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. Review of Subaward Costs Claimed by Boston University on NIH Grant Number 5 U01 HL066582-04 and 3 U01 HL066582-04S1 From August 1, 2003, Through July 31, 2005 (A-01-06-01500)
2. Review of Vermont's Accounts Receivable System For Medicaid Provider Overpayments (A-01-06-00002)
3. Review of Medicaid Eligibility in New York State (A-02-05-01028)
4. States' Provider Safeguards for Medicaid Personal Care Services (OEI-07-05-00250)
5. Review of Organ Acquisition Costs Claimed by Certified Transplant Centers (A-09-05-000034)
6. Contracting Practices for Tennessee Home and Community-Based Services for Mentally Retarded Persons (A-04-03-03025)
7. Review of Medicaid Community Mental Health Provider Services In Illinois (A-05-05-00055)
8. Duplicate Medicare Payments to Cost-Based Health Maintenance Plan Excellus Health Plan for the Fiscal Years 2002, Through 2004 (A-05-06-00030)
9. Review of Comprehensive Outpatient Rehabilitation Facility Therapy Services Provided by ABC Total Rehabilitation Care, Inc. (A-04-04-02011)
10. Review of Accounts Receivable at the IHS Billings Area Office (A-07-06-01023)
11. Review of Compliance With Billing Provisions Under The Prospective Payment System For Home Health Agencies' Therapy Services - Pacific Home Health Care, Inc. (A-05-04-00103)
12. Review of Excess Benefit Plan Costs Claimed by CIGNA for Medicare Reimbursement for Fiscal Years 1991 Through 2004 (A-07-06-00215)
13. Guidance on Physician Investments in Medical Device Manufacturers and Distributors
14. Report on the Medicare Drug Discount Card Program Sponsor McKesson Health Solutions (A-06-06-00022)
15. Report on the Medicare Drug Discount Card Program Sponsor Medco Health Solutions (A-06-05-00066)
1. Review of Subaward Costs Claimed by Boston University on NIH Grant Number 5 U01 HL066582-04 and 3 U01 HL066582-04S1 From August 1, 2003, Through July 31, 2005 (A-01-06-01500)
OIG’s objective was to determine whether Boston University (the University) claimed subaward costs under a Harvard University grant from the National Institutes of Health in accordance with the terms and conditions of the subaward and applicable Federal regulations. From August 1, 2003, through July 31, 2005, the University claimed $11,234 in unallowable salary cost transfers and related fringe benefits and indirect costs that did not comply with Federal regulations and the terms of the subaward. In addition, the University did not submit its final invoice to the prime grantee within the specified time frame.
OIG recommended that the University: (1) comply with Federal and University requirements to ensure that cost transfers are properly authorized and documented, (2) establish controls to ensure that final invoices are submitted promptly, and (3) work with the prime grantor to resolve the $11,234 received from NIH for inappropriate cost transfers. In its response to OIG’s draft report, the University agreed with OIG’s procedural recommendations. However, the University maintained that all costs that it claimed under the subaward were reasonable, allocable, and allowable.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region1/10601500%20.pdf
2. Review of Vermont's Accounts Receivable System For Medicaid Provider Overpayments (A-01-06-00002)
OIG’s objective was to determine if the Vermont Medicaid State agency reported overpayments to Medicaid providers as credits to the Medicaid program in accordance with Federal requirements during the period January 1, 2004, through June 30, 2005. The State agency did not report overpayments totaling $343,925 ($201,383 Federal share) in accordance with Federal requirements. Specifically, the State agency's recovery units had identified overpayments to providers totaling $172,441 ($100,861 Federal share) that the State agency had not credited to the Medicaid program. In addition, the State agency did not credit the Medicaid program for overpayments totaling $171,484 ($100,522 Federal share) that were discovered through the cost report settlement process.
OIG recommended that the State agency (1) report a credit of $201,383, the Federal share of provider overpayments that it owes the Medicaid program; (2) establish formal policies and procedures for processing all provider overpayments that the State agency recovery units and the intermediary identify; and (3) ensure that all overpayments to providers are reported as credits to the Medicaid program within 60 days of discovery, as Federal regulations require. In its response to OIG’s draft report, the State agency indicated that it has made or will make the recommended adjustments. The State agency also agreed with OIG’s procedural recommendations.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region1/10600002%20.pdf
3. Review of Medicaid Eligibility in New York State (A-02-05-01028)
OIG’s objective was to determine the extent to which the State agency made Medicaid payments on behalf of beneficiaries who did not meet Federal and State eligibility requirements. The State agency (1) made some Medicaid payments on behalf of beneficiaries who did not meet Federal and State eligibility requirements and (2) did not always adequately document eligibility determinations. Of the 200 payments in OIG’s statistical sample, 16 payments totaling $874 (Federal share) were unallowable because the beneficiaries were ineligible for Medicaid. In addition, for 58 sampled payments totaling $10,699 (Federal share), the case files did not contain all documentation supporting eligibility determinations as required. As a result, for the 6-month audit period from January 1 through June 30, 2005, OIG estimated that the State agency made 4,217,888 payments totaling $230,375,748 (Federal share) on behalf of ineligible beneficiaries. OIG also estimated that case file documentation did not adequately support eligibility determinations for an additional 15,289,843 payments totaling $2,820,569,979 (Federal share).
OIG did not recommend recovery primarily because, under Federal laws and regulations, a disallowance of Federal payments for Medicaid eligibility errors can occur only if the errors are detected through a State's Medicaid eligibility quality control program. OIG recommended that the State agency use the results of this review to help ensure compliance with Federal and State Medicaid eligibility requirements. Specifically, the State agency should (1) reemphasize to beneficiaries the need to provide accurate and timely information and (2) require its district office employees to verify eligibility information and maintain appropriate documentation in its case files.
The State agency described some actions being taken to help ensure compliance with Federal and State Medicaid eligibility requirements. However, the State agency stated that OIG had equated the requirement to have "facts" in the file to support an eligibility determination with having independent documents that are not required by CMS. OIG agree that the State agency does not need to redocument existing eligibility information. However, for some sampled payments, OIG could not make eligibility determinations based on the information available to them. When OIG could not locate the necessary records, OIG categorized the cases as "insufficient evidence to support eligibility determinations," not as "eligibility errors."
To access the full article, click here: http://oig.hhs.gov/oas/reports/region2/20501028.pdf
4. States' Provider Safeguards for Medicaid Personal Care Services (OEI-07-05-00250)
The Medicaid State Manual requires States to develop qualifications for attendants who provide care to Medicaid beneficiaries. The manual does not list specific qualifications, but offers examples of requirements States may establish to ensure that attendants provide high-quality personal care. This evaluation found that States have established multiple sets of attendant requirements that often vary among programs and by delivery models within programs, resulting in 300 sets of attendant requirements nationwide. Because States had established different requirements for various programs and/or delivery models, attendants may need to meet different requirements depending on the programs and delivery model through which a beneficiary is being served. Only seven States applied uniform requirements to all the programs within that State, and there were five programs nationwide using the consumer-directed delivery model that had no requirements.
The six most commonly established requirements for attendants included background checks, training, supervision, age, health, and education/literacy. However, States defined these requirements differently and utilized them in different combinations. Of the 300 requirement sets, 245 included a background check requirement, 227 included a training requirement, 218 included a minimum age requirement, 197 included a supervision requirement, 161 included a minimum age requirement, and 124 included literacy or education requirements. States were monitoring compliance with these attendant requirements on two levels. At the first level, States delegated responsibility for ensuring that attendants met requirements to another entity (e.g., home health or personal care service agency, beneficiary, case manager). At the second level, the State retained direct responsibility by ensuring that the entities with primary responsibility fulfilled their oversight duties.
To access the full article, click here: http://oig.hhs.gov/oei/reports/oei-07-05-00250.pdf
5. Review of Organ Acquisition Costs Claimed by Certified Transplant Centers (A-09-05-000034)
This report consolidates the results of OIG’s audits of 11 centers. The objective of OIG’s audits was to determine whether the 11 centers claimed allowable organ acquisition costs on their Medicare cost reports. The 11 centers did not always comply with Medicare regulations and guidelines for claiming organ acquisition costs. Of the almost $80 million of costs audited, approximately $33 million complied with Medicare requirements for claiming, allocating, and documenting organ acquisition costs. However, almost $47 million did not comply with Medicare's definition of organ acquisition costs, exceeded Medicare's limits on physician salaries, or was not allocated or documented properly. Based on the fiscal intermediaries' revisions to the 11 centers' cost reports for unallowable and unsupported costs, OIG estimates that Medicare's share of the $47 million is approximately $28 million.
OIG recommended that CMS consider the results of OIG’s 11 audits in prioritizing areas to be evaluated in annual audits by the fiscal intermediaries. CMS agreed with OIG’s recommendation.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region9/90500034A.pdf
6. Contracting Practices for Tennessee Home and Community-Based Services for Mentally Retarded Persons (A-04-03-03025)
The objective of OIG’s audit was to determine whether the State Medicaid agency complied with Federal and State regulations in awarding and monitoring contracts for the home and community-based services (HCBS) mental retardation and developmental disabilities program in the State of Tennessee. The State Medicaid agency, through the Division of Mental Retardation Services (DMRS), did not comply with Federal and State regulations in awarding and monitoring HCBS contracts. Of the 11 judgmentally selected HCBS contracts OIG reviewed, none completely complied with regulations. The regulatory violations occurred because the State Medicaid agency did not establish adequate procedures to monitor DMRS's contracting activities, and DMRS lacked sound administrative controls over the contracting process. By not following Federal and State regulations governing the awarding and monitoring of contracts, the State agency had no assurance that the 4,300 mentally retarded and developmentally disabled beneficiaries received the intended HCBS benefits.
OIG recommended that the State Medicaid agency: (1) establish a system of procedures and controls that ensures all HCBS contracts are awarded using a process that follows Federal and State regulations and the Centers for Medicare & Medicaid Services program guidelines and (2) increase its contracting and monitoring oversight to include tracking documents through the award process, maintaining contracting records, establishing a system to ensure that contracts are monitored in a timely manner, and retaining monitoring reports. In written comments to the draft report, State agency officials concurred with OIG’s conclusions and recommendations.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region4/40303025.pdf
7. Review of Medicaid Community Mental Health Provider Services In Illinois (A-05-05-00055)
The audit objective was to determine whether Medicaid Community Mental Health Provider (CMHP) services in Illinois were provided by qualified staff, were adequately documented, and were accurately paid on behalf of eligible beneficiaries. Based on a statistical projection of the sample results, OIG estimate that Illinois overpaid CMHPs at least $11,477,280 ($5,971,577 Federal share) in reimbursement for services provided during FY 2003. The overpayments resulted from the providers' non-compliance with either the Federal requirements of the State Medicaid Manual or the State requirements of the approved State plan, the Illinois Administrative Code, and/or payment rate schedules.
OIG recommended that Illinois refund $5,971,577 to the Federal Government and furnish written notification to CMHPs reminding them to prepare and retain complete documentation to fully support all applicable Federal and State claiming provisions. Illinois did not address OIG’s recommendations, but stated that it would use the results of the audit to reiterate required policies and improve its administration of the program.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region5/50500055.pdf
8. Duplicate Medicare Payments to Cost-Based Health Maintenance Plan Excellus Health Plan for the Fiscal Years 2002, Through 2004 (A-05-06-00030)
OIG’s objective was to determine whether medical services provided for Excellus Health Plan's (Excellus's) enrollees by its capitated provided were reimbursed under Excellus's Medicare cost report and also through the Medicare fee-for-service payment system. OIG determined that Excellus's capitated provider filed Medicare claims, for which they were paid on a fee-for-service basis, while under a capitation arrangement with Excellus. The capitation arrangement, which provides for a per-member, per-month payment to Excellus's capitated provider, covered allowable service performed by the provider to Excellus's enrollees.
Medicare reimbursed Excellus for the capitation payments made to the provider via the Medicare cost reports; therefore, the fee-for-service claims paid directly to the provider by Medicare are considered overpayments since Medicare has, in effect, paid twice for the same service. During OIG’s audit period, in appropriate Medicare fee-for-service billings by Excellus's capitated provider amounted to $539,138.
OIG recommended that Excellus recover the $539,138 in duplicate Medicare fee-for-service claims and that Excellus develop an efficient and effective billing process system to preclude and detect duplicate payments. While Excellus concurred that there were instances of duplicate payments, they did not believe that they have the necessary information to form an opinion on the total overpayment amount.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region5/50600030.pdf
9. Review of Comprehensive Outpatient Rehabilitation Facility Therapy Services Provided by ABC Total Rehabilitation Care, Inc. (A-04-04-02011)
The objective of OIG’s review was to determine whether payments to ABC Total Rehabilitation Care, Inc. (ABC) for physical therapy, speech-language pathology, and occupational therapy services were provided in accordance with Medicare reimbursement requirements. With the assistance of a program safeguard contractor, OIG reviewed selected claims submitted by ABC and paid by Medicare. ABC received $27,602 in unallowable payments for therapy services associated with 88 sampled claims, which contained 1,570 services that did not meet Medicare reimbursement requirements. Based on the results of OIG’s random sample, OIG estimates that ABC received $226,673 in payments for unallowable services. These services did not meet Medicare reimbursement requirements because: (1) services billed were rendered outside the approved plan of care, (2) services billed did not meet Medicare duration of therapy requirements, (3) documentation did not meet Medicare standards to support that services were actually provided, and (4) services billed were not medically necessary.
OIG recommended that ABC: (1) refund to the Medicare program the $226,673 in payments for services billed from January 1, 2002, through December 31, 2002, that did not meet Medicare reimbursement requirements; (2) follow its written policies and procedures to ensure plans of care contain all required elements and that services are adequately documented; (3) update its written policies and procedures to address Medicare requirements for duration of therapy services, identification of services rendered outside of the approved plan of care, and documentation of the patient's need for neuromuscular re-education; and (4) identify and submit adjusted claims for services provided subsequent to OIG’s audit period that did not meet Medicare reimbursement requirements. ABC management chose not to provide comments on OIG’s draft report findings and recommendations.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region4/40402011.pdf
10. Review of Accounts Receivable at the IHS Billings Area Office (A-07-06-01023)
The objective of OIG’s review was to determine whether Billings maintained its accounts receivable for fiscal years (FYs) 2003-2005 pursuant to certain Federal requirements. OIG found that Billings did not maintain its accounts receivable for FYs 2003-2005 pursuant to certain Federal requirements. Specifically, Billings did not reconcile its general ledger to the subsidiary ledger or perform a thorough investigation of the differences. Additionally, Billings did not include Medicaid accounts receivable in its automated subsidiary ledger. On September 30, 2003, differences between the general and subsidiary accounts receivable balances totaled approximately $6.1 million. Although the U.S. Department of Health and Human Services (HHS) and IHS had developed policies and procedures to perform the required reconciliation, Billings did not follow them. As a result, Billings did not adequately safeguard the accounts receivable.
OIG recommended that Billings: (1) follow HHS and IHS policies and procedures that require it to reconcile its accounts receivable subsidiary and general ledgers monthly, and (2) maintain Medicaid accounts receivable on its automated subsidiary ledger system. IHS concurred with the audit finding and recommendations. IHS's comments are included in their entirety in the Appendix.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region7/70601023.pdf
11. Review of Compliance With Billing Provisions Under The Prospective Payment System For Home Health Agencies' Therapy Services - Pacific Home Health Care, Inc. (A-05-04-00103)
The objective of this audit was to determine whether selected home health claims that included therapy services provided by Pacific Home Care (Pacific) to Medicare beneficiaries met Federal requirements and were appropriately paid. Pacific was overpaid $108,849 for therapy and skilled nursing services that did not comply with Federal requirements. A medical record review performed by the Program Safeguard Contractor determined that 51 of 100 sampled claims, with 10 or more therapy services, were inappropriately paid because they were: (i) not reasonable and medically necessary; (ii) not provided as ordered by the physician; (iii) not supported by documentation in the medical record; or (iv) based on incorrect payment codes, which resulted in lower allowable reimbursement.
OIG recommended that Pacific work with the intermediary to reimburse the Medicare program $108,849 for unallowable costs, identify and adjust claims for Medicare overpayments received subsequent to the audit period, establish quality assurance procedures, and strengthen controls to ensure that claims are medically necessary, properly authorized by a physician, and supported by documentation in the medical record. Pacific did not directly address OIG’s recommendation to refund $108,849, but stated that 13 claims should be accepted because of errors that its computer system had generated during OIG’s review. Pacific stated that they have established better controls.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region5/50400103.pdf
12. Review of Excess Benefit Plan Costs Claimed by CIGNA for Medicare Reimbursement for Fiscal Years 1991 Through 2004 (A-07-06-00215)
The objective of OIG’s review was to determine the allowability of excess benefit plan (EBP) costs claimed by CIGNA for Medicare reimbursement for fiscal years (FYs) 1991 through 2004. OIG found that CIGNA claimed unallowable EBP costs for FYs 1991 through 2004. During this period, the allowable EBP costs were $213,630. However, CIGNA claimed EBP costs of $329,296 for Medicare reimbursement. CIGNA claimed $115,666 of unallowable EBP costs because it did not claim EBP costs in accordance with the Cost Accounting Standards (CAS).
OIG recommended that CIGNA revise its final administrative cost proposals for FYs 1991 through 2004 to reduce its claimed EBP costs by $115,666. OIG also recommend that CIGNA claim future EBP costs in accordance with the CAS. CIGNA concurred with OIG’s findings and stated that it will be working with CMS to settle the $115,666 owed.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region7/70600215.pdf
13. Guidance on Physician Investments in Medical Device Manufacturers and Distributors
To access the letter: http://oig.hhs.gov/fraud/docs/alertsandbulletins/GuidanceMedicalDevice%20(2).pdf
14. Report on the Medicare Drug Discount Card Program Sponsor McKesson Health Solutions (A-06-06-00022)
The objectives of OIG’s review were to determine whether McKesson Health Solutions (McKesson) complied with Federal requirements to ensure that beneficiaries did not exceed their transitional assistance (TA) limits; applied TA funds only to covered drugs; passed on negotiated prices to beneficiaries and offered the lower of the negotiated prices or the usual and customary prices; and supported the expenditures and withdrawals it reported to CMS. OIG found that McKesson properly supported the expenditures it made on behalf of beneficiaries and the withdrawals from the payment management system. However, McKesson did not have proper procedures in place to ensure that it always complied with Federal requirements to ensure that beneficiaries did not exceed their TA fund limits, applied TA funds only to covered drugs, and passed on negotiated prices to beneficiaries. As a result, CMS overpaid McKesson $176,032 for beneficiaries who exceeded their TA limits and $135,494 for excluded drugs for the period July 12, 2004, through July 31, 2005. In September 2005, McKesson reimbursed CMS $44 for excluded drugs for the period January through August 2005.
OIG recommended that McKesson reimburse CMS $176,032; determine whether the amount McKesson reimbursed CMS for excluded drugs included any of the $135,494 in TA funds identified in the audit and reimburse the difference; and implement policies and procedures to ensure that it (1) does not pay for statutorily excluded drugs with CMS funds and (2) offers negotiated prices to the beneficiaries. In written comments, McKesson stated that it would work with IntegriGuard on an audit of the TA fund expenditures and will reimburse CMS for any amount it determines exceeded beneficiaries' TA fund limits, but will not reimburse CMS for the excluded drugs for which OIG believes it paid. OIG continues to believe that McKesson should reimburse CMS $135,494 for the TA funds it used to pay for excluded drugs.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region6/60600022.pdf
15. Report on the Medicare Drug Discount Card Program Sponsor Medco Health Solutions (A-06-05-00066)
The objective of OIG’s review were to determine whether Medco Health Solutions (Medco) complied with Federal requirements to (1) ensure that beneficiaries did not exceed their transitional assistance (TA) limits, (2) apply TA funds only to covered drugs, (3) pass on negotiated prices to beneficiaries and offer the lower of the negotiated prices or the usual and customary prices, and (4) support the expenditures and withdrawals it reported to CMS. Medco properly recorded on the Transitional Assistance Monthly Expenses and Reconciliation Report the expenditures it made on behalf of beneficiaries and the withdrawals it made, as reflected on its bank deposit records, to recoup the expenditures. However, Medco did not have proper procedures in place to ensure that it always complied with Federal requirements to ensure that beneficiaries did not exceed their TA fund limits, apply TA funds only to covered drugs, and pass on negotiated prices to beneficiaries. As a result, CMS overpaid Medco $43,103 for beneficiaries who exceeded their TA limits and $125,679 for excluded drugs for the period July 12, 2004, through July 31, 2005.
OIG recommended that Medco: reimburse CMS for $43,103; determine whether the amount Medco reimbursed CMS for excluded drugs included any of the $125,679 in TA funds identified in the audit and reimburse the difference; and implement policies and procedures to ensure that it (1) does not pay for statutorily excluded drugs with CMS funds and (2) offers negotiated prices to the beneficiaries. Medco agreed that errors had occurred, but did not agree with the dollar amounts OIG identified.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region6/60500066.pdf
For the List of Excluded Individuals/Entities (LEIE), follow this link:
http://oig.hhs.gov/fraud/exclusions/listofexcluded.html
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. |
