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 Vendor Rebates Paid to Hospitals - Grandview Hospital, Dayton, Ohio (A-05-07-00053)
2. Review of Vendor Rebates Paid to Hospitals - Southside Hospital, Bay Shore, New York (A-05-07-00052)
3. Review of Vendor Rebates Paid to Hospitals - Methodist Germantown Hospital, Germantown, Tennessee (A-05-07-00047)
4. Review of Vendor Rebates Paid to Hospitals - CGH Medical Center, Sterling, Illinois (A-05-07-00044)
5. Audit of Blue Cross Blue Shield of Montana's Unfunded Pension Costs 1987 to 2004 (A-07-07-00228)
6. Review of Medicare Contractor's Pension Segmentation Requirements at Blue Cross Blue Shield of Montana for January 1, 1987 to January 1, 2004 (A-07-07-00226)
7. Review of Montgomery County's Medicaid Administrative Health Services Costs Claimed by Maryland Between October 2003 and September 2004 (A-03-05-00208)
8. Review of Allegheny County's Medicaid Administrative Case Management Costs Claimed by Pennsylvania Between January 2002 and June 2003 (A-03-05-00201)
9. Review of Excessive Payments for Outpatient Services Processed by Chisholm Administrative Services (A-06-07-00054)
10. States’ Use of New Drug Pricing Data in the Medicaid Program (OEI-03-06-00490)
11. Performance Data for the Senior Medicare Patrol Projects: April 2007 Performance Report (OEI-02-07-00360)
12. Review of Aid to Families With Dependent Children Overpayments in Massachusetts for the Period April 1, 2001, Through March 31, 2005 (A-01-06-02508)
1. Review of Vendor Rebates Paid to Hospitals - Grandview Hospital, Dayton, Ohio (A-05-07-00053)
The objective of OIG’s review was to determine whether Grandview Hospital (the provider) reduced costs reported on its fiscal year 2003 Medicare cost report by the $15,468 it received for two vendor rebates. Of the $15,468 in rebates, the provider did not reduce costs reported on its fiscal year 2003 cost report by $5,732 for one of the two rebates, contrary to Federal regulations and Centers for Medicare and Medicaid Services guidance.
OIG recommended that the provider (1) revise and resubmit its 2003 Medicare cost report, if not already settled, to properly reflect the $5,732 rebate as a credit reducing its health care costs; and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited on its Medicare cost reports. The provider agreed with OIG’s recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region5/50700053.pdf
2. Review of Vendor Rebates Paid to Hospitals - Southside Hospital, Bay Shore, New York (A-05-07-00052)
The objective of OIG’s review was to determine whether Southside Hospital (the provider) reduced costs reported on its fiscal year 2003 Medicare cost report by the $15,074 it received for two vendor rebates. Of the $15,074 in rebates, the provider reduced costs by $9,690 on its fiscal year 2003 Medicare cost report but did not report $5,384, contrary to Federal regulations and Centers for Medicare and Medicaid Services guidance.
OIG recommended that the provider (1) revise and resubmit its 2003 Medicare cost report, if not already settled, to properly reflect the $5,384 rebate as a credit reducing its health care costs; and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited on its Medicare cost reports. The provider agreed with OIG’s recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region5/50700052.pdf
3. Review of Vendor Rebates Paid to Hospitals - Methodist Germantown Hospital, Germantown, Tennessee (A-05-07-00047)
The objective of OIG’s review was to determine whether Methodist Germantown Hospital (the provider) reduced costs reported on its fiscal year 2003 and 2004 Medicare cost reports by the $12,621 it received for two vendor rebates. The provider did not reduce costs reported on its fiscal year 2003 and 2004 cost reports by the $12,621 it received for two rebates, contrary to Federal regulations and Centers for Medicare and Medicaid Services guidance.
OIG recommended that the provider (1) revise and resubmit its 2003 and 2004 Medicare cost reports, if not already settled, to properly reflect the $12,621 in rebates as credits reducing its health care costs; and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited on its Medicare cost reports. The provider agreed with OIG’s recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region5/50700047.pdf
4. Review of Vendor Rebates Paid to Hospitals - CGH Medical Center, Sterling, Illinois (A-05-07-00044)
The objective of OIG’s review was to determine whether CGH Medical Center (the provider) reduced costs reported on its fiscal year 2003 Medicare cost report by the $5,965 vendor rebate it received. The provider did not reduce costs reported on its 2003 cost report by the $5,965 rebate, contrary to Federal regulations and Centers for Medicare and Medicaid Services guidance.
OIG recommended that the provider (1) revise and resubmit its 2003 Medicare cost report, if not already settled, to properly reflect the $5,965 rebate as a credit reducing its health care costs; and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited on its Medicare cost reports. The provider agreed with OIG’s recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region5/50700044.pdf
5. Audit of Blue Cross Blue Shield of Montana's Unfunded Pension Costs 1987 to 2004 (A-07-07-00228)
The objectives of OIG’s review were to: (1) determine whether pension costs for plan years 1987 to 2004 were funded in accordance with the Federal Acquisition Regulation and Cost Accounting Standards, and (2) identify and properly account for any unallowable unfunded pension costs. Montana did not correctly identify the accumulated unallowable unfunded pension costs. As of January 1, 2004, Montana determined its accumulated unallowable unfunded pension costs to be $0; however, OIG identified accumulated unallowable unfunded pension costs of $56,099 ($7,324 for the Medicare segment plus $48,775 for the Other segment).
As a result, Montana understated the accumulated unallowable unfunded pension costs by $56,099.
OIG recommended that Montana: (1) identify $56,099 of accumulated unallowable unfunded pension costs ($7,324 as an unallowable component of Medicare segment pension costs and $48,775 as an unallowable component of the Other segment pension costs) as of January 1, 2004; and (2) properly identify, and update with interest, unallowable unfunded pension costs in subsequent years. Montana concurred with OIG’s recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region7/70700228.pdf
6. Review of Medicare Contractor's Pension Segmentation Requirements at Blue Cross Blue Shield of Montana for January 1, 1987 to January 1, 2004 (A-07-07-00226)
The objective of OIG’s review was to determine whether Montana 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. Montana did not comply with the Medicare contract's pension segmentation requirements when identifying the Medicare segment's initial asset allocation and while updating Medicare segment assets from January 1, 1987, to January 1, 2004. As a result, Montana overstated the January 1, 2004, Medicare segment pension assets by $1,016,181. The overstatement occurred primarily because Montana omitted benefit payments in its rollup of segment assets.
OIG recommended that Montana: (1) decrease Medicare segment pension assets by $1,016,181 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. Montana partially concurred with OIG’s first recommendation.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region7/70700226.pdf
7. Review of Montgomery County's Medicaid Administrative Health Services Costs Claimed by Maryland Between October 2003 and September 2004 (A-03-05-00208)
OIG’s objective was to determine whether Maryland claimed Montgomery County’s Medicaid administrative health services costs through its cost allocation plan in accordance with Federal guidance. Maryland’s claim of Montgomery County’s administrative health service costs conformed to the parameters of the approved cost allocation plan. However, OIG believes a significant control weakness exists in the current methodology since there is no way to validate that County staff performed the purported Medicaid-related activity generating the claim for Federal matching funds. The county also received an additional $225,023 in Federal matching funds for claiming the enhanced 75-percent rate for administrative services performed by skilled professional medical personnel (SPMP). OIG does not believe the performance of these activities required the professional education and training necessary for claiming the enhanced SPMP rate.
OIG recommended that CMS determine (1) whether the county's current allocation methodology contains the necessary controls that can assure Medicaid-related activities were performed and (2) whether the county should discontinue claiming enhanced Federal funding for administrative activities performed by SPMPs. Maryland generally disagreed.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region3/30500208.pdf
8. Review of Allegheny County's Medicaid Administrative Case Management Costs Claimed by Pennsylvania Between January 2002 and June 2003 (A-03-05-00201)
The Centers for Medicare & Medicaid Services (CMS) requested that OIG determine whether administrative case management costs claimed on behalf of Allegheny County were comparable to those costs claimed on behalf of Philadelphia County. Pennsylvania stated that administrative case management is one of three components of case management and needs to be viewed in total with intensive case management and resource coordination. For OIG’s review period, these three case management costs in Allegheny County totaled $399 per client, which was comparable to Philadelphia County totals of $461 per client.
OIG also found, contrary to Federal regulations (45 CFR § 95.509), that Pennsylvania did not properly amend its cost allocation plan prior to submitting its initial claim for Federal reimbursement of administrative case management costs. OIG recommended that CMS: (1) direct Pennsylvania to amend its cost allocation plan in order to claim administrative case management costs and (2) reconsider its acceptance of Pennsylvania’s claim for Federal matching funds for administrative case management services provided from January 2002 until a cost allocation plan amendment is submitted.
Pennsylvania concurred that Allegheny County’s costs per client for the three levels of case management compared to Philadelphia. Pennsylvania did not concur that it needed to amend its cost allocation plan and did not agree that CMS should reconsider its acceptance of claims for administrative case management costs.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region3/30500201.pdf
9. Review of Excessive Payments for Outpatient Services Processed by Chisholm Administrative Services (A-06-07-00054)
The objective of OIG’s review was to determine whether high-dollar Medicare payments that Chisholm Administrative Services (Chisholm) made to providers for outpatient services were appropriate. All of the high-dollar Medicare outpatient payments were not appropriate. For calendar year 2003 and 2004 claims, Chisholm made 14 payments of $50,000 or more each for outpatient services. OIG’s analysis indicated that, at the start of their fieldwork in February 2007, eight of the payments were incorrect, and the providers had refunded the $497,497 in overpayments, but six additional payments were incorrect and the provider had not refunded the $514,323 in overpayments. All overpayments that occurred during OIG’s review were due to incorrect, billing units. OIG recommended that Chisholm inform OIG of the status of the recovery of the $514,323 in overpayments that OIG’s audit identified and use the results of this audit in its provider education activities. Chisholm agreed with OIG’s findings and recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region6/60700054.pdf
10. States’ Use of New Drug Pricing Data in the Medicaid Program (OEI-03-06-00490)
This report details OIG’s early assessment of whether States are considering using new pricing data for Medicaid prescription drug reimbursement. The Deficit Reduction Act of 2005 (DRA) requires CMS to provide States with average manufacturer prices (AMP) and retail sales prices (RSP), although States are not required to use these data. OIG found that many States have not decided yet whether to use AMP and/or RSP data. States are anticipating CMS’s final regulations to clearly explain how the AMP will be defined and calculated. States raised concerns about the AMP data files that they received from CMS, indicating that the AMP units appeared to be inconsistent with typical unit definitions of drug products and requesting that the drug unit definition be included in the data files. States also questioned whether the vendors that already provide them with drug pricing information for claims processing would have access to AMP data.
Based on the findings of this report and a related May 2006 report, OIG continues to recommend that CMS explicitly detail AMP’s definition and calculation, including the definition of retail pharmacy class of trade, when promulgating new AMP regulations. OIG also recommends that CMS provide unit definitions in AMP data files and furnish States with interim guidance and/or information regarding AMP data before the final regulations are published. In addition, OIG recommends that CMS explicitly detail RSP’s definition, calculation, and method of collection when distributing RSP data to States.
CMS generally agreed with OIG’s recommendations and has taken several steps toward addressing them.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-03-06-00490.pdf
11. Performance Data for the Senior Medicare Patrol Projects: April 2007 Performance Report (OEI-02-07-00360)
The objective of this memorandum was to collect and report on performance data and verify documentation of overpayments recovered as a result of the efforts of the Senior Medicare Patrol Projects. The Senior Medicare Patrol Projects receive grants from AoA to recruit retired professionals to serve as educators and resources in assisting beneficiaries to detect and report fraud, waste, and abuse in the Medicare program. In 2006, a total of 65 projects educated 411,458 beneficiaries in 210,780 group training sessions and one-on-one sessions.
As a result of educating beneficiaries, the projects received 11,830 complaints, of which 4,123 were referred to Medicare contractors for follow-up. A total of 2,501 complaints resulted in $110,592 recouped to the Medicare program. The projects also reported $589,288 in savings to beneficiaries. For many of these cases, the projects provided descriptions or documentation indicating that beneficiaries were charged inaccurate copayments, deductibles, or premiums for prescription drugs covered under the Medicare Part D benefit.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-02-07-00360.pdf
12. Review of Aid to Families With Dependent Children Overpayments in Massachusetts for the Period April 1, 2001, Through March 31, 2005 (A-01-06-02508)
OIG’s objective was to determine whether Massachusetts had reimbursed the Administration for Children and Families (ACF) for the Federal share of overpayments collected from former Aid to Families with Dependent Children (AFDC) recipients, in accordance with Federal requirements. Massachusetts did not reimburse the full Federal share of AFDC overpayments that it collected from former AFDC recipients from April 1, 2001, through March 31, 2005, as Federal regulations require. Massachusetts refunded $6,281,372 to ACF for the Federal share of AFDC collections.
However, it should have refunded $6,331,084. It incorrectly credited $99,424 in AFDC overpayment recoveries to another program. As a result, Massachusetts owes the Federal Government $49,712 for the Federal share of these overpayments. Massachusetts agreed with OIG’s finding and recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region1/10602508.pdf
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