Feeley & Driscoll's OIG Update - August 15, 2007

In this issue:

1. Review of State Children's Health Insurance Program Eligibility in Florida (A-04-06-00021)
2. Review of Billing Procedures for Medicare Claims Submitted to Palmetto GBA by Inpatient Psychiatric Facilities During 2005 (A-01-07-00507)
3. Review of Billing Procedures for Medicare Claims Submitted to Riverbend Government Benefits Administrator by Inpatient Psychiatric Facilities During 2005 (A-01-07-00505)
4. Review of Medicaid Outpatient Drug Expenditures in Iowa for the Period October 1, 2002, Through September 30, 2004 (A-07-06-04062)
5. Review of Medicaid Disproportionate Share Hospital Payments to Runnells Specialized Hospital:  November 1, 1996, Through June 30, 2001 (A-02-05-01007)
6. Louisiana Medicaid Payments and Services Related to Hurricanes Katrina and Rita:  Data Compendium  (OEI-05-07-00300)
7. Review of Medicare Payments to VNA Care Network, Inc., for Home Health Services Preceded by Hospital Discharge (A-01-06-00514)
8. Comparison of Third-Quarter 2006 Average Sales Prices to Average Manufacturer Prices:  Impact on Medicare Reimbursement for First Quarter 2007  (OEI-03-07-00140)
9. Review of Rehabilitation Services at Gulf Health Care, Texas City, Texas (A-06-03-00078)

1. Review of State Children's Health Insurance Program Eligibility in Florida (A-04-06-00021)

From January 1 through June 30, 2005, the State agency (1) made some State Children's Health Insurance Program (SCHIP) payments on behalf of beneficiaries who did not meet Federal and State eligibility requirements and (2) did not always adequately document eligibility determinations.  For the 6-month audit period, the OIG estimated that the State agency made SCHIP payments totaling between $18,776,786 and $32,583,603 (Federal share) on behalf of ineligible beneficiaries and that case file documentation did not adequately support eligibility determinations for an additional payments totaling between $4,130,356 and $11,568,962 (Federal share).

The OIG recommended that the State agency use the results of this review to help ensure compliance with Federal and State SCHIP eligibility requirements by (1) reemphasizing to Florida Healthy Kids Corporation (FHKC) employees the need to adequately verify eligibility information, (2) minimizing the time period between determination of Medicaid eligibility and disenrollment of the applicant from SCHIP, and (3) reemphasizing to FHKC employees the need to maintain appropriate documentation in all case files.  The OIG also recommended that the State agency work with CMS to resolve the estimated improper payments of at least $18,776,786 identified in the review.  Neither FHKC nor the State agency specifically addressed these recommendations. 

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region4/40600021.pdf

2. Review of Billing Procedures for Medicare Claims Submitted to Palmetto GBA by Inpatient Psychiatric Facilities During 2005 (A-01-07-00507)

The OIG’s objective was to determine whether inpatient psychiatric facilities (IPF) properly submitted Medicare claims paid by Palmetto GBA (Palmetto) for transition stays.  IPFs did not always properly bill claims paid by Palmetto for transition stays in 2005.  Specifically, for 77 of the 100 claims that the OIG sampled (from the population of 226 claims), IPFs incorrectly split the beneficiary's stay by submitting 1 claim under the Tax Equity and Fiscal Responsibility Act of 1982 payment period and a second claim under the prospective payment period, rather than properly submitting 1 claim for the entire inpatient stay.  Based on the OIG’s sample results, the OIG estimates that Palmetto overpaid IPFs a total of $706,285 for incorrectly billed Medicare claims for transition stays in 2005.

The OIG recommended that Palmetto (1) make the appropriate adjustments to the sampled claims that resulted in overpayments of $312,516, (2) review the OIG’s information on the additional 126 claims with potential overpayments estimated at $393,769 ($706,285 less $312,516) and work with the IPFs that provided the services to recover any overpayments, and (3) analyze postpayment data from IPF claims submitted after the OIG’s review to ensure that the claims were billed properly and paid correctly by Palmetto.  Palmetto agreed with The OIG’s findings and recommendations and stated that it was taking appropriate action.   

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region1/10700507.pdf

3. Review of Billing Procedures for Medicare Claims Submitted to Riverbend Government Benefits Administrator by Inpatient Psychiatric Facilities During 2005 (A-01-07-00505)

The OIG’s objective was to determine whether inpatient psychiatric facilities (IPF) properly submitted Medicare claims paid by Riverbend Government Benefits Administrator (Riverbend) for transition stays.  IPFs did not always properly submit claims paid by Riverbend for transition stays in 2005.  Specifically, for 82 of the 100 claims that the OIG sampled (from the population of 184 claims), IPFs incorrectly split the beneficiary's stay by submitting 1 claim under the Tax Equity and Fiscal Responsibility Act of 1982 payment period and 1 or more claims under the prospective payment period, rather than properly submitting 1 claim for the entire inpatient stay.  Based on the OIG’s sample results, the OIG estimates that Riverbend overpaid IPFs a total of $1,067,157 for incorrectly billed Medicare claims for transition stays in 2005. 

The OIG recommended that Riverbend (1) make the appropriate adjustments to the sampled claims that resulted in overpayments of $579,977, (2) review the OIG’s information on the additional 84 claims with potential overpayments estimated at $487,180 ($1,067,157 less $579,977) and work with the IPFs that provided the services to recover any overpayments, and (3) analyze postpayment data from IPF claims submitted after the OIG’s review to ensure that the claims were billed properly and paid correctly by Riverbend .

Riverbend agreed with the OIG’s findings and recommendations and stated that it was taking appropriate action. 

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region1/10700505.pdf

4. Review of Medicaid Outpatient Drug Expenditures in Iowa for the Period October 1, 2002, Through September 30, 2004 (A-07-06-04062)

The OIG’s objective was to determine whether the Iowa Department of Human Services's (the State agency) claims for reimbursement of Medicaid outpatient drug expenditures complied with Federal requirements.

Not all of the State agency's claims for reimbursement of Medicaid outpatient drug expenditures complied with Federal requirements.  Of the $709 million ($466 million Federal share) in Medicaid outpatient drug expenditures that the State agency claimed for fiscal years 2003 and 2004, $154,245 (Federal share) represented expenditures for drug products that were not eligible for Medicaid coverage because they were terminated drugs.  An additional $1,079,386 (Federal share) represented expenditures for drug products that were not listed on the quarterly drug tapes.

The OIG recommended that the State agency (1) refund $154,245 to the Federal Government for drug expenditures that were not eligible for Medicaid coverage; (2) work with CMS to resolve $1,079,386 in payments for drugs that were not listed on the quarterly drug tapes and that may not have been eligible for Medicaid coverage; and (3) strengthen internal controls to ensure that claimed Medicaid drug expenditures comply with Federal requirements, specifically by claiming expenditures only for drugs that are dispensed before the termination dates listed on the quarterly drug tapes and verifying whether drugs not listed on the quarterly drug tapes are covered under the Medicaid program and notify CMS when drugs are missing from the tapes.  The State agency partly agreed and partly disagreed with the OIG’s recommendations. 

5. Review of Medicaid Disproportionate Share Hospital Payments to Runnells Specialized Hospital:  November 1, 1996, Through June 30, 2001 (A-02-05-01007)

Disproportionate share hospital (DSH) payments to Runnells Specialized Hospital exceeded the hospital-specific limits imposed by section 1923(g) of the Social Security Act and the approved State Medicaid plan by $2,239,179 ($1,119,590 Federal share).  State officials relied solely on a contractor to prepare and document the additional DSH claims and failed to ensure the accuracy of the claims before submitting them for Federal reimbursement.

The OIG recommend that New Jersey (1) refund $1,119,590 to the Federal Government, (2) adhere to Federal law and State plan requirements when submitting future DSH claims subsequent to June 2001 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 generally agreed with the OIG’s recommendations.

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region2/20501007.pdf

6. Louisiana Medicaid Payments and Services Related to Hurricanes Katrina and Rita:  Data Compendium  (OEI-05-07-00300)

After the hurricanes struck, the Secretary of the Department of Health and Human Services approved 32 hurricane-related demonstration projects.  In response to the extensive, almost nationwide waiving of Medicaid requirements meant to protect the program from potential fraud and abuse, the primary memorandum report provides an initial, aggregate-level analysis of outpatient and other physician services (referred to as medical services) and prescription drugs for eight States in the first two quarters of fiscal year 2006.  The companion memorandum report provides a series of tables and figures examining Louisiana Medicaid payments and services related to Hurricanes Katrina and Rita.  Both memorandum reports examine Medicaid administrative data from the first two quarters of fiscal year 2006. 

In the primary memorandum report, the OIG found that for eight selected States, Medicaid paid $716 million for medical services and prescription drugs under the hurricane-related demonstration projects.  Nearly two-thirds—$448 million—were paid for medical services; the remainder, $268 million, was paid for prescription drugs.  In addition, a greater percentage of evacuees received medical services and prescription drugs than nonevacuees, but average payment per evacuee was less.  Eighty-five percent of evacuees received either a medical service or a prescription drug compared to 52 percent of nonevacuees.  Overall and in each State, the average total payment per evacuee was less than that per nonevacuee for medical services and prescription drugs.  However, in a few specific categories, the average payment per evacuee exceeded that per nonevacuee by 50 percent or more. 

The companion memorandum report provides, for both medical services and prescription drugs, descriptive information for total and average payment overall as well as by month, parish, eligibility category, and service type.  The OIG also provides information on the top 30 procedures and top 100 affected individuals and providers by paid amount.

The OIG makes no specific agency recommendations in either memorandum report.  However, the OIG believes that further investigation may be warranted for those categories in which the average payment per evacuee exceeded that per nonevacuee by 50 percent or more.

To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-05-07-00300.pdf

7. Review of Medicare Payments to VNA Care Network, Inc., for Home Health Services Preceded by Hospital Discharge (A-01-06-00514)

The objective of this review was to determine whether VNA Care Network, Inc., (the agency) complied with Medicare requirements in billing for fiscal years 2004 and 2005 services for beneficiaries who had been discharged from an acute-care hospital in the preceding 14 days. The agency improperly coded 161 claims as if the beneficiaries had not been discharged from an acute care hospital within the 14-day period preceding the home health admission.  The Centers for Medicare & Medicaid Services’s prepayment edit corrected 138 of the 161 claims. 

Overpayments for the 23 claims not identified by the edit totaled $6,178.  The OIG recommended that the agency:  (1) return the $6,178 overpayment to the appropriate regional home health intermediary and (2) further educate its staff regarding the importance of identifying all facilities that had discharged the beneficiary within 14 days of the home health episode and determining which of these facilities were acute care (including long-te!  rm care) hospitals.  The agency agreed with the OIG’s findings. 

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region1/10600514.pdf

8. Comparison of Third-Quarter 2006 Average Sales Prices to Average Manufacturer Prices:  Impact on Medicare Reimbursement for First Quarter 2007  (OEI-03-07-00140)

Pursuant to section 1847A(d)(3) of the Social Security Act (the Act), OIG must notify the Secretary of the Department of Health and Human Services (the Secretary) if the average sales price (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. 

This review is the third such comparison conducted by OIG, and the OIG identified 39 of 326 Healthcare Common Procedure Coding System (HCPCS) codes with ASPs that differ from AMPs by at least 5 percent in the third quarter of 2006.  Of these 39 codes, 4 have met the threshold for price adjustments in all three of OIG's studies comparing ASPs and AMPs.  An additional eight HCPCS codes were also previously eligible for price adjustments as a result of OIG's second report, which used data from the fourth quarter of 2005.  If reimbursement amounts for all 39 codes had been based on 103 percent of AMP during the first quarter of 2007, the OIG estimates that Medicare expenditures would have been reduced by $13 million.  The OIG recommended that CMS adjust Medicare reimbursement amounts for drugs that meet the 5-percent threshold specified in section 1847A(d)(3) of the Act. 

To view the full article, click here: http://www.oig.hhs.gov/oei/reports/oei-03-07-00140.pdf

9. Review of Rehabilitation Services at Gulf Health Care, Texas City, Texas (A-06-03-00078)

The objective of this review was to determine whether the services on rehabilitation claims paid to Gulf Health Care Center (Gulf) of Texas City, Texas, were medically necessary and adequately supported by medical documentation.  Of the 100 claims sampled, Gulf submitted 69 claims that did not meet Medicare requirements.  Based on the OIG’s sample results, the OIG estimates Medicare overpaid Gulf at least $671,456 for services that did not meet Medicare requirements. 

The OIG recommended that Gulf refund to the Medicare program $671,456 in overpayments for improperly paid rehabilitation claims, ensure that future rehabilitation claims comply with Medicare requirements on medical necessity, strengthen its procedures to ensure that all Medicare claims are supported by adequate medical documentation, and work with the fiscal intermediary to determine the amount of overpayments made subsequent to the OIG’s audit period.  Gulf disagreed with the OIG’s findings.

To view the full article, click here: http://www.oig.hhs.gov/oas/reports/region6/60300078.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 they 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.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.