A biweekly publication from the Healthcare Group at Feeley & Driscoll, P.C.
Please visit us at our website: www.fdcpa.com/healthcare.htm. This OIG Update is also accessible from the F&D website, by visiting www. fdcpa.com/oig.updates.htm.
In This Issue
1. OIG Reports More Than $1 Billion in Recoveries From Fighting Fraud, Waste, and Abuse
2. Review of Targeted Case Management Services Rendered by the Massachusetts Department of Social Services During Federal Fiscal Years 2002 and 2003 (A-01-04-00006)
3. Review of Fiscal Year-End Billing For Inpatient Rehabilitation Facility Claims Under The Administrative Responsibility Of Palmetto GBA For 2002 (A-01-05-00522)
4. Review of Ambulance Services Provided by American Medical Response of Massachusetts, Inc. (A-01-04-00502)
5. OIG Settles Largest Ever Civil Monetary Penalty Case Lincare Pays $10 Million and Signs 5-Year CIA To Resolve Allegations of Kickbacks and Self-Referral Violations
6. Resolution of Audit Findings on States' Beneficiary Eligibility Determinations for Medicaid and the State Children's Health Insurance Program (A-07-06-03073)
7. Nursing Home Enforcement: Application of Mandatory Remedies (OEI-06-03-00410)
8. Use of the Departmental Alert List by HRSA (OEI-02-03-00011)
9. Determining Average Manufacturers Prices for Prescription Drugs Under the Deficit Reduction Act of 2005 (A-06-06-00063)
10. Review of Georgia 's Medicaid Cost Outlier Payments (A-04-04-00009)
11. Review of the North Shore University Hospital's Controls to Ensure Accuracy of Wage Data Used for Calculating Inpatient Prospective Payment System Wage Indexes (A-02-05-01008)
12. Review of Valley Baptist Medical Center 's Reported Fiscal Year 2003 Wage Data (A-06-06-00037)
13. Review of the Hospital Wage Index at Baylor University Medical Center (A-06-06-00038)#13
1. OIG Reports More Than $1 Billion in Recoveries From Fighting Fraud, Waste, and Abuse
The Department of Health and Human Services (HHS) Office of Inspector General (OIG) Semiannual Report to Congress announced expected recoveries of $1.02 billion for the first half of fiscal year (FY) 2006 from efforts to reduce fraud, waste, and abuse in HHS programs.
Specifically, OIG's $1.02 billion in expected recoveries encompasses $288 million in audit-related recoveries, and $732.4 million in investigative-related recoveries. Additional savings from implemented recommendations are calculated annually and will be reported in the fall.
"These recoveries reflect their dedicated efforts to reduce fraud, waste, and abuse in HHS programs," said Inspector General Daniel R. Levinson. "It is through a combination of vigilant oversight, outreach to the health care community, and partnership with government agencies at all levels that OIG are able to accomplish this mission."
2. Review of Targeted Case Management Services Rendered by the Massachusetts Department of Social Services During Federal Fiscal Years 2002 and 2003 (A-01-04-00006)
Their objective was to determine whether the Massachusetts Office of Medicaid (the State agency) claimed allowable Medicaid targeted case management (TCM) services rendered by Department of Social Services (Social Services) during Federal fiscal years (FYs) 2002 and 2003. The State agency claimed unallowable Medicaid TCM services rendered by Social Services. The Social Services TCM monthly rates charged to Medicaid included social workers' salary costs related to direct social services, such as child protection and welfare services. Eliminating these unallowable costs from the calculation of the monthly rates, OIG determined that the costs of TCM services claimed through the State agency were overstated by $171,147,058 ($86,645,347 Federal share). OIG was unable to express an opinion on the remaining $26,571,177 ($13,460,989 Federal share) that related to the assessment of beneficiaries' service needs, development of a specific care plan, referral to needed services, and monitoring and follow up. Although these services may appear to constitute allowable TCM services under existing policy, their audit work identified a significant risk that the services may have already been reimbursed under other Federal programs. OIG recommended that the State agency: (1) refund to the Federal Government $86,645,347 in unallowable costs; (2) work with CMS to determine the allowability of the $26,571,177 ($13,460,989 Federal share) on which OIG was unable to express an opinion; (3) refund to the Federal Government any TCM costs claimed and reimbursed subsequent to their audit period that represent direct medical, educational, or social services; and (4) establish procedures to ensure that TCM rates used to claim Medicaid reimbursement do not include payment for direct medical, educational, or social services to which the Medicaid-eligible individual has been referred. In its comments on their draft report, the State agency disagreed with their findings and recommendations.
To access the full article: http://www.oig.hhs.gov/oas/reports/region1/10400006.pdf
3. Review of Fiscal Year-End Billing For Inpatient Rehabilitation Facility Claims Under The Administrative Responsibility Of Palmetto GBA For 2002 (A-01-05-00522)
Their objective was to determine whether inpatient rehabilitation facilities (IRFs) under the administrative responsibility of Palmetto, GBA (Palmetto) billed fiscal year-end inpatient rehabilitation claims in accordance with Medicare requirements during the transition to the prospective payment system in 2002. Eleven IRFs did not bill fiscal year-end claims in accordance with Medicare requirements. As a result, Medicare made net overpayments of $207,289. Most of the payment errors occurred because the IRFs did not have adequate controls to ensure that claims submitted at fiscal year-end were billed in accordance with Medicare requirements. Additionally, several IRFs stated that they had split their claims as a result of discussions with Palmetto or in response to error messages received from the claims processing system. OIG was unable to validate these assertions. OIG recommended that Palmetto make the appropriate adjustments to paid claims that resulted in net overpayments of $207,289 to the 11 IRFs and continue education efforts for IRF and Palmetto personnel. Palmetto agreed with their recommendations.
To access the full article: http://www.oig.hhs.gov/oas/reports/region1/10500522.pdf
4. Review of Ambulance Services Provided by American Medical Response of Massachusetts, Inc. (A-01-04-00502)
Their objective was to determine whether Medicare payments for ambulance transports and services provided by American Medical Response of Massachusetts, Inc. (AMR) met Medicare reimbursement requirements. For 43 of 100 sampled beneficiaries, medical reviewers determined that AMR received $11,690 in Medicare payments for ambulance transports for the period July 1 through December 1, 2002 .
The OIG recommended that AMR develop better controls and work with the Massachusetts carrier to reimburse the Medicare program for the estimated overpayment. In its response to OIG’s draft report, AMR stated that it has adequate controls in place as a result of its compliance program established under its Corporate Integrity Agreement. AMR agreed with $2,357, or about 20 percent, of OIG’s sampled errors.
To access the full article: http://www.oig.hhs.gov/oas/reports/region1/10400502.pdf
5. OIG Settles Largest Ever Civil Monetary Penalty Case Lincare Pays $10 Million and Signs 5-Year CIA To Resolve Allegations of Kickbacks and Self-Referral Violations
Washington, D.C. - Today Health and Human Services Inspector General Daniel R. Levinson announced that the Office of Inspector General (OIG) has entered into a Settlement Agreement and Corporate Integrity Agreement (CIA) with Lincare Holdings Inc. and its subsidiary Lincare Inc. (Lincare). The settlement resolves allegations that Lincare paid illegal kickbacks and violated the Physician Self-Referral (also known as Stark) Law. Under the settlement terms, Lincare, one of the nation's largest durable medical equipment suppliers, paid $10 million and entered into a 5-year company-wide CIA.
To access the full article: http://www.oig.hhs.gov/publications/docs/press/2006/Lincare051506.pdf
6. Resolution of Audit Findings on States' Beneficiary Eligibility Determinations for Medicaid and the State Children's Health Insurance Program (A-07-06-03073)
The objective of this review was to determine, as of November 1, 2005 , whether CMS had resolved Office of Management and Budget (OMB) Circular A-133 audit findings for fiscal years (FYs) 2002 through 2004 on States' Medicaid and State Children's Health Insurance Program (SCHIP) beneficiary eligibility determinations. CMS had not resolved all Circular A-133 audit findings on States' Medicaid and SCHIP beneficiary eligibility determinations. As of November 1, 2005 , CMS had not resolved eligibility findings in 11 of the 22 FY 2002 audit reports submitted for resolution or in 25 of the 28 FY 2003 audit reports. Furthermore, CMS had not resolved the eligibility findings in the 25 FY 2004 audit reports.
The Medicaid and SCHIP eligibility findings were so significant, i.e., material, that they caused some auditors to issue Circular A-133 reports with qualified opinions for six States for both FYs 2002 and 2003 and for seven States for FY 2004. In addition, auditors disclaimed their opinions on Medicaid eligibility for Georgia 's FYs 2003 and 2004 reports and for Washington 's FY 2004 report.
The OIG recommended that CMS (1) resolve the backlog of unresolved A-133 audit findings and (2) resolve A-133 audit findings on Medicaid and SCHIP beneficiary eligibility determinations within 6 months of receiving the audit reports. CMS agreed with their recommendations but stated that "the overall tone of the findings. . . misrepresents the actions taken, the degree of responsiveness, and the level of commitment by CMS in resolving A-133 audit findings."
To access the full article: http://www.oig.hhs.gov/oas/reports/region7/70603073.pdf
7. Nursing Home Enforcement: Application of Mandatory Remedies (OEI-06-03-00410)
The OIG found in this report that CMS did not apply all remedies against noncompliant nursing homes as required by statute. Of the 55 cases requiring mandatory termination during 2000-2002, CMS did not apply the remedy in 30 cases. All of the facilities that were not terminated had new cases of noncompliance in subsequent surveys serious enough to again require referral to CMS for enforcement action. Additionally, in 42 percent of the 706 cases requiring mandatory denial of payment in 2002, CMS did not apply the remedy or applied it late, largely due to late referral of cases by States. OIG recommends that CMS ensure that facilities facing termination either reach compliance or are terminated within required timeframes, including further prioritizing termination cases. OIG also recommends that CMS address States' late referral of enforcement cases to ensure that mandatory remedies are imposed as required. These recommendations include issuing a written directive to States to reinforce referral requirements, increased monitoring of State referral timeliness, and promoting stronger adherence to State Performance Review standards regarding case referral. CMS did not fully concur with their recommendations.
To access the full article: http://www.oig.hhs.gov/oei/reports/oei-06-03-00410.pdf
8. Use of the Departmental Alert List by HRSA (OEI-02-03-00011)
This inspection describes the extent to which HRSA adheres to the policies governing the departmental Alert List. The Alert List is used by agencies in the Department of Health and Human Services that award grants. It is a list of grantees about which these agencies have concerns due to the grantee's inexperience in handling Federal funds, financial instability, inadequate management systems, history of poor programmatic performance, or for other reasons. OIG reviewed the files of 56 HRSA grantees on the March 24, 2003 , Alert List and conducted interviews with HRSA grants staff to determine the extent to which HRSA is adhering to Department policies. OIG found that HRSA does not consistently follow Alert List policies. Specifically, HRSA does not consistently: (1) place all grantees on the Alert List that are designated "high risk"; (2) check the Alert List prior to awarding a grant; (3) consult with the placing agency to determine the reason for placement; (4) monitor guarantees on the Alert List; and (5) remove grantees in a timely manner or justify retaining a grantee whose name appears on the Alert List for more than 2 years. OIG also found that grants officers do not use the information on the Alert List to make grant decisions and some report concerns about the information on the Alert List. OIG recommended that HRSA ensure that grants officers follow Alert List policies and that HRSA develop methods to ensure that grants officers follow these policies. In commenting on OIG's draft report, HRSA did not respond to OIG’s specific recommendations. OIG expect HRSA's comments on the final report delineate specific actions it plans to take in response to OIG’s findings and recommendations.
To access the full article: http://www.oig.hhs.gov/oei/reports/oei-02-03-00011.pdf
9. Determining Average Manufacturers Prices for Prescription Drugs Under the Deficit Reduction Act of 2005 (A-06-06-00063)
Their objective was to review the requirements for, and manner in which, manufacturers determine (average manufacturer prices) AMPs under section 1927 of Social Security Act. Existing requirements for determining certain aspects of AMPs are not clear and comprehensive, and manufacturers' methods of calculating AMPs are inconsistent. Their discussions with industry groups confirmed the need to clarify requirements and raised additional issues related to the implementation of DRA provisions.
The OIG recommended that the Secretary direct CMS, in promulgating the AMP regulation, to: (1) clarify requirements in regard to the definition of retail class of trade and the treatment of pharmacy benefit manager rebates and Medicaid sales; and, (2) consider addressing issues raised by industry groups, such as: (a) administrative and service fees, (b) lagged price concessions and returned goods, (c) the frequency of AMP reporting, (d) AMP restatements, and (e) baseline AMP. OIG also recommend that the Secretary direct CMS to: (1) issue guidance in the near future that specifically addresses the implementation of the AMP-related reimbursement provisions of the DRA and (2) encourage States to analyze the relationship between AMP and pharmacy acquisition cost before using AMP for their reimbursement methodology.
To access the full article: http://www.oig.hhs.gov/oas/reports/region6/60600063.pdf
10. Review of Georgia 's Medicaid Cost Outlier Payments (A-04-04-00009)
Their objective was to determine whether Georgia 's method of computing inpatient hospital cost outlier payments effectively limited outlier payments to high-cost cases. OIG found that Georgia 's method of computing inpatient hospital cost outlier payments did not effectively limit outlier payments to high-cost cases. Instead of applying a current cost-to-charge ratio (costs divided by charges) to current billed charges from July 1998 through December 2002, the State agency applied an outdated cost-to-charge ratio to current billed charges, thus increasing cost outlier payments.
The State agency relied on historical cost-to-charge ratios because its State plan amendments required the use of audited cost report data to calculate cost-to-charge ratios. Audited cost reports typically run about 4 years behind the current year. Had the State agency applied current cost-to-charge ratios to convert billed charges to costs, it could have saved approximately $22.7 million in cost outlier payments between 1998 and 2002 at the three hospitals reviewed.
The OIG recommended that the State agency amend its Medicaid State plan to require that the data for calculating cost-to-charge ratios be based on submitted cost reports instead of audited cost reports. The State agreed with their recommendation.
To access the full article: http://www.oig.hhs.gov/oas/reports/region4/40400009.pdf
11. Review of the North Shore University Hospital's Controls to Ensure Accuracy of Wage Data Used for Calculating Inpatient Prospective Payment System Wage Indexes (A-02-05-01008)
The objective of their review was to determine whether North Shore University Hospital (the hospital) complied with Medicare requirements for reporting wage data in its fiscal year (FY) 2003 Medicare cost report. The hospital did not fully comply with Medicare requirements for reporting wage data in its FY 2003 Medicare cost report. Specifically, the hospital overstated its wage data by $3,119,582 and 1,567 hours.
The OIG recommended that the hospital: (1) submit a revised FY 2003 Medicare cost report to the fiscal intermediary to correct the wage data overstatements totaling $3,119,582 and 1,567 hours; and (2) implement review and reconciliation procedures to ensure that the wage data reported on future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements. The hospital concurred with three of OIG’s findings, but disagreed with their finding on unfunded pension and post retirement benefit costs.
To access the full article: http://www.oig.hhs.gov/oas/reports/region2/20501008.pdf
12. Review of Valley Baptist Medical Center 's Reported Fiscal Year 2003 Wage Data (A-06-06-00037)
The objective of their review was to determine whether Valley Baptist Medical Center (the hospital) complied with Medicare requirements for reporting wage data in its fiscal year (FY) 2003 Medicare cost report. OIG found that the hospital did not fully comply with Medicare reporting requirements for reporting wage data in its FY 2003 Medicare Cost report. The hospital overstated its wage data by $951,494 and 49,462 hours. OIG recommended that the hospital implement review and reconciliation procedures to ensure that the wage data reported on future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements. In its written comments on OIG’s draft report, the hospital concurred with their findings.
To access the full article: http://www.oig.hhs.gov/oas/reports/region6/60600037.pdf
13. Review of the Hospital Wage Index at Baylor University Medical Center (A-06-06-00038)
The objective of their review was to determine whether Baylor University Medical Center (the hospital) complied with Medicare requirements for reporting wage data in its fiscal year (FY) 2003 Medicare cost report. OIG found that the hospital did not fully comply with Medicare reporting requirements for reporting wage data in its FY 2003 Medicare cost report. OIG recommended that the hospital implement review and reconciliation procedures to ensure that the wage data reported to CMS are accurate, supportable, and in compliance with Medicare requirements. In its written comments on their draft report, the hospital did not concur with two of their findings and noted that a third finding was corrected by the fiscal intermediary.
To access the full article: http://www.oig.hhs.gov/oas/reports/region6/60600038.pdf
For the index of recent OIG Advisory Opinions, follow this link: http://oig.hhs.gov/fraud/advisoryopinions/opinions.html
For more information regarding the OIG's Exclusion Program, please follow this link:
http://oig.hhs.gov/fraud/exclusions.html
If you have any questions or would like to discuss any of these issues with one of Feeley & Driscoll’s healthcare specialists, please contact us at (617) 742-7788 or via e-mail at info@fdcpa.com. |
