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. Audit of Head Start Costs for Fiscal Year Ending June 30, 2005 for Arlington Community Action Program Inc. (A-03-05-00551)
2. Review of Medicare Claims for Air Ambulance Services Paid to the Hospital of the University of Pennsylvania (A-03-04-00023)
3. Review of Medicaid Disproportionate Share Hospital Payments to University Hospital, University of Medicine and Dentistry of New Jersey: July 1, 1995, Through June 30, 2001 (A-02-04-01004)
4. Review of 340B Prices (OEI-05-02-00073)
5. Generic Drug Utilization in State Medicaid Programs (OEI-05-05-00360)
6. Review of Grants Issued to the National Latina/o Lesbian, Gay, Bisexual and Transgender Organization (A-03-05-00351)
7. OIG posts updated exclusion and reinstatement files.
8. Comparison of Fourth Quarter 2005 Average Sales Prices to Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2006 (OEI-03-06-00370)
9. Summary Report on Universities' Compliance With Select Agent Regulations (A-04-05-02006)
10. Review of PCH Health Systems' Medicare Claims for Outpatient Physical and Occupational Therapy Services for Calendar Years 2000 Through 2003 (A-09-04-00069)
11. Review of Claims Billed by Independent Diagnostic Testing Facilities for Services Provided to Medicare Beneficiaries During Calendar Year 2001 (A-03-03-00002)
12. Nursing Home Complaint Investigations (OEI-01-04-00340)
In This Issue:
1. Audit of Head Start Costs for Fiscal Year Ending June 30, 2005 for Arlington Community Action Program Inc. (A-03-05-00551)
The objective of the audit was to determine whether the costs Arlington Community Action Program, Inc. (ACAP) claimed for the Head Start program were allowable under the terms of the grant, applicable Federal regulations, and Office of Management and Budget guidance. OIG determined that ACAP claimed costs that were either unallowable, unsupported, or lack sufficient documentation. OIG did not accept $342,004 and set aside $178,032 for ACF's adjudication. Further, OIG noted that ACAP did not have adequate financial management practices to support Head Start costs as required by Federal regulations. OIG recommended that the Administration for Children and Families (1) request that ACAP refund $342,004 in costs that were either unallowable or unsupported and (2) make a determination on the acceptance of $178,032 of set aside costs that did not have sufficient supporting records for them to determine allowability. At ACF's request, OIG issued the final report directly to ACF's Region III Regional Administrator.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region3/30500551.pdf
2. Review of Medicare Claims for Air Ambulance Services Paid to the Hospital of the University of Pennsylvania (A-03-04-00023)
OIG’s objective was to determine whether the Hospital of the University of Pennsylvania (HUP) claimed Medicare air ambulance services during calendar year 2002 in accordance with Medicare requirements. Contrary to Medicare requirements HUP incorrectly billed 83 of 100 randomly sampled claims. OIG recommended that HUP: refund $114,938 in air ambulance overpayments to the Medicare program; bill only for properly documented transports, accurate mileage and mileage to the nearest appropriate facility; discontinue charges for flying air ambulances when not transporting beneficiaries, report proper fee payment amounts; and determine primary payers on all Medicare claims. HUP generally disagreed with their findings.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region3/30400023.pdf
3. Review of Medicaid Disproportionate Share Hospital Payments to University Hospital, University of Medicine and Dentistry of New Jersey: July 1, 1995, Through June 30, 2001 (A-02-04-01004)
This is the fifth in a series of reports on Medicaid DSH claims that a consultant prepared under a contingency fee contract with New Jersey. The objective of this review was to determine whether disproportionate share hospital (DSH) payments to University Hospital for State fiscal years 1996 through 2001 complied with the hospital-specific limits imposed by section 1923(g) of the Social Security Act (the Act) and the approved State plan. OIG found that DSH payments to University Hospital exceeded the hospital-specific limits imposed by section 1923 (g) of the Act and the approved State plan by $171.4 million ($85.7 million Federal share). New Jersey relied solely on a contractor to prepare and document the additional acute care DSH claims and failed to ensure the accuracy of the claims before submitting them for Federal reimbursement. As a result of the consultant's work, University Hospital received an additional $560 million ($280 million Federal share) for State fiscal years 1996 through 2001.
OIG recommended that New Jersey (1) refund $85,697,689 to the Federal Government, (2) adhere to Federal law and State plan requirements when submitting future DSH claims for Federal reimbursement; and (3) review all work performed by consultants to ensure the veracity of future Medicaid claims to the Federal Government. New Jersey disagreed with $89,500,544 of the $90,582,877 refund recommended in their draft report. New Jersey agreed with the remaining recommendations. After reviewing applicable Federal requirements, the State plan, and New Jersey's comments on their draft report, OIG revised their findings and recommendations where appropriate.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region2/20401004.pdf
4. Review of 340B Prices (OEI-05-02-00073)
Section 340B of the Public Health Service Act created the 340B Drug Discount Program (340B Program) to lower drug prices for more than 12,300 entities, including community health centers, public hospitals, and various Federal grantees. Pharmaceutical manufacturers calculate 340B ceiling prices using a specified formula and must sell their products at or below these prices to continue to receive reimbursement from the Medicaid program. In this evaluation, OIG found that in a single month in 2005, 14 percent of total purchases made by 340B entities exceeded 340B ceiling prices, resulting in total projected overpayments of $3.9 million. The largest price discrepancies in their sample resulted from prices that were not in line with a HRSA policy that directs manufacturers, in very specific situations, to charge entities a penny per unit. Additionally, patterns OIG found in their sample suggest that overpayments varied by the volume of 340B purchases or sales associated with the entities, manufacturers, and wholesalers. Lastly, inaccuracies in HRSA's calculations of the 340B ceiling prices continue to limit its ability to monitor 340B program compliance. OIG recommends that HRSA improve its oversight of the 340B Program to ensure that entities are charged at or below the 340B ceiling price. In addition, HRSA should provide technical assistance regarding 340B Program implementation to all participating entities, manufacturers, and wholesalers. HRSA should also publish guidance regarding its penny price policy, from which the largest price discrepancies in their sample resulted. Finally, OIG recommend that HRSA obtain consistent unit of measure and package size data to accurately calculate 340B ceiling prices.
To access the full article click here: http://www.oig.hhs.gov/oei/reports/oei-05-02-00073.pdf
5. Generic Drug Utilization in State Medicaid Programs (OEI-05-05-00360)
Prescription drug costs are one of the largest and fastest growing Medicaid expenditures. Congress and CMS have expressed support for using generic drugs to contain prescription drug costs. This OIG evaluation found that in 2004, Medicaid demonstrated high utilization of generic drugs. The level of generic drug utilization is affected by how often generics are dispensed when generic substitutes are available ("generic substitution") as well as by physician prescribing habits. On average, generics were dispensed 89 percent of the time when generic substitutes were available. This compares favorably with a 90 percent private sector benchmark. However, 41 percent of prescriptions were for drugs that have no generic substitutes, limiting opportunities to dispense generics. Therefore, on average, 54 percent of all drugs dispensed were generics.
In light of their findings, OIG concluded that many States may have already achieved much of the gains in generic utilization possible through increasing generic substitution. States may realize greater gains by encouraging the prescribing of drugs that have generic equivalents, rather than single source drugs with no generic alternatives. Such efforts should be undertaken with caution to ensure that beneficiaries maintain access to appropriate treatment.
OIG suggest that CMS consider providing information and technical assistance to States that wish to further increase generic drug utilization. In its comments, CMS indicated that it strongly encourages the dispensing of generic drugs as a cost saving measure. CMS concurred with their suggestion and noted that it would share this report with States and encourage States to review their generic drug use by therapeutic class.
To access the full article click here: http://www.oig.hhs.gov/oei/reports/oei-05-05-00360.pdf
6. Review of Grants Issued to the National Latina/o Lesbian, Gay, Bisexual and Transgender Organization (A-03-05-00351)
The objective of their audit was to determine whether before declaring bankruptcy, the National Latina/o Lesbian, Gay, Bisexual and Transgender Organization (LLEGÓ) used Centers for Disease Control and Prevention (CDC) grant funds in accordance with Federal guidelines for allowability. Their analysis of available documentation showed that LLEGÓ incurred $703,181 in unallowable costs: $379,022 in unallowable expenses and $324,159 in expenses that occurred in a prior cooperative agreement period. This was contrary to Office of Management and Budget guidance, which states that Federal funds be used only for the purpose for which they were given. OIG recommended that CDC follow-up with the U.S. Bankruptcy Court as to the repayment of cooperative agreement funds from the LLEGÓ bankruptcy as allowed by 11 U.S.C. chapter 5.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region3/30500351.pdf
7. OIG posts updated exclusion and reinstatement files.
This is the full "Updated LEIE" database file reflecting all OIG exclusion and reinstatement actions up to, and including, those taken in June of 2006. This new, "Updated LEIE" (List of Excluded Individuals and Entities) is a complete database file containing all exclusions currently in effect. Individuals and entities that have been reinstated to the federal health care programs are not included in this file.
This is meant to REPLACE the "Updated LEIE" file made available for download last month. The new file is complete and should NOT be used in conjunction with the monthly exclusion and reinstatement supplements. You can download the full "Updated LEIE" from here: http://oig.hhs.gov/fraud/exclusions/database.html#1
If, though, you are one of the few continuing to use the "Standard LEIE" database file you will need to add the exclusion as well as the reinstatement actions taken in June. These monthly supplement files, which are widely used in other ways as well, are both available for download from here: http://oig.hhs.gov/fraud/exclusions/database.html#2
All of these downloadable files are zipped, self-extracting .dbf files, meaning that they will not open automatically when you click on the links. After you have downloaded the files to your computer (or "disk" in technospeak) and inflated them, the files must be opened into either a spreadsheet program such as Excel, or a database program such as Access.
Basic download instructions are provided on the OIG website here: http://oig.hhs.gov/fraud/exclusions/instructions.html If you would like to have some more comprehensive download instructions emailed to you, just let them know.
Finally, it should be added, the full LEIE database -- complete with these updates -- is included in the OIG "Online Searchable Database" which is very user-friendly and may be accessed here: http://exclusions.oig.hhs.gov/search.html
8. Comparison of Fourth Quarter 2005 Average Sales Prices to Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2006 (OEI-03-06-00370)
In 2005, Medicare began paying for most Part B drugs using a new methodology based on average sales prices (ASP). Pursuant to section 1847A(d)(3) of the Social Security Act, OIG must notify the Secretary of the Department of Health and Human Services if the ASP for a particular drug exceeds the drug's average manufacturer price (AMP) by a threshold of 5 percent. If that threshold is met, section 1847A(d)(3) of the Act grants the Secretary authority to disregard the ASP pricing methodology for that drug and substitute the payment amount for the drug code with the lesser of the widely available market price for the drug (if any) or 103 percent of the AMP. Based on their analysis of data from the fourth quarter of 2005, 46 of 341 Healthcare Common Procedure Coding System (HCPCS) codes had an ASP that exceeded the AMP by at least 5 percent. Twenty of the 46 HCPCS codes were previously eligible for price adjustment as a result of an earlier comparison between ASPs and AMPs, which was performed using data from the third quarter of 2004. If reimbursement amounts for all 46 codes had been based on 103 percent of AMP during the second quarter of 2006, OIG estimate that Medicare expenditures would have been reduced by $16 million.
To access the full article click here: http://www.oig.hhs.gov/oei/reports/oei-03-06-00370.pdf
9. Summary Report on Universities' Compliance With Select Agent Regulations (A-04-05-02006)
This report summarizes the results of OIG’s reviews of 15 universities' compliance with select agent regulations. Due to the sensitivity of the issues OIG identified, OIG restricted the distribution of each report to the individual university and the CDC. The objective of this review was to determine whether each of the 15 universities had established controls over select agents in compliance with Federal regulations.
As required, each of the 15 universities had appointed a "Responsible Official" to provide management oversight of its select agent program. However, at 11 of the 15 universities, certain other controls did not comply with Federal regulations. The 11 universities had weaknesses in at least 1 control area that could have compromised the ability to safeguard select agents from accidental or intentional loss, including: (1) weaknesses in inventory and/or access records; (2) weaknesses in access controls; (3) weaknesses in security plans; (4) not providing training to individuals with access to select agents or not documenting the means used to verify that individuals understood the training; and (5) not addressing required areas in emergency response plans. Officials at the 11 universities generally agreed with their recommendations to strengthen their security controls.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region4/40502006.pdf
10. Review of PCH Health Systems' Medicare Claims for Outpatient Physical and Occupational Therapy Services for Calendar Years 2000 Through 2003 (A-09-04-00069)
OIG’s objective was to determine whether Medicare payments to PCH Health Systems, Inc. (PCH) for outpatient physical and occupational therapy services met Medicare reimbursement requirements. None of PCH's 114 sampled claims for outpatient physical and occupational therapy services provided from 2000 through 2003 met Medicare reimbursement requirements. One hundred and three claims were for medically unnecessary services and eleven claims were not supported. Most of the 114 claims also had other types of errors.
OIG recommended that PCH refund $9,984,065 to the Medicare program and work with the Centers for Medicare & Medicaid Services to determine the allowability of services billed after 2003. Because PCH no longer treats Medicare patients or bills the Medicare program, OIG also recommended that it request its carrier to deactivate PCH's Medicare provider number. PCH did not provide comments to their draft report, issued March 13, 2006. OIG received comments from National Heritage Insurance Company, the Medicare carrier for beneficiaries in California.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region9/90400069.pdf
11. Review of Claims Billed by Independent Diagnostic Testing Facilities for Services Provided to Medicare Beneficiaries During Calendar Year 2001 (A-03-03-00002)
OIG’s objectives were to determine whether: (1) services that IDTFs provided to Medicare beneficiaries with 100 or fewer services during CY 2001 were (a) reasonable and necessary, (b) ordered by a physician, and (c) sufficiently documented in accordance with Federal laws, regulations, and guidelines; and, (2) IDTFs operated in accordance with their initial enrollment applications and subsequent updates filed with the carriers. Services that IDTFs provided to Medicare beneficiaries were not always reasonable and necessary, ordered by a physician, or sufficiently documented. Of the 230 sampled beneficiaries, who received 1,804 IDTF services, 80 beneficiaries received 1,231 services that did not comply with applicable Federal laws, regulations, and guidelines. OIG also found a marked pattern of repetitive use of services. Fifty-five of the sampled beneficiaries accounted for 1,095 of the 1,231 questioned services. These beneficiaries received their services from IDTFs in California and Florida.
Of the 219 IDTFs that provided services to the sampled beneficiaries, 191 did not comply with initial enrollment application and subsequent update requirements. IDTFs did not report operational changes such as the identity and number of technicians, supervising and interpreting physicians, type and model number of equipment, and tests performed. IDTFs also failed to report changes in their ownership and location.
OIG recommended that CMS require its carriers to: (1) recover the $164,839 in overpayments that OIG identified; (2) perform follow-up reviews to identify and recover a potential $71.5 million in improper payments made to IDTFs by the 10 selected carriers, in particular those in California and Florida; and (3) consider performing site visits to monitor compliance with IDTFs' initial enrollment applications and subsequent updates should funding become available.
In its comments on their draft report, CMS agreed with the first two recommendations subject to verification of the overpayments by the Medicare contractors and other conditions. With respect to the third recommendation, CMS stated that, because of funding limitations, it was not able to require Medicare carriers to conduct site visits to monitor IDTF compliance. While OIG continue to believe that onsite visits are a useful tool to ensure that only legitimate IDTFs are enrolled in the Medicare program, OIG recognize that funding limitations may preclude carriers from performing such visits. Accordingly, OIG have modified their third recommendation to acknowledge those funding limitations.
To access the full article click here: http://www.oig.hhs.gov/oas/reports/region3/30300002.pdf
12. Nursing Home Complaint Investigations (OEI-01-04-00340)
This report assesses (1) whether State agencies investigate nursing home complaints in accordance with program requirements, and (2) CMS's monitoring of State agency performance in investigating nursing home complaints. OIG found that State agencies did not investigate some of the most serious nursing home complaints within the required timeframe, including 7 percent of complaints alleging immediate jeopardy and 27 percent of complaints alleging actual harm (high). In addition, while the Federal complaint tracking system, ASPEN Complaints/Incidents Tracking System (ACTS), shows potential for managing complaints, State agencies have not taken full advantage of this system. Finally, CMS oversight of nursing home complaint investigations is limited. OIG found that CMS conducts few Federal Oversight and Support Surveys (FOSS), which allow CMS's regional offices an opportunity to observe a State agency's complaint investigation process. However, CMS guidance states that State agencies should provide CMS with at least 2 weeks' advance notice of scheduled surveys, thus limiting the use of the FOSS for the most serious nursing home complaints. OIG recommends that CMS require State agencies to meet the 10-day timeframe for investigating complaints involving actual harm (high), increase oversight of the State agencies, and offer additional ACTS training to its regional offices as well as State agencies. OIG also recommended that CMS remove the 2-week advance notice period for FOSS. CMS concurred with their first three recommendations, but did not concur that it should eliminate the 2-week advance notice for FOSS.
To access the full article click here: http://www.oig.hhs.gov/oei/reports/oei-01-04-00340.pdf
For the index of recent OIG Advisory Opinions, follow this link: http://oig.hhs.gov/fraud/advisoryopinions/opinions.html
To see "Frequently Asked Questions" (FAQs) on the OIG Advisory Opinion process, go here: http://oig.hhs.gov/fraud/advisoryopinions/aofaq.htm
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. |
