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

The GAO has developed a prototype formula for a temporary increased Federal Medical Assistance Percentage (FMAP) designed to target variable state Medicaid needs and provide automatic, timely, and temporary assistance in response to national economic downturns. The recommendations stem from a mandate in the American Recovery and Reinvestment Act of 2009 that GAO provide recommendations for modifying the FMAP formula to make it more responsive to state Medicaid program needs during future economic downturns. Under the formula, temporary enhanced assistance would be triggered when a threshold number of states (26 in the prototype formula) have a sustained decrease in their employment-to-population ratio. The amount of targeted assistance would be based on increases in unemployment and reductions in total wages and salaries.

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The GAO has issued a report entitled, “Health Care Price Transparency: Meaningful Price Information is Difficult for Consumers to Obtain Prior to Receiving Care.” According to the GAO, consumer difficulties in obtaining meaningful medical pricing information stem from both health care factors (such as the difficulty of predicting health care services in advance, billing from multiple providers, and various insurance benefit structures) and legal factors that may prevent the disclosure of negotiated rates between insurers and providers that could be used to estimate consumers' complete health care costs. While a number of public and private price transparency initiatives are underway, the types of information available to consumers vary. The GAO recommends that HHS determine the feasibility of making estimates of complete costs of health care services available to consumers as part of its transparency initiatives.

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The Government Accountability Office (GAO) has issued a report entitled "Long-Term Care Hospitals: CMS Oversight Is Limited and Should Be Strengthened," which examines the extent to which CMS (1) collects data about LTCHs’ quality of care and (2) oversees LTCH survey activities. The GAO discusses the limitations of CMS data on LTCH quality, including the unavailability of detailed results of certain surveys performed prior to 2009, misidentified or missing LTCHs in CMS databases, and the lack of data on quality measures (note that the ACA requires LTCHs to report quality measures by 2014). The GAO also reviews ways in which CMS’s oversight of surveying activities related to LTCHs is limited, including shortcomings in CMS’s approach to validation surveys. The GAO recommends that CMS strengthen its oversight of LTCHs by taking a series of steps to improve available data on quality of care (such as by enhancing the accuracy of databases that track LTCH quality of care and promoting the sharing of complaint validation survey results) and improve oversight of LTCH survey activities (including conducting traditional validation surveys at a sample of LTCHs each fiscal year and holding survey organizations accountable for conducting surveys consistent with CMS requirements for evaluating the quality of care provided by LTCHs). In its response to the GAO report, CMS indicated that it concurred with all five recommendations made by the GAO. Among other things, CMS indicated that it intends to work with regional offices to clarify the policy for triaging complaint surveys at accredited LTCHs and for referring certain complaints to the appropriate accrediting organization.

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The Government Accountability Office (GAO) has released a report entitled "Medicare Part D: Instances of Questionable Access to Prescription Drugs." The GAO found indications of Medicare Part D "doctor shopping" (where individuals see several doctors and pharmacies, receiving more of a drug than was intended by any single physician) for 14 categories of frequently-abused prescription drugs. Specifically, about 170,000 beneficiaries (about 1.8% of beneficiaries receiving the 14 categories of drugs) acquired the same class of frequently abused drugs, primarily hydrocodone and oxycodone, from five or more medical practitioners during 2008 at a cost of about $148 million (about 5% of the total cost for these drugs). The GAO recommends that CMS consider steps such as a restricted recipient program for identified doctor shoppers. CMS agreed with the overall recommendation to improve efforts to curb overutilization in Part D, but disagreed that a restricted recipient program is necessarily the appropriate Part D control.

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The GAO has released a compilation of contracts awarded and consultants retained by federal departments and agencies to assist in implementing the ACA. For instance, the GAO reports that the total amount obligated by the HHS's Assistant Secretary for Administration for ACA-related contracts as of April 15, 2011 was $706 million (most related to support of state Pre-existing Condition Insurance Plans), while CMS’s total contract obligations were $20 million and the Internal Revenue Service’s contract obligations totaled $34.8 million. 

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The Government Accountability Office (GAO) has issued a report entitled "HHS Research Awards: Use of Recovery Act and Patient Protection and Affordable Care Act Funds for Comparative Effectiveness Research." The report includes a more than 40-page listing of all comparative effectiveness research grants issued under the Recovery Act, including the entities that have received funding and the general purpose of the funding (no funding had been obligated under the ACA's comparative effectiveness provision as of April 25, 2011).

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The Government Accountability Office (GAO) has issued a report entitled "Nursing Homes: More Reliable Data and Consistent Guidance Would Improve CMS Oversight of State Complaint Investigations." According to the GAO, state survey agencies received 53,313 complaints about nursing homes in 2009; the number and types of complaints varied among states. State survey agencies investigated all but 102 complaints that required an investigation; 19% of investigated complaints were substantiated and resulted in the citation of at least one federal deficiency. The GAO also reports that: many state survey agencies had difficulty meeting some of CMS's nursing home complaint standards; CMS's oversight of state complaint investigation processes is hampered by data reliability issues; and state corrective action plans do not necessarily address the underlying causes of performance issues. The GAO recommends that CMS take steps to strengthen oversight of complaint investigations, such as improving the reliability of its complaints database and clarifying state performance standards guidance to assure more consistent interpretation.  HHS generally agreed with the GAO's recommendations. Separately, the OIG has issued a report on "Medicare Atypical Antipsychotic Drug Claims for Elderly Nursing Home Residents." Based on a limited medical record review of claims for the period January 1 through June 30, 2007, the OIG concluded that: 51% of Medicare claims for atypical antipsychotic drugs for elderly nursing home residents were erroneous, amounting to $116 million; 14% of elderly nursing home residents had Medicare claims for atypical antipsychotic drugs; 83% of Medicare claims for such drugs for elderly nursing home residents were associated with off-label conditions and 88% were associated with dementia, the subject of an FDA boxed warning; and 22% of the atypical antipsychotic drugs claimed were not administered in accordance with CMS standards regarding unnecessary drug use in nursing homes. The OIG recommends that that CMS: (1) facilitate access to information necessary to ensure accurate coverage and reimbursement determinations, (2) assess whether survey and certification processes offer adequate safeguards against unnecessary antipsychotic drug use in nursing homes; (3) explore alternative methods to promote compliance with federal standards regarding unnecessary drug use in nursing homes; and (4) take appropriate action regarding the claims associated with identified erroneous payments. CMS generally agreed with all except the first recommendation.

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The Government Accountability Office (GAO) has issued a report entitled “Medicaid: Improving Responsiveness of Federal Assistance to States during Economic Downturns,” as mandated by the American Recovery and Reinvestment Act of 2009. The report reviews the impact of previous recessions on states’ ability to fund Medicaid, the responsiveness of past Federal Medical Assistance Percentage (FMAP) increases, and options for adjusting the increased FMAP formula for use during future recessions. Among other things, the GAO discusses potential future FMAP adjustments including: (1) using an automatic trigger to start the assistance program closer to the onset of a national recession, (2) adding several quarters of transitional assistance before ending the increased FMAP assistance, and (3) targeting assistance by calculating the increased funding needed on the basis of the economic conditions of each state. Such policies would require statutory change. 

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Under CMS rules, all Part D sponsors must have compliance plans that include measures to detect, correct, and prevent fraud, waste, and abuse. According to a Government Accountability Office (GAO) report, "Medicare Part D: CMS Conducted Fraud and Abuse Compliance Plan Audits, but All Audit Findings Are Not Yet Available." CMS conducted on-site compliance plan audits of 33 of the 290 sponsors in 2010 to enforce this requirement. While CMS has not yet released the audit findings, agency officials reported that as of December 2010, CMS had issued five marketing and enrollment sanctions and one contract termination action based in part on the audit findings. Separately, the OIG has reported that CMS accepted $3.1 million in noncovered Medicare Part D drug costs for erectile dysfunction drugs approved only for the treatment of sexual or erectile dysfunction in 2007 and 2008. The OIG recommends that CMS determine whether it can impose financial adjustments on sponsors that were paid for such drugs, and that the agency strengthen internal controls to prevent such claims. 

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The Government Accountability Office (GAO) has issued a lengthy report entitled “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue.” The report identifies areas of program duplication and fragmentation and other opportunities for cost savings in federal government programs. Among other things, the GAO focuses on the following health care program areas: potential savings in Medicare’s payments for health care (particularly in the areas of physician payment and practice patterns, imaging services, and home oxygen); better targeting of Medicare claim reviews; preventing Medicaid improper payments, including Medicaid supplemental payments; integration of nationwide public health information systems; and controlling Departments of Veterans Affairs and Defense drug costs.

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The GAO has issued a report entitled "Electronic Prescribing: CMS Should Address Inconsistencies in Its Two Incentive Programs That Encourage the Use of Health Information Technology." The GAO examines differences between the CMS Electronic Prescribing (eRx) program and the EHR program, both of which provide incentive payments to eligible Medicare providers who adopt and use health information technology, and penalties for those who do not. In particular, the GAO is concerned that, in contrast to the EHR program, the eRx program does not have a certification requirement, so providers have no assurance that their systems will meet eRx program requirements. The two programs also have separate reporting requirements, potentially requiring physicians to report to both programs in 2011 through 2014. The GAO recommends that CMS take a number of steps, including encouraging providers in the eRx program to adopt certified technology, and expediting efforts to remove overlapping reporting requirements for physicians participating in both programs. 

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The Government Accountability Office (GAO) has released a report entitled "Medicare Home Oxygen: Refining Payment Methodology Has Potential to Lower Program and Beneficiary Spending." The report compares Medicare oxygen reimbursement to that of eight private insurers and the Veterans Administration (VA). If Medicare payment was based on the methodologies of the lowest-paying private insurer, Medicare could have saved about $670 million of the estimated $2.15 billion it spent on home oxygen in 2009. Using the VA’s payment method could have saved $410 million to $810 million. Likewise, basing Medicare rates on CMS’s 2011 competitive bidding rates could have saved $700 million. With regard to beneficiary access to equipment, the majority of home oxygen suppliers interviewed said they were reluctant to or would not accept new beneficiaries who were approaching the 36-month cap on rental payments for home oxygen equipment. While CMS states that it has ensured all beneficiaries who relocated found suppliers, if access becomes a problem in the future; CMS may consider requiring the supplier that provides home oxygen for month 18 or later to provide oxygen for the remainder of the rental period or make arrangements with another supplier to do so. The GAO recommends that Congress consider reducing home oxygen payment rates, and that CMS restructure oxygen payments. HHS agreed that payments for home oxygen are “excessive,” but disagreed with the specific recommendation because it would not yield immediate savings.

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The GAO has issued a report entitled “Medicare Advantage: Comparison of Plan Bids to Fee-for-Service Spending by Plan and Market Characteristics.” Among other things, the GAO reports that MA plans projected they could cover their costs for providing Medicare's standard benefits for about 98% of the amount that would be spent under the FFS program, although bids relative to FFS spending varied within plan types. When other factors are held constant, predicted bids relative to FFS spending are higher for plans with service areas where MA market concentration is greater. Overall, plans differed little in the shares of their bids allocated to medical expenses, nonmedical expenses, and profit. The GAO notes that more than a third of MA enrollees were in plans that allocated less than 85% of bids to medical expenses.

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The Government Accountability Office (GAO) has announced the appointment of 15 members to the Methodology Committee of the Patient-Centered Outcomes Research Institute (PCORI).  The Committee is charged with helping PCORI develop methodological standards and guidance for comparative clinical effectiveness research.  

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The Government Accountability Office (GAO) has issued a report entitled, “Health Care Delivery: Features of Integrated Systems Support Patient Care Strategies and Access to Care, but Systems Face Challenges.” The report describes: (1) organizational features health provider integrated delivery systems (IDS) use to support strategies to improve care; (2) approaches IDSs use to facilitate access specifically for underserved populations; and (3) challenges IDSs encounter in providing care, including to underserved populations. 

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The GAO has issued a report entitled “Nursing Homes: Complexity of Private Investment Purchases Demonstrates Need for CMS to Improve the Usability and Completeness of Ownership Data.” The GAO identified private investment (PI) ownership using a proprietary database and analyzed data from six PI firms about their interest and involvement in nursing homes. The GAO found that 1,876 unique nursing homes were acquired by PI firms from 1998 through 2008, in some cases involving entire nursing home chains (both the operations and any owned real estate) and others involving only the real estate. Ten PI firms accounted for 89 percent of the nursing homes acquired by PI firms during this period. Of the six PI firms from which GAO collected information, those that acquired a chain reported being more involved in nursing home operations than those that only acquired the real estate. According to GAO, PECOS provided a confusing picture of the complex ownership structures and chain affiliations of the six PI-owned nursing home chains, since it did not provide any indication of the relationships among the numerous organizational owners listed for PI-owned nursing homes and since PI ownership was often not readily apparent. Moreover, CMS’s ability to determine the accuracy and completeness of the reported ownership data is limited. The GAO also found that HHS has made limited use of PECOS ownership data, and tracking compliance problems among commonly-owned homes or multistate chains can be ad hoc. In light of interest by state officials and others expressed in nationwide ownership data to improve nursing home oversight, CMS has established a workgroup to consider whether and how to provide PECOS access to external parties such as states. According to GAO, the implementation of the Patient Protection and Affordable Care Act provides CMS with an opportunity to address shortcomings in the current PECOS database and to make ownership information available to states and consumers in a more intelligible way. The report includes 11 recommendations designed to strengthen reporting requirements to make nursing home ownership structures more understandable and improve the accuracy and dissemination of these data. HHS concurred with all of GAO’s recommendations.

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This post was written by Paul Sheives.

The Government Accountability Office (GAO) has issued two reports addressing foreign FDA inspectional issues. 

• In the first report entitled “Overseas Offices Have Taken Steps to Help Ensure Import Safety, but More Long-Term Planning Is Needed,” GAO sought to examine (1) the steps FDA’s overseas offices have taken to help ensure the safety of imported products; and (2) the extent to which FDA has engaged in long-term strategic and workforce planning for its overseas offices. GAO recommended that FDA take steps to enhance strategic planning to ensure coordination between overseas and domestic activities and develop a workforce plan to help recruit and retain overseas staff. 
• The second report, entitled “FDA Has Conducted More Foreign Inspections and Begun to Improve Its Information on Foreign Establishments, but More Progress Is Needed,” is a follow-up report monitoring FDA’s progress towards addressing the recommendations of a 2008 GAO report concluding that FDA should increase foreign drug inspections and improve the information it receives to better manage such inspections. GAO found that FDA has not yet fully addressed these weaknesses at a time when the volume of imported drugs and the number of foreign establishments producing these drugs have been increasing. 

FDA agreed with the recommendations from both reports.

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The Government Accountability Office (GAO) has announced the appointment of 15 members to the new National Health Care Workforce Commission authorized by the ACA. The Commission is charged with making recommendations on how to: align federal health care workforce resources with current national needs; coordinate activities at the federal, state, and local levels; and encourage innovations that address population needs, changing technology, and other factors.

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According to a new GAO report, “Recovery Act: Increased Medicaid Funds Aided Enrollment Growth, and Most States Reported Taking Steps to Sustain Their Programs,” states (and the District of Columbia) are on pace to use about 94% ($82 billion) of increased FMAP funds provided by the Recovery Act. Almost all states reported using the increased FMAP to cover increased enrollment costs. While Congress has passed legislation to extend the increased FMAP through June 2011 (albeit at a lower rate than under the Recovery Act), most states reported concern regarding the sustainability of their Medicaid programs without the increased FMAP. To that end, 46 states have taken steps to address sustainability, such as through taxes on health care providers or reducing provider payments, and most states have proposed additional future changes. 

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The GAO has issued a report entitled “Quality Improvement Organizations' Final Responses to Beneficiary Complaints.” By way of background, QIOs must review written quality-of-care complaints from Medicare beneficiaries and send to the beneficiary a final response summarizing their review findings. A practitioner involved in a case can decline to give consent for the QIO to identify him or her in its response; in such cases, the QIO's final response contains less information. The GAO found while most QIO final responses it reviewed in detail complied with relevant requirements, almost half of the practitioners involved declined to provide consent for disclosure. According to the GAO, the requirement to obtain practitioner consent “remains a barrier to providing beneficiaries with more complete information about their complaints.” The GAO observed that QIOs could make the complaint process more transparent to beneficiaries, such as by providing information on corrective actions taken, which likely would “provide some assurance to beneficiaries that their complaints and any underlying problems identified were being addressed.”

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The GAO reports that CMS and its contractors have not used the historical Hospital Payment Monitoring Program (HPMP) and Comprehensive Error Rate Testing (CERT) program error rates to identify and focus on “error-prone providers,” which GAO defines as providers that had at least one error in each of the four years of its audit period. The GAO consequently recommends that CMS: (1) use available error rate data to identify error-prone providers, (2) require error-prone providers to identify the root causes of claim errors and to develop and implement corrective action plans, (3) monitor provider-specific corrective action plans, and (4) share error rate data with its contractors to assist in identifying improper payments. CMS concurred with the recommendations.

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The GAO recently issued a report examining changes in the air ambulance industry in the last decade and the implications of these changes on the availability of air ambulances and patient services. The GAO found that while the number of patients transported by helicopter air ambulance increased by about 35% from 1999 through 2008, the number of dedicated air ambulance helicopters increased about 88 percent. There also was a shift away from a preponderance of hospital-affiliated air ambulances to a more even split between hospital-based and independent providers. The data was not conclusive, however, regarding whether these developments have provided useful flexibility or encouraged to medically unnecessary flights. The report also provides information on the relationship between federal and state oversight and regulation of the industry. 

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The Government Accountability Office (GAO) has announced appointments to the Board of Governors for the new Patient-Centered Outcomes Research Institute (PCORI), as authorized by the ACA. The GAO still is accepting nominees for the PCORI Methodology Committee; the deadline for those nominations is October 29, 2010.

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The GAO has issued a report entitled, "Group Purchasing Organizations: Services Provided to Customers and Initiatives Regarding Their Business Practices." The report examines group purchasing organizations (GPOs) – entities that negotiate contracts with medical product vendors on behalf of health care providers. Specifically, the report examines: (1) the types of services that GPOs provide and how the GPOs fund these services, (2) initiatives that GPOs have implemented since 2002 to address the questions that had been raised about their business practices, and (3) the reported impact of the GPOs' codes of conduct and other initiatives. With regard to GPO services, the six largest GPOs all reported offering to their customers custom contracting, clinical evaluation and standardization of products, and assessments of new technology, with other services (such as electronic commerce and benchmarking data services) furnished by some of the GPOs. According to the six GPOs, these services were funded either through contract administrative fees received from vendors (which ranged from 1.22% to 2.25% of customer services in 2008) or by charging customers directly for the service. The GAO report also discuses GPO codes of conduct and the Healthcare Group Purchasing Industry Initiative (HGPII) to promote best practices and public accountability among member GPOs. While all of the GPOs in the review reported that these initiatives have impacted GPO contracting practices, innovative product selection, contract administrative fees, potential conflicts of interest, and the transparency and accountability of GPO business practices, the impact of the GPO initiatives reported by customers and vendors interviewed by the GAO varied.

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The Government Accountability Office (GAO) has issued a report entitled "VA Drug Formulary: Drug Review Process Is Standardized at the National Level, but Actions Are Needed to Ensure Timely Adjudication of Nonformulary Drug Requests." According to the GAO, regional Veterans Integrated Service Networks (VISN) and medical centers vary in how they implement the nonformulary drug request process, including how they: adjudicate such requests; collect and report required data to VA’s pharmacy benefit manager; and address appeals of denied requests. Moreover, while nonformulary drug requests must be adjudicated within 96 hours, this deadline is not always met. The GAO also reports that VA officials are considering options for increasing beneficiary input on the national formulary and improving the transparency of the drug review process. The GAO recommends that VA establish additional mechanisms to ensure nonformulary drug requests are adjudicated in a timely fashion; the VA concurred. 

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The GAO has issued a report, “New Drug Approval: FDA's Consideration of Evidence from Certain Clinical Trials,” examining FDA’s use of non-inferiority trial evidence as part of the drug approval process. According to the report, evidence from non-inferiority trials was included in 43 of the 175 new drug applications (NDAs) for new molecular entities submitted between FY 2002 and 2009, many of which were for antimicrobial drugs. As of December 31, 2009, FDA approved 18 of the 43 NDAs on the basis of evidence from non-inferiority trials (certain additional NDAs were approved based on other evidence). The GAO also examined the characteristics of these trials, and describes FDA’s guidance on these trials. According to GAO, “the agency has become more conservative in allowing evidence from non-inferiority trials to demonstrate a drug’s effectiveness,” both by limiting the indications for which these trials may be used and by becoming more rigorous in its review of evidence from non-inferiority trials. 

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The GAO has issued a report entitled “Medicaid Managed Care: CMS's Oversight of States' Rate Setting Needs Improvement,” which concludes that CMS has been inconsistent in reviewing states’ rate setting for compliance with the Medicaid managed care actuarial soundness requirements. Based in its review, the GAO recommends that CMS track state compliance with actuarial soundness requirements, clarify guidance on rate-setting reviews, and make use of information on data quality in overseeing states’ rate setting.

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The Government Accountability Office (GAO) is seeking nominations for the ACA’s Patient Centered Outcomes Research Institute Governing Board, which is charged with identifying national priorities for comparative effectiveness research.  Likewise, the GAO is seeking nominations for the National Health Care Workforce Commission, also established by the ACA.  Nominations for both panels are due June 30, 2010.

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The Government Accountability Office (GAO) has issued a report entitled "Medicare Advantage: Relationship between Benefit Package Designs and Plans' Average Beneficiary Health Status." GAO examined (1) MA plan benefit packages by average health status of plans’ enrolled beneficiaries, (2) distribution and characteristics of MA plans by average beneficiary health status, and (3) CMS’s process for ensuring that benefit packages do not discriminate with respect to health status. Among other things, the GAO found that plans in the good health group generally had lower premiums, higher cost sharing for certain services, and fewer additional benefits than plans in the poor health group in 2008. CMS has revised its process for reviewing MA plans for the likelihood of discrimination, and it developed a new methodology for setting cost-sharing thresholds. For contract year 2010, CMS contacted all MA plans with benefit packages likely to discriminate, and all plans subsequently met cost-sharing thresholds.

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The GAO has released correspondence to Sen. Charles Grassley on its analysis of whether nursing home surveys accurately identify serious deficiencies. The GAO reviewed fiscal year (FY) 2008 federal comparative survey data, in which federal surveyors independently resurvey a home recently inspected by state surveyors and compare deficiencies identified during the two survey). The GAO found that 12.3% of FY 2008 comparative surveys identified at least one missed serious deficiency, compared to 14.7% in FY 2007. The number of states that missed serious deficiencies on 25% or more of their comparative surveys declined from nine to six states, with eight of those states improving their overall performance. In addition, 74.8% of comparative surveys had at least one lower-level missed deficiency in FY 2008.

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The Government Accountability Office (GAO) has issued a report entitled "End-Stage Renal Disease: CMS Should Monitor Access to and Quality of Dialysis Care Promptly after Implementation of New Bundled Payment System." The report focuses on the new ESRD payment system that begins January 2011, under which CMS will make a single payment to pay for dialysis and related services. To help ensure that changes in Medicare payment methods for dialysis care do not adversely affect beneficiaries, the GAO recommends that CMS monitor access to and quality of dialysis care for groups of beneficiaries, particularly those with above-average costs of dialysis care, under the new payment system. Such monitoring should begin as soon as possible once the new bundled payment system is implemented and be used to inform potential refinements to the system. CMS agreed and noted that it is planning to actively monitor the effects of the new payment system on all ESRD beneficiaries, including those with above-average costs. CMS noted that it plans to have a comprehensive monitoring strategy in place when the system is implemented.

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The Government Accountability Office (GAO) has issued a report entitled "Poorly Performing Nursing Homes: Special Focus Facilities Are Often Improving, but CMS's Program Could Be Strengthened." In this report, the GAO reviewed the factors states consider in selecting facilities for the Special Focus Facility (SFF) program, which targets nursing homes with severe and persistent quality of care problems, along with how CMS and states adhere to related program guidance and the program’s impact on homes’ performance. The GAO found that when selecting SFFs from CMS’s list of candidate facilities, state officials considered factors other than rank on that list, such as their own knowledge of each candidate’s circumstances. In addition, the GAO reports that some states did not consistently follow CMS’s basic SFF program requirements, such as the required number of surveys. Moreover, the GAO described CMS’s enforcement guidance as vague, which results in inconsistent interpretations. Most SFFs that “graduated” from the program showed significant improvement while in the program, although there were some facilities that did not sustain that improved performance after graduation. The GAO discussed a number of strategies CMS and states have used to improve nursing home quality of care. The GAO recommends that CMS take several steps to strengthen the SFF program, including (1) notifying homes that are on the SFF candidate list and seeking legislative authority to charge SFFs for the costs of conducting additional surveys.

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The GAO has issued a report entitled “Medicare Contracting Reform: Agency Has Made Progress with Implementation, but Contractors Have Not Met All Performance Standards.” The report discusses CMS’s transition of claims administration from carriers and fiscal intermediaries to 19 new Medicare Administrative Contractors (MAC), 15 of which will process both Part A and B Medicare claims (A/B MACs) and four that process durable medical equipment (DME) claims. CMS expects to complete the transition process ahead of the October 1, 2011 Medicare Modernization Act (MMA) deadline. The GAO found that contractor transitions to date have lead to a variety of challenges for providers, including payment delays, in part because CMS’s accelerated implementation schedule overlapped with other Medicare claims processing initiatives, including a requirement that providers re-enroll. The GAO also reports that some MACs did not meet all provider service metrics, including superior performance related to accuracy of responses to providers, claims processing timeliness, and appeals.

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

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

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This post was written by Paul Sheives.

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

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This post was written by Paul Sheives.

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

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The GAO has announced the appointment of 13 members to the Health Information Technology Policy Committee, a new advisory body established by the ARRA. The panel is charged with making recommendations on creating a policy framework for the development and adoption of a nationwide health information technology infrastructure, including standards for the exchange of patient medical information. Note that additional members will be appointed by HHS, Congress, and the President. 

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

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The 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.

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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.

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

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On October 27, 2008, the GAO published a notice soliciting nominations for Medicare Payment Advisory Commission (MedPAC) members for appointments effective May 1, 2009. Letters of nomination should be submitted between January 1 and March 31, 2009. 

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

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

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

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

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The GAO has released two reports involving prescription drugs. The first report, "Prescription Drugs: FDA's Oversight of the Promotion of Drugs for Off-Label Uses," found a number of shortcomings in the FDA's review process, including FDA's failure to prioritize its reviews in a systematic manner or consistently track the receipt and review of submitted materials. The second report, "Medicare Part D: Complaint Rates Are Declining, but Operational and Oversight Challenges Remain,” includes a number of recommendations to improve oversight of the Medicare Part D grievances process and provide added assurance that beneficiaries’ grievances are being resolved.

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The Government Accountability Office (GAO) has issued a report entitled "Medicare Part B Imaging Services: Rapid Spending Growth and Shift to Physician Offices Indicate Need for CMS to Consider Additional Management Practices." The GAO found that from 2000 through 2006, Medicare spending for imaging services paid for under the physician fee schedule more than doubled, with spending rising particularly fast for advanced imaging services. The GAO recommends that CMS consider adding prior authorization requirements and other payment safeguards for imaging services.

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