Office of Inspector General Developments

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The OIG has called on CMS to strengthen activities to prevent improper Medicare payments, including enhancements to the Recovery Audit Contractor (RAC) program. For instance, the OIG notes that RACs identified half of all claims they reviewed in FYs 2010 and 2011 as having resulted in improper payments totaling $1.3 billion. While CMS took corrective…

In a recent report, “Medicaid Drug Pricing in State Maximum Allowable Cost Programs,” the OIG examines options for controlling state Medicaid prescription drug costs, particularly given a surge in Medicaid enrollment expected in the coming years as a result of the ACA. The OIG highlights the value of state Maximum Allowable Cost (MAC)…

A recent OIG report examined “Hospitals’ Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries.” The report was conducted in response to concerns about hospitals’ use of observation stays, which may be resulting in Medicare beneficiaries paying more as outpatients than if they were admitted as inpatients, and which may prevent beneficiaries…

On May 17, 2013, the HHS Office of Inspector General (OIG) published a final rule amending current regulations prohibiting State Medicaid Fraud Control Units (MFCU) from using federal matching funds to identify fraud through screening and analyzing State Medicaid data (known as data mining). In order to “support and modernize MFCU efforts to effectively pursue…

The OIG has issued an ACA-mandated report on Medicare Part D prescription drug plan and MA drug plan coverage of drugs commonly used by full-benefit dual-eligible individuals (that is, individuals eligible for Medicare and Medicaid and who receive full Medicaid benefits and Medicare premium and cost-sharing assistance). The OIG determined that for 2013, Part D/MA…

The OIG has issued a report entitled “Medicare and Beneficiaries Could Save Millions If Dialysis Payments Were Adjusted for Anemia Management Drug Utilization.” The OIG estimates that if CMS had adjusted the payments for dialysis services to incorporate anemia management drug utilization in 2011 — rather than use 2007 data reflecting higher utilization…

All private health insurers in the individual and small group markets must submit data to the HealthCare.gov Plan Finder, an online portal created to help consumers compare health insurance coverage options. According to a recent OIG report, "Oversight of Private Health Insurance Submissions to the HealthCare.gov Plan Finder," while most private insurers reported…

The OIG has examined the extent to which long-term care hospitals (LTCHs) that are co-located with another hospital-level provider or a skilled nursing facility disclose their co-location status to their Medicare contractor. Because co-located status can impact Medicare payments, co-located LTCHs and satellite facilities must notify their MAC and CMS Regional Office about the provider(s)…

A new OIG report, “Part B Payments for Drugs Infused through Durable Medical Equipment,” calls for changes in the Medicare reimbursement methodology for Part B infusion drugs administered in conjunction with DME in light of potentially inaccurate pricing. By way of background, DME infusion drugs are reimbursed at 95% of the drug’s average…

A recent OIG report, “Gaps in Oversight of Conflicts of Interest in Medicare Prescription Drug Decisions,” examines how Medicare Part D drug plan pharmacy and therapeutics (P&T) committees ensure that formulary decisions are not biased by conflicts of interest. Based on a survey of P&T committees and a review of their written policies…

The OIG has examined CMS efforts to prevent fraud and abuse at community mental health centers (CMHCs), which provide partial hospitalization program services (structured outpatient mental health treatment programs) to qualifying Medicare beneficiaries. The OIG has previously reported that CMHCs may be particularly vulnerable to fraud, waste, and abuse involving PHP services, with approximately half…

The OIG recently identified barriers to the effectiveness of the Medicare Drug Integrity Contractor (MEDIC) in performing Medicare Parts C and D benefit integrity activities between April 2010 and March 2011. For instance, the MEDIC reported that it does not have access to centralized Part C data, it lacks access to certain prescription drug event…

The OIG has reviewed the extent to which states have improved collection of third-party liability (TPL) payments in situations where Medicaid beneficiaries have additional sources of health insurance that are responsible for payment. According to the OIG report, Medicaid Third-Party Liability Savings Increased, But Challenges Remain, states reported that TPL savings increased from…

The OIG has discovered that Medicare has paid millions of dollars in benefits for aliens who are not lawfully present in the country and for incarcerated beneficiaries, contrary to program rules. Specifically Medicare made $91.6 million in payments to health care providers for services to approximately 2,600 unlawfully present beneficiaries during calendar years 2009 through…

The OIG is calling on CMS to lower Medicare payment for certain back orthosis products, either by subjecting these products to the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program or by making an inherent reasonableness adjustment. This recommendation stems from the OIG’s findings that Medicare payment amounts far exceeded…