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. Report on the Medicare Drug Discount Card Program Sponsor Computer Sciences Corporation (A-06-06-00112)
2. Review of Supplemental Executive Retirement Plan Costs Claimed by First Coast Service Options for Medicare Reimbursement for Fiscal Years 2003 Through 2005 (A-07-06-00217)
3. Review of Medicare Contractor's Pension Segmentation Requirements at CIGNA for the Period January 1, 1991, to January 1, 2004 (A-07-05-00189)
4. Preadmission Screening and Resident Review for Younger Nursing Facility Residents With Serious Mental Illness (OEI-05-05-00220)
5. Preadmission Screening and Resident Review for Younger Nursing Facility Residents With Mental Retardation (OEI-07-05-00230)
1. Report on the Medicare Drug Discount Card Program Sponsor Computer Sciences Corporation (A-06-06-00112)
The objectives of OIG’s review were to determine whether Computer Sciences Corporation (CSC) complied with Federal requirements to ensure that beneficiaries did not exceed their transitional assistance (TA) limits, apply TA funds only to covered drugs, pass on negotiated prices to beneficiaries and offer the lower of the negotiated prices or the usual and customary prices, and support the expenditures and withdrawals it reported to CMS. CSC properly passed on the lower of the negotiated prices or the usual and customary prices to the beneficiaries. However, CSC 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, pass on to beneficiaries the proper amount of rebate included in the negotiated prices, and properly support the expenditures it made on behalf of beneficiaries.
As a result, CMS overpaid CSC $450,519 for beneficiaries who exceeded their TA limits and $156,305 for excluded drugs for the period July 12, 2004, through July 31, 2005. CSC reimbursed CMS $203,577 for excluded drugs. Also, CSC reported on its Transitional Assistance Monthly Expense and Reconciliation Reports (TAMERs) $918,339 more than the beneficiary claims totaled. During OIG’s audit, CSC corrected the errors it made and reimbursed CMS for the inappropriate expenditures it recorded on its TAMERs. In its written comments on our draft report, CSC agreed with all of the findings and stated that it will reimburse the amount it still owes for excluded drugs, but was requesting a waiver from CMS on the amount it paid for exceeding the TA fund limits because the beneficiaries benefited from the overpayments.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region6/60600112.pdf
2. Review of Supplemental Executive Retirement Plan Costs Claimed by First Coast Service Options for Medicare Reimbursement for Fiscal Years 2003 Through 2005 (A-07-06-00217)
The objective of OIG’s review was to determine the allowability of the Supplemental Executive Retirement Plan (SERP) costs claimed by First Cost Service Options (FCSO) for Medicare reimbursement for fiscal years (FYs) 2003-2005. OIG found that FCSO claimed unallowable SERP costs for FYs 2003-2005. During this period, the allowable SERP costs were $332,880. However, FCSO claimed SERP costs of $414,300 for Medicare reimbursement. FCSO did not claim SERP costs in accordance with the Federal Acquisition Regulations (FAR) and the Cost Accounting Standards (CAS). As a result, FCSO claimed $81,420 of unallowable SERP costs.
OIG recommended that FCSO revise its Final Administrative Cost Proposals for FYs 2003-2005 to reduce its claimed SERP costs by $81,420. OIG also recommend that FCSO claim future SERP costs in accordance with the FAR and the CAS. In written comments on OIG’s draft report, FCSO disagreed with the compensation benchmarks used in our calculations to establish and limit the reasonableness of SERP costs. However, FCSO stated that it would revise claims for FYs 2003-2005 to reduce claimed SERP costs by $81,420.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region7/70600217.pdf
3. Review of Medicare Contractor's Pension Segmentation Requirements at CIGNA for the Period January 1, 1991, to January 1, 2004 (A-07-05-00189)
The objectives of OIG’s review were to determine whether CIGNA complied with the Medicare contracts' pension segmentation requirements while: (1) identifying the Medicare segment's initial asset allocation and (2) updating the Medicare segment's assets from the initial asset allocation to January 1, 2004. OIG found that CIGNA complied with the Medicare contracts' pension segmentation requirements when identifying the Medicare segment's initial assets as of January 1, 1991. However, it did not comply with the contract when updating the segment's assets to January 1, 2004. The understatement primarily resulted from the update of assets and the actuarial approach used in allocating contributions and prepayments to the Medicare segment. As a result, CIGNA understated the January 1, 2004, Medicare segment assets by $99,898.
OIG recommended that CIGNA: (1) increase Medicare segment pension assets by $99,898 as of January 1, 2004, and (2) implement controls to ensure that the Medicare segment's assets are updated in accordance with the Medicare contracts. CIGNA disagreed in part with our original recommendation to increase Medicare segment assets by $158,339. However, CIGNA did agree to update future Medicare segment assets in accordance with Medicare contracts.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region7/70500189.pdf
4. Preadmission Screening and Resident Review for Younger Nursing Facility Residents With Serious Mental Illness (OEI-05-05-00220)
The Omnibus Reconciliation Act of 1987 mandated preadmission screening for individuals with mental illness to ensure that only individuals needing nursing facility level of care are admitted and that these individuals receive services determined by the Preadmission Screening and Resident Review (PASRR) process. This report (1) examines the extent to which PASRR requirements were addressed for Medicaid nursing facilities residents 22 to 64 with serious mental illness within selected States and selected nursing facilities and (2) assesses Federal and State oversight of the PASRR process.
OIG found that almost all sampled residents with serious mental illness had a Level I screen and most screens met Federal requirements. Two-thirds of sampled residents had evidence of a Level II PASRR. However, only 5 percent of these met all Federal requirements. For sampled residents who received a Level II PASRR, 85 percent received mental health service recommendations. Thirty-three percent had all the recommended services incorporated into their nursing facility care plans. Only two of five selected States consider community-based placements during the Level II PASRR, despite Federal regulations requiring such consideration.
Lastly, OIG found that CMS conducted limited oversight, and that all five selected States monitor aspects of the PASRR process. OIG recommend that CMS hold State Medicaid agencies responsible for ensuring compliance with Federal requirements. OIG also recommend that CMS hold State Medicaid agencies responsible for considering community placements during the Level II PASRR process. Lastly, OIG recommend that CMS revise survey and certification requirements to ensure systematic oversight of the PASRR. CMS concurred with all OIG recommendations.
To access the full article, click here: http://oig.hhs.gov/oei/reports/oei-05-05-00220.pdf
5. Preadmission Screening and Resident Review for Younger Nursing Facility Residents With Mental Retardation (OEI-07-05-00230)
The Omnibus Budget Reconciliation Act of 1987 mandated preadmission screening and resident review (PASRR) for mental retardation to ensure that only individuals needing nursing facility level of care are admitted and that these individuals receive services determined by the PASRR process. This report (1) examines the extent to which PASRR requirements were addressed for Medicaid nursing facility residents aged 22 to 64 with mental retardation within selected States and selected nursing facilities, and (2) assesses Federal and State oversight of the PASRR process.
OIG found that while Level I screens were present in 88 percent of selected resident case files, one-fourth of these were completed late. Fifty-two percent of selected resident case files contained neither a Level II evaluation nor a Level II determination. Additionally, 22 percent of sampled Level II evaluations did not contain evidence that the evaluator assessed whether the individual's total needs could be met in a community setting.
Lastly, OIG found that the Centers for Medicare & Medicaid Services (CMS) and the survey and certification agencies in the five States we reviewed conducted limited oversight. OIG recommended that CMS hold State Medicaid agencies accountable for ensuring compliance with Federal requirements. OIG also recommended that CMS hold States accountable for considering community placements during the Level II PASRR process. Finally, OIG recommended that CMS revise survey and certification requirements to ensure that State surveyors sample residents with mental retardation and review the PASRR documentation for timely completion. CMS concurred with all OIG recommendations.
To access the full article, click here: http://oig.hhs.gov/oei/reports/oei-07-05-00230.pdf
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