospitals received outlier payments, but some hospitals received a much higher proportion of Medicare IPPS reimbursements from outlier payments. Specifically, outlier payments averaged 12.8% of the Medicare IPPS reimbursement for 158 hospitals, compared to an average of 2.2% for all other hospitals. As a result, the high-outlier hospitals ended up charging Medicare substantially more for the same Medical Severity Diagnostic Related Groups (MS-DRG) provided in the subset of hospitals compared to other hospitals, even though their patients had similar lengths of stay. There were 16 specific MS-DRGs that accounted for 41% of such outlier payments. The OIG observed that high outlier charges could result from a hospital attracting a disproportionate share of exceptionally costly patients or applying costly technologies and treatments. Nevertheless, the OIG raised concerns about why charges for similar cases vary substantially across hospitals, and recommended that CMS: (1) instruct its contractors to increase monitoring of outlier payments, (2) publicly report hospital data regarding the distribution of outlier payments; and (3) examine whether MS-DRGs associated with high rates of outlier payments warrant coding changes or other adjustments. CMS concurred with the recommendations.
OIG Examines Inappropriate Medicare Payments on Behalf of Deceased or Unlawfully-Present Beneficiaries
According to the HHS Office of Inspector General (OIG), the Medicare program continues to make inappropriate payments on behalf deceased beneficiaries and beneficiaries who are unlawfully-present in the country. First, despite safeguards intended to prevent and recover Medicare payments made on behalf of deceased beneficiaries, Medicare inappropriately paid $23 million in 2011 for claims with service dates after beneficiaries' deaths. The majority of the improper payments were made under Medicare Part C. The OIG recommended a series of steps to improve payment safeguards in this area and to address providers and suppliers identified by the OIG with high numbers of claims with service dates after beneficiaries' deaths.
In a separate report, the OIG found that CMS did not adequately prevent Medicare Part D payment for unlawfully-present beneficiaries for calendar years 2009 through 2011. As a result, CMS inappropriately accepted 279,056 prescription drug event records submitted by Part D sponsors with unallowable gross drug costs totaling $29.0 million on behalf of 4,139 unlawfully-present beneficiaries. CMS used those records to make final payment determinations to sponsors. The OIG recommended that CMS resolve improper Part D payments made for drugs provided to unlawfully-present beneficiaries and take steps to develop and implement controls to prevent inappropriate payments in the future.
A recent OIG report links the growing presence of physician-owned distributorships, or PODs, to increased spinal surgery volumes and potentially increased Medicare costs. The OIG notes a “substantial presence” of PODs in the spinal device market, with PODs supplying spinal devices for 19% of the spinal fusion surgeries billed to Medicare in FY 2011. According to the OIG, hospitals that purchased devices from PODs performed more spinal surgeries in 2012 than hospitals that did not purchase from PODs, and hospitals increased the rate of growth in the number of spinal surgeries after they began purchasing from PODs. Hospitals identified surgeon preference as the strongest influence on their decisions to purchase spinal devices from PODs. The OIG also disagrees with PODs’ claims that their devices cost less than those from other suppliers; rather, in the categories examined by the OIG, the devices cost the same as or more than devices from companies not owned by physicians. This fact, coupled with increased volumes, according to the OIG, could increase overall Medicare costs over time. In addition, the OIG raises concerns about inconsistencies in hospital policies regarding physician disclosure of ownership to either hospitals or their patients of interests in PODs (although the OIG suggests that the new “Sunshine Act” disclosure rules may improve the ability of hospitals and patients to identify physicians’ investment in device companies). For a case urging an alternative perspective on PODs, see the report on our sister blog, http://www.lifescienceslegalupdate.com/, about a recent complaint filed in the U.S. District Court for the Central District of California that seeks a declaration that the OIG’s Special Fraud Alert on PODs unfairly and unconstitutionally burdens First Amendment rights of free speech and due process. The complaint defends the lawfulness of the physician-owned model, and characterizes the Fraud Alert as the result of a multi-year lobbying campaign by “Big Corporations” forced to compete with small physician-owned entities. For more details, see our full report.
The OIG has issued a consumer alert warning consumers about potential fraud related to enrollment in ACA Health Insurance Marketplaces. Among other things, the OIG cautions individuals about people asking for money to enroll the individual in the Marketplace or “Obamacare”; high-pressure solicitations; or requests for personal information. Likewise, HHS, the Department of Justice, and the Federal Trade Commission have launched an interagency initiative to prevent and, as necessary, prosecute consumer fraud and privacy violations in the ACA Marketplace.
This post was written by Nancy Sheliga.
In September 2013, the OIG issued a report on changes in the use of Medicare Part B ambulance transports from 2002 through 2011, including an analysis of the characteristics of beneficiaries, suppliers, and transports. The report found that between 2002 and 2011, the number of ambulance transports increased by 69%, payments for ambulance transports increased by 130%, and the number of beneficiaries who received ambulance transports increased by 34%. All of these increases were greater than the rates for Medicare Part B increases in general. Moreover, beneficiaries with end stage renal disease received a growing and disproportionate amount of transports, with dialysis-related ambulance transports increasing by 269%. In addition, beneficiaries receiving ambulance transport to outpatient visits for partial hospitalization program services at community mental health centers increased significantly. Overall, the number of ambulance suppliers increased 26% between 2002 and 2011, with those primarily providing basic life support nonemergency transports nearly doubling. The OIG also reports that while all states experienced increases in transports from 2002 to 2011, utilization changes varied widely by state, with high utilization growth linked to dialysis-related transports, basic life support nonemergency transports, and inpatient hospital visits to treat renal failure. The OIG attributes spending increases in part to inflation and the transition to the national fee schedule for Medicare ambulance transports, as well as continued growth in the use of ambulance transports. The OIG did not determine whether the utilization changes it observed were appropriate. Given that prior OIG reports have indicated that ambulance transports are vulnerable to fraud and abuse, however, the OIG does plan to issue a future report focusing on ambulance transport suppliers that exhibit questionable billing characteristics and the geographic areas in which they are concentrated.
This post was written by Nancy Sheliga.
On October 9, 2013, the OIG released a report focused on questionable Medicare billing for polysomnography services in 2011. Polysomnography is a type of sleep study that has seen increasing Medicare spending over the past few years and that the OIG notes has been identified as being vulnerable to fraud and abuse. The report analyzed polysomnography claims submitted by both hospital outpatient departments and nonhospital providers such as independent diagnostic testing facilities and physician-owned sleep laboratories. The OIG identified claims amounting to $16.8 million that did not meet Medicare requirements, many of which were due to inappropriate diagnosis codes submitted by hospital outpatient departments. In addition, the report found that 180 providers exhibited patterns of what the OIG identified as questionable billing, the majority of which had unusually high rates of multiple claims for polysomnography services for the same beneficiary on the same day. Other patterns suggesting questionable billing included providers sharing the same beneficiaries (which may indicate that providers are using compromised beneficiary numbers for fraudulent billing), potential unbundling of split-night services, and cases lacking evidence of a patient relationship with the ordering provider in the preceding year. The report recommended that CMS: develop more effective claims processing edits (especially prepayment edits to ensure the appropriate use of diagnosis codes); further investigate and attempt to recover payments for claims that failed to meet Medicare requirements; consider using factors identified in the study to screen polysomnography providers in the future; refer providers with patterns of questionable billing to Medicare contractors for further investigation. CMS agreed with all four recommendations. In addition to this study, the OIG notes that it is also conducting audits of polysomnography claims for selected regions to determine whether claims were appropriate and paid accurately.
This post was written by Nancy Sheliga.
In October 2013, the OIG issued a report (“The First Level of the Medicare Appeals Process, 2008–2012: Volume, Outcomes, and Timeliness") that addresses the first level of the appeals process for Medicare Parts A and B, known as redetermination. Eighteen contractors that process redeterminations and relevant CMS staff were contacted for the study, which focused on redeterminations and claims processed for Medicare Parts A and B between 2008 and 2012. The report found that the number of redeterminations processed increased by 33% over this period, with those relating to Part A (especially those involving inpatient hospital and home health claims) increasing more rapidly than those relating to Part B. The growth in the recovery audit contractor program accounted for a large part of the appealed Part A decisions. Nevertheless, 80% of all redeterminations in 2012 involved Part B services, with contractors deciding more often in favor of Part B appellants than Part A appellants. Part A reviews were reported to be typically more time and resource intensive than those for Part B. The report also found that contractors generally met required timeframes for processing redeterminations and paying for appeals won by appellants, and when there were problems in this regard they most often related to Part A related cases rather than Part B. Contractors did, however, more often fail to transfer case files for second-level appeals in a timely manner. The report includes the following three recommendations for CMS, with which the agency concurred: (1) using the Medicare Appeals System (MAS) implemented by CMS for first-level appeals to monitor contractor performance, (2) continuing to foster information sharing among Medicare contractors, and (3) monitoring the quality of redeterminations data in the MAS.
The OIG has announced an online submission process for the Self-Disclosure Protocol, which is a vehicle for providers who wish to voluntarily disclose self-discovered evidence of potential fraud to the OIG.
The HHS Office of Inspector General (OIG) has issued two recent reports focusing on inappropriate prescribers practices involving drugs paid under the Medicare Part D program. In one report, the OIG concluded that the Medicare Part D program inappropriately paid for drugs (including controlled substances) ordered by individuals who did not have the authority to prescribe, such as massage therapists, athletic trainers, home contractors, interpreters, transportation companies, counselors, social workers, and chiropractors in 2009. In a related report, " Prescribers with Questionable Patterns in Medicare Part D," the OIG identified more than 736 general-care physicians who demonstrated what the OIG considers to be questionable prescribing patterns, such as prescribing extremely high numbers of prescriptions per beneficiary, using numerous pharmacies, prescribing a high percentage of Schedule II and Schedule III drugs, and prescribing a high percentage of brand-name prescriptions. Medicare paid $352 million for the Part D drugs ordered by these "extreme outlier" physicians. The OIG notes that while "some of this prescribing may be appropriate, such questionable patterns warrant further scrutiny." To address issues identified in the reports, the OIG recommends that CMS increase oversight of the Part D program by: requiring Part D plan sponsors to verify that prescribers have the authority to prescribe drugs; providing sponsors with additional guidance on monitoring prescribing patterns; increasing the Medicare Drug Integrity Contractor’s monitoring of prescribers; providing education and training for prescribers; ensuring that Medicare does not pay for prescriptions from individuals without prescribing authority; and following up on the prescribers identified in the reports. CMS concurred with the recommendations. The first report, "Medicare Inappropriately Paid for Drugs Ordered by Individuals without Prescribing Authority," is available here. To highlight its concerns in this area, the OIG has created a new "Spotlight" web page focusing on OIG enforcement efforts and investigations related to prescription drug diversion.
The OIG urges CMS to seek authority to cut Medicare rates for clinical laboratory tests and institute copayments in light of findings that Medicare payments exceed other insurer rates by as much as 30 percent. Specifically, a recent OIG analysis concludes that Medicare paid 18% to 30% percent more than other insurers, including state Medicaid programs and Federal Employees Health Benefits (FEHB) plans, for 20 high-volume and/or high-expenditure lab tests in the first quarter of 2011. According to the OIG, Medicare could have saved $910 million (38%) on these tests if it had paid the lowest established rate in each geographic area. In response to the OIG’s findings, CMS is exploring whether it currently has the authority to revise Medicare reimbursement for lab tests (but copayments and deductibles apparently are not being pursued).
Two recent OIG reports examine Medicare policies involving hospice services. The first report concentrates on hospice general inpatient care (GIP), under which short-term pain control or symptom management that cannot be managed in other settings is provided in an inpatient facility (a Medicare-certified hospice inpatient unit, a hospital, or a SNF). Medicare paid $1.1 billion for GIP in 2011, mainly for care in hospice inpatient units. Almost one-quarter of hospice beneficiaries received GIP that year, with one-third of the stays exceeding 5 days. On the other hand, 27% of Medicare hospices did not provide any GIP, and many of these hospices did not provide any level of hospice care other than routine home care. The OIG believes additional review is needed to ensure that hospices are using GIP as intended and providing the appropriate level of care. The OIG also suggests that CMS ensure that hospices that do not provide GIP are offering the necessary levels of care, such as through adoption of a quality measure regarding hospices’ ability to provide all hospice services.
The second report examined the growth in Medicare beneficiaries’ discharges from acute-care hospitals to hospice care, and its impact on hospital payment. While Medicare has “transfer payment policies” that adjust payments to hospitals for early discharges (i.e., sooner than a Medicare-established average length of stay) to other hospitals or postacute-care facilities, Medicare does not currently have a transfer payment policy for early discharges to hospice care. The OIG estimates that Medicare could have saved more than $602 million in 2009 and 2010 by applying a hospital transfer payment policy for early discharges to hospice care. The OIG recommends that CMS adopt regulations or pursue a legislative change, if necessary, to establish a hospital transfer payment policy for early discharges to hospice care. CMS will study the recommendations.
According to the OIG, Medicare provider enrollment databases include inaccurate, incomplete, and inconsistent provider data, and -- coupled with insufficient oversight -- “present vulnerabilities in all health care programs.” The OIG reviewed heath care provider information maintained in the National Plan and Provider Enumeration System (NPPES) and the Provider Enrollment, Chain and Ownership System (PECOS). For instance, provider data was inaccurate in 48% of NPPES records and 58% of PECOS records, and this data was inconsistent between NPPES and PECOS for 97% of records (addresses were the source of most inaccuracies and inconsistencies). The OIG recommends that CMS: require Medicare Administrative Contractors to implement program integrity safeguards for Medicare provider enrollment; require more verification of NPPES and PECOS data; and detect and correct inaccurate and incomplete provider data. CMS concurred with the recommendations. The title of the OIG report is: “Improvements Are Needed To Ensure Provider Enumeration and Medicare Enrollment Data Are Accurate, Complete, and Consistent.”
This post was written by Nancy Sheliga.
The OIG has released a study entitled “High-Risk Compounded Sterile Preparations and Outsourcing by Hospitals That Use Them,” triggered by concerns caused by the recent outbreak of meningitis among patients receiving contaminated injections from a compounding center. The report found that 92% of hospitals used compounded sterile preparations (CSPs) in 2012, prepared either onsite at the hospitals themselves or outsourced to compounding pharmacies. Among these, higher-risk nonsterile-to-sterile compounding composed less than 1% of CSPs used in hospitals, but 85% of hospitals outsourced at least some nonsterile-to-sterile compounding. Among the reasons hospitals cited for outsourcing CSPs were the need to ensure an adequate supply of CSPs in the event of shortages, the need to obtain more stable CSPs and products with extended shelf lives, the ability to have products on hand when needed with less waste, and insufficient resources to prepare all CSPs on site at some hospitals.
Overall, hospitals reported few problems with the quality of CSPs obtained from outside pharmacies and they took few steps to ensure the quality of outsourced CSPs. However, over half of hospitals indicated that they have made changes or plan to make changes to CSP sourcing practices due to the recent meningitis outbreak, including decreasing CSP outsourcing, requesting more information on product quality from outside pharmacies, contracting with different outside pharmacies, changing the way CSPs are prepared in hospital facilities, increasing quality controls in hospital pharmacies, and expanding the capacity to prepare CSPs in-house.
The OIG notes that hospitals largely remain confident about the quality of outsourced CSPs, but “the meningitis outbreak raises questions about whether this confidence is well placed.” The OIG observes that vigilance is needed in this area and indicates that it plans to pursue additional work relating to the safety and quality of pharmaceutical compounding in hospitals, including work examining federal oversight mechanisms.
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) issued an updated “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs ” (Updated Bulletin) on May 8, 2013, answering certain questions the OIG has received from providers and suppliers regarding exclusions and addressing other issues related to exclusions. The Updated Bulletin follows on a Special Advisory Bulletin regarding the same topic published by the OIG in September 1999. Since the OIG issued the 1999 Special Advisory Bulletin, Congress has enacted various statutory provisions that have strengthened the OIG’s authority to exclude individuals from federal health care programs and impose civil monetary penalties (CMPs) related to exclusion. The OIG states that in the development of the Updated Bulletin, it also relied on comments it received in response to a 2010 solicitation of comments on this topic.
The Updated Bulletin reflects a continuation of the OIG’s expansive view of the scope of the federal exclusion authorities, particularly relating to the prohibition against employing or contracting with excluded individuals and entities. The bulletin explains the statutory background of the exclusion and CMP authorities; describes the effect of exclusion; emphasizes the implications of violations of exclusion by an excluded individual and the implications for violating the prohibition against employment or contracting with an excluded individual for the furnishing of items or services paid for by a federal health care program; explains the scope of what conduct involving excluded individuals may lead to overpayment liability and CMPs; and provides guidance to providers and suppliers regarding how to screen for excluded individuals.Continue Reading...
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has issued a revised version of its Provider Self-Disclosure Protocol (Updated SDP), dated April 17, 2013, which established a process for health care providers to voluntarily identify, disclose, and resolve instances of potential fraud involving federal health care programs. Specifically, this protocol is intended to address: (1) conduct involving potential false billings; (2) conduct regarding excluded persons; (3) conduct involving potential violations of the Anti-Kickback Statute (AKS); and (4) conduct involving potential violations of the AKS and the Stark Law.
The Updated SDP provides guidance on how to investigate the conduct described above, quantify damages, and report such conduct to OIG to resolve the provider’s liability under OIG’s civil monetary penalty authorities. The document supersedes the previous OIG Provider Self-Disclosure Protocol issued in 1998 and three previous “Open Letters to Health Care Providers.” The OIG notes that over the past 15 years, it has resolved over 800 disclosures, resulting in recoveries of more than $280 million to federal health care programs. The Updated SDP reflects the OIG’s experience with the protocol since 1988, along with feedback it received from the public in response to a June 18, 2012 comment solicitation.
A summary of the Updated SDP, highlighting notable statements and requirements, is available in our Client Alert.
The OIG has called on CMS to expand its use of surety bonds for Medicare DMEPOS suppliers, in a report entitled “Surety Bonds Remain an Underutilized Tool to Protect Medicare from Supplier Overpayments.” Although CMS has required suppliers to obtain a minimum of $50,000 in surety bond coverage per location since 2009, the OIG found that CMS did not have accurate surety bond information for all Medicare suppliers as of 2011, and bonds in effect do not enable the agency to recoup all overpayments. As of August 2011, 1,429 suppliers owed $70 million to Medicare, but $20 million of this amount was owed by 312 suppliers without bonds. Out of the $50 million owed by bonded suppliers, the OIG estimates that $42 million will likely remain uncollected because the overpayment exceeds the $50,000 bond amount. The OIG recommends that CMS: improve oversight of supplier data to ensure accurate reporting; immediately begin recovering outstanding overpayments from suppliers’ surety bonds; consider using ACA authority to require increased surety bond amounts for suppliers receiving high levels of Medicare payments; and specify that collection of debts through surety bonds is based on dates of service. CMS concurred with the OIG recommendations, noting in its response to the report that as of July 2012, it has collected $263,000 in overpayments from sureties, and additional recoveries are expected. CMS also stated that it considering linking DMEPOS surety bond amounts to the volume of a supplier’s billing. CMS also is considering requiring home health agencies and certain other provider and supplier types to obtain and maintain surety bonds as a condition of enrollment.
The OIG has released its Medicaid Integrity Program Report for FY 2012, which provides information on the OIG's Medicaid program integrity funding, summarizes significant OIG Medicaid-related reviews and investigations, and highlights Medicaid-related projects included in the OIG’s Work Plan for FY 2013.
The OIG has updated its 2006 guidelines on how it determines whether a state false claims act law meets certain federal standards. By way of background, to encourage improved state efforts to fight Medicaid fraud, the Deficit Reduction Act (DRA) enables states that adopt state false claims acts to retain a greater portion of Medicaid overpayments. Specifically, the DRA decreases the federal government’s share of any Medicaid overpayment by 10 percentage points for any state that enacts a false claim act that meets standards established by HHS, effective January 1, 2007. To qualify, the state law must: (1) establish liability to the state for false or fraudulent claims described in the federal False Claims Act (FCA), with respect to Medicaid expenditures; (2) contain provisions that are at least as effective in rewarding and facilitating qui tam actions as those in the federal FCA; (3) contain a requirement for filing an action under seal for 60 days with review by the state Attorney General; and (4) contain a civil penalty that is not less than the amount authorized by the federal FCA. In August 2006, the OIG released guidelines on how it will determine whether a state law meets the DRA's requirements. The new guidelines to reflect subsequent amendments to the FCA that modified the bases for FCA liability, expanded the rights of qui tam relators, and added an express requirement that civil penalties include adjustments under the Federal Civil Penalties Inflation Adjustment Act of 1990. The guidelines also provide more specificity regarding the OIG’s standards based on the OIG’s experience in reviewing state laws to date. Notably, the new guidelines provide more prescriptive requirements for state laws pertaining to “Rewarding and Facilitating Qui Tam Actions,” with the OIG now expecting state laws to include 14 rather than 8 elements in this area. The new guidelines are effective March 15, 2013.
OIG Special Fraud Alert Deems Physician-Owned Distributors (PODs) As "Inherently Suspect" Under Anti-Kickback Statute
On March 26, 2013, the HHS Office of Inspector General (OIG) released a Special Fraud Alert highlighting the risks associated with PODs -- physician-owned entities that sell (or arrange for the sale of) implantable medical devices ordered by their physician-owners for use in procedures the physician-owners perform on their own patients at hospitals or ambulatory surgical centers. Building on previous OIG and Congressional scrutiny of PODs, the Special Fraud Alert details specific attributes and practices of PODs that the OIG believes “produce substantial fraud and abuse risk and pose dangers to patient safety.” A Reed Smith analysis of the Alert is available on our Life Sciences Legal Update blog.