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. Deficit Reduction Act of 2005: Impact on the Medicaid Federal Upper Limit Program (OEI-03-06-00400)
2. Review of State Claims for the Costs of Family Planning Services Provided Through Medicaid Managed Care Programs (A-03-06-00200)
3. Review of Rehabilitation Services at Skilled Nursing Facilities - Avante at Leesburg (A-06-06-00107)
4. Compliance with New York State Medicaid Inpatient Prospective Payment System Transfer Regulations (A-02-02-01004)
5. Quality Concerns Identified Through Quality Improvement Organization Medical Record Reviews (OEI-01-06-00170)
6. Medicare Payments for Surgical Debridement Services in 2004 (OEI-02-05-00390)
7. Examining Fluctuations in Average Manufacturer Prices (OEI-03-06-00350, 05/07)
1. Deficit Reduction Act of 2005: Impact on the Medicaid Federal Upper Limit Program (OEI-03-06-00400)
Consistent with earlier work, the OIG found that Federal upper limit amounts set under the previous calculation method were more than double pharmacy acquisition costs for 23 of 25 selected high-expenditure Medicaid drugs in the second quarter of 2006. Under the new calculation method established by the Deficit Reduction Act of 2005 (DRA), Federal upper limit amounts are likely to decrease substantially. However, OIG determined that, on average, pharmacies would only have been able to purchase 6 of the 25 selected high-expenditure drugs for less than the new Federal upper limit amount in the second quarter of 2006. Furthermore, we found that the average manufacturer price (AMP) used to set a new Federal upper limit amount may be substantially lower than other AMPs associated with a drug.
OIG recommended that the Centers for Medicare & Medicaid Services (CMS) take steps to identify when a new Federal upper limit amount may not be representative of a drug’s acquisition cost to pharmacies and, in those situations, determine the proper course of action (working with Congress, if necessary). In its comments to the draft report, CMS strongly disagreed with OIG’s findings concerning the effect of the DRA-related changes to the Federal upper limit calculation. CMS also suggested that OIG should have waited until the final AMP regulation is promulgated before completing this study and requested that we revise our analysis.
OIG will continue to work collaboratively with CMS in an effort to address any potential issues with the new calculation method for Federal upper limits. However, issuing this report prior to CMS’s publication of its final regulation provides the agency with the opportunity to consider OIG’s findings and incorporate our recommendations. The data presented in this report are the best available for the timeframe, and any limitations have marginal impact and do not change the overall findings and conclusions.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-03-06-00400.pdf
2. Review of State Claims for the Costs of Family Planning Services Provided Through Medicaid Managed Care Programs (A-03-06-00200)
OIG’s objectives were to (1) consolidate the results of our audits of seven States’ methodologies for claiming the costs of family planning services provided through Medicaid managed care programs and (2) assess the adequacy of CMS’s guidance and practices relative to determining such costs.
Six of the seven States OIG reviewed inflated the factors or rates used to claim reimbursement for family planning costs at the enhanced 90-percent rate or did not provide documentation to support their calculations as required. As a result, for $302,902,257 in claims reviewed (Federal share), these States claimed unallowable costs totaling $21,749,383 (Federal share). OIG recommended that CMS: (1) issue specific guidance to State agencies, consistent with current Medicaid regulations, to quantify a reasonable portion of the capitation payments attributable to family planning services; (2) establish controls in its review process to ensure that the data States use to quantify family planning costs conform to the proposed methodologies for claiming the enhanced family planning rate; and (3) specify retention requirements for base-year data. CMS agreed with OIG’s first and third recommendations. OIG clarified their second recommendation to express their original intent more clearly.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region3/30600200.pdf
3. Review of Rehabilitation Services at Skilled Nursing Facilities - Avante at Leesburg (A-06-06-00107)
The objective of this review was to determine whether the services on rehabilitation claims paid to Avante At Leesburg (Avante) of Leesburg, Florida, were medically necessary, properly billed, and adequately supported by medical documentation. A complete medical review of the 100 claims sampled showed that 20 included medically unnecessary or improperly billed skilled services. As a result, OIG estimated that Medicare overpaid Avante at least $708,086 for services that did not meet Medicare requirements.
OIG recommended that Avante (1) refund to the Medicare program $708,086 in overpayments, (2) ensure that future claims with skilled services comply with Medicare requirements on medical necessity, (3) establish adequate controls to ensure that the correct claims are adjusted, and (4) work with its fiscal intermediary to determine the amount of overpayments made subsequent to OIG’s audit period and refund the overpayments to the Medicare program. Avante disagreed with the medical reviewers’ determination that 30 Resource Utlization Groups be denied or downcoded. However, OIG relied on the knowledge and expertise of the medical reviewers; therefore, they stand by the findings and recommendations.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region6/60600107.pdf
4. Compliance with New York State Medicaid Inpatient Prospective Payment System Transfer Regulations (A-02-02-01004)
The objectives of OIG’s audit were to determine whether (1) Prospective Payment System (PPS) hospitals were paid in accordance with New York State (NYS) Medicaid policy when beneficiaries were transferred to other PPS hospitals, and (2) Medicaid overpayments resulted from the incorrect coding of the patient (discharge) status on claims for the transferred beneficiaries. For the most part, PPS hospitals in NYS were paid in accordance with Medicaid policy when beneficiaries were transferred to other PPS hospitals. However, OIG noted a relatively small number of exceptions that resulted from the incorrect coding of the patient (discharge) status on claims for the transferred beneficiaries. The NYS Department of Health (DOH) overpaid a total of $986,316 ($493,158 Federal share) for 74 of the 185 claims reviewed.
OIG recommended that NYS DOH (1) refund $493,158 to the Federal Government for its share of the identified overpayments, (2) research the economic feasibility of analyzing the remaining claims in OIG’s universe to determine if they resulted in overpayments to PPS hospitals, and (3) instruct hospitals to review all internal procedures and processes related to claims submission to assure that PPS transfers are properly reported.
To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region2/20201004.pdf
5. Quality Concerns Identified Through Quality Improvement Organization Medical Record Reviews (OEI-01-06-00170)
This evaluation examines the Quality Improvement Organizations' (QIO) role in protecting beneficiaries from poor quality of care. The report determines the extent to which QIOs identify quality-of-care concerns through medical record reviews and what interventions QIOs take in response to confirmed concerns. CMS contracts with QIOs to oversee and enhance the quality of care within Medicare and to protect over 40 million Medicare beneficiaries. QIOs have a statutory and contractual obligation to review medical records to ensure that care meets professional standards.
OIG found that QIOs selected 318,018 cases for payment, utilization, noncoverage, and quality-of-care reviews between February 1, 2003, and January 31, 2006. QIOs completed full quality-of-care reviews on 34,768 of these cases, and confirmed one or more quality concerns in 6,439 (19 percent) of them. QIOs assigned the two lowest classifications to more than 80 percent of the cases with a confirmed quality concern. QIOs recommended one or more corrective actions in 4,645 cases (72 percent) with a confirmed concern. QIOs imposed no corrective actions in 1,794 cases (28 percent) with a confirmed quality concern; in 70 percent of the cases with corrective actions, QIOs recommended the least severe corrective action available. This raises questions about the effectiveness of the QIO case reviews.
OIG concludes that it is essential that QIOs meet their statutory and contractual responsibility to review care provided to Medicare beneficiaries. For this reason, the case review function warrants continued attention.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-01-06-00170.pdf
6. Medicare Payments for Surgical Debridement Services in 2004 (OEI-02-05-00390)
Surgical debridement is the removal of dead or unhealthy tissue from a wound using a sharp instrument. This report is based on a review of medical records for 368 surgical debridement services. OIG found that 64 percent of surgical debridement services in 2004 did not meet Medicare program requirements, resulting in approximately $64 million in improper payments. Specifically, reviewers determined that 39 percent of surgical debridement services were miscoded, 29 percent were insufficiently documented, and 1 percent was not medically necessary. In addition, most carriers had local coverage determinations and edits in place, but conducted limited medical review of surgical debridement services.
OIG recommends that CMS strengthen program safeguards to prevent improper payments for surgical debridement services by developing more uniform policy guidance, instructing carriers to conduct additional medical reviews and education, and working with one carrier to ensure its policy is consistent with current Medicare coding guidelines. CMS generally concurs with OIG’s recommendations for more review and guidance with a focus on coding, billing, and education.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-02-05-00390.pdf
7. Examining Fluctuations in Average Manufacturer Prices (OEI-03-06-00350, 05/07)
OIG found that, overall, 39 percent of average manufacturer prices (AMP) stayed the same between quarters, and an additional 16 percent changed by less than 2 percent. Only 24 percent of AMPs fluctuated by more than 10 percent from quarter to quarter. Of this number, half increased and half decreased. In addition, AMPs for single-source drugs changed more frequently than those for other drug types, but most changes were relatively small. Finally, AMPs for high-expenditure drugs changed more frequently than those for other drugs, with high-expenditure single-source drugs being especially prone to price increases. In commenting on the draft report, CMS stated that OIG’s findings may not be comparable to actual experience once a new definition of AMP is implemented. However, CMS does believe this report shows AMP’s can be used appropriately to set Medicaid payment to pharmacies.
To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-03-06-00350.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. |
