A biweekly publication from the Healthcare Group at Feeley & Driscoll, P.C.
Please visit us at OIG’s 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 Minnesota Medicaid Reimbursement for Targeted Case Management Services for Fiscal Years 2003 and 2004 (A-05-05-00059)
2. Review of Supplemental Executive Retirement Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 1999–2004 (A-07-07-00234)
3. Medicare Part D Sponsors: Estimated Reconciliation Amounts for 2006 (OEI-02-07-00460)
4. Growth in Advanced Imaging Paid Under the Medicare Physician Fee Schedule (OEI-01-06-00260)
5. Review of Generic Drug Price Increases (A-06-07-00042
1. Review of Minnesota Medicaid Reimbursement for Targeted Case Management Services for Fiscal Years 2003 and 2004 (A-05-05-00059)
This audit was part of a nationwide review of targeted case management (TCM) Medicaid program payments. The OIG’s objective was to determine whether the State agency’s claim for Medicaid reimbursement of TCM services provided during fiscal years (FY) 2003 and 2004 complied with Federal and State requirements.
Based on the OIG’s review of 118 claims in 100 sampled beneficiary-months, 7 claims included in 7 beneficiary-months were unallowable because the services were insufficiently documented or unsupported by the case records. As a result, the OIG estimates that during FYs 2003 and 2004, the State agency claimed $7,311,860 ($3,759,338 Federal share) in TCM costs that were unallowable. The OIG considered the remaining 111 claims included in 93 beneficiary-months to be acceptable.
The OIG recommend that the State agency (1) refund to the Federal Government the $3,759,338 for undocumented and unsupported TCM services and (2) ensure that TCM services claimed under the Medicaid program are properly documented and meet Federal and State requirements. In written comments on the OIG’s draft report, the State agency did not address the OIG’s recommendations.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region5/50500059.pdf
2. Review of Supplemental Executive Retirement Plan Costs Claimed by Blue Cross Blue Shield of South Carolina for Medicare Reimbursement for Fiscal Years 1999–2004 (A-07-07-00234)
The OIG’s objective was to determine the allowability of the Supplemental Executive Retirement Plan (SERP) costs that Blue Cross Blue Shield of South Carolina (South Carolina) claimed for Medicare reimbursement for fiscal years (FY) 1999–2004.
South Carolina’s claim for $5,920,947 in SERP costs for FYs 1999–2004 included some costs that were unreasonable and therefore unallowable for Medicare reimbursement. However, the OIG was unable to determine the impact of these unallowable compensation costs on SERP costs because South Carolina did not provide the OIG with the necessary documentation to support its SERP calculations. Therefore, the OIG is setting aside the $5,920,947 in claimed SERP costs for adjudication by the Centers for Medicare & Medicaid Services (CMS).
The OIG recommended that South Carolina work with CMS to determine the allowability of $5,920,947 in SERP costs claimed for FYs 1999–2004. South Carolina concurred with the OIG’s recommendation.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region7/70700234.pdf
3. Medicare Part D Sponsors: Estimated Reconciliation Amounts for 2006 (OEI-02-07-00460)
This report is based primarily on preliminary estimates from CMS. According to these estimates, Part D sponsors owe Medicare a net total of $4.4 billion for 2006. Eighty percent of sponsors owe money to Medicare, whereas 20 percent of sponsors will receive money from Medicare. The majority of the funds sponsors owe are profits that they must repay to Medicare as a result of risk-sharing requirements.
Additionally, CMS has no mechanisms in place to collect funds owed by sponsors until it has completed reconciliation, which is scheduled to occur more than 9 months after the 2006 plan year has ended. CMS also has no mechanism in place to adjust prospective payments prior to reconciliation. As a result, sponsors have had the use of these funds for a significant length of time.
Based on these findings, the OIG recommends that CMS (1) ensure that sponsors’ bids accurately reflect the cost of providing the benefit to Medicare beneficiaries; (2) for 2007, consider implementing an interim reconciliation process to reduce the amounts owed to Medicare; (3) for 2008 and subsequent years, better align monthly prospective payments with sponsors’ actual costs; and (4) consider seeking legislative changes to delay the adjustments to the risk corridors as specified by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
In its comments to the draft report, CMS concurred with the recommendation that the data collected from 2006 and subsequent plan years be used in the review of future bid submissions. CMS also stated that it has the authority to change payment methodologies for the low-income cost-sharing and reinsurance subsidies and that it is carefully examining possible options. CMS did not concur with the OIG’s recommendations to implement an interim reconciliation process for 2007 or to seek legislation to delay changes to the risk corridors.
To view the full report, click here: http://www.oig.hhs.gov/oei/reports/oei-02-07-00460.pdf
4. Growth in Advanced Imaging Paid Under the Medicare Physician Fee Schedule (OEI-01-06-00260)
This report documents the nature and extent of growth in advanced imaging—computed tomography, magnetic resonance, and positron emission tomography—between 1995 and 2005. Advanced imaging used to be the exclusive domain of hospitals; however, in the last 10 to 15 years, use of these services under the Medicare program has proliferated in ambulatory settings. Oversight of these settings includes accreditation and certification for hospital outpatient departments, and State licensure for independent diagnostic testing facilities (IDTFs) and doctors’ offices. In December 2006, CMS issued final regulations with new performance standards for IDTFs. It later issued and then rescinded technical direction to the Medicare carriers regarding oversight of those standards.
By all measures, advanced imaging paid under the Medicare Physician Fee Schedule (MPFS) grew significantly between 1995 and 2005: (1) Services per year grew more than fourfold, from 1.4 million to 6.2 million; (2) allowed charges grew by more than 5 times, to $3.5 billion in 2005; and (3) the utilization rate grew from 42 services per 1,000 beneficiaries in 1995 to 163 per 1,000 in 2005. In 2005, significant variation remained in utilization rates across States, from 8 services per 1,000 beneficiaries in Vermont to 326 per 1,000 in Florida. In every year from 1995 to 2005, a small number of procedure codes consistently accounted for over half of all advanced imaging billed under the MPFS.
The OIG also found that the share of all advanced imaging services provided by IDTFs grew from 2.5 percent in 1995 to 23 percent in 2005. In the OIG’s draft report, the OIG recommended that CMS monitor the growth of advanced imaging performed in ambulatory settings. The OIG stated that CMS should reissue technical direction to Medicare carriers regarding oversight of the new IDTF performance standards as part of such monitoring. CMS concurred with the OIG’s recommendation. CMS commented that it issued technical direction to the Medicare carriers regarding the new IDTF performance standards on July 13, 2007. It also outlined other steps it is taking to improve oversight of IDTFs. The OIG continue to recommend that CMS monitor the growth of advanced imaging performed in ambulatory settings.
To view the full report, click here: http://www.oig.hhs.gov/oei/reports/oei-01-06-00260.pdf
5. Review of Generic Drug Price Increases (A-06-07-00042)
Generic drug price increases exceeded the specified statutory inflation factor applicable to brand-name drugs for 35 percent of the quarterly average manufacturer prices reviewed. If the provision for brand-name drugs were extended to generic drugs, the Medicaid program would receive additional rebates. By applying the method in the Social Security Act for calculating additional rebates on brand-name drugs to generic drugs, the OIG calculated that the Medicaid program would have received a total of $966 million in additional rebates for the top 200 generic drugs, ranked by Medicaid reimbursement, from 1991 through 2004.
The OIG recommended that the Centers for Medicare & Medicaid Services (CMS) consider seeking legislative authority to extend the additional rebate provisions to generic drugs. CMS agreed to consider the recommendation when it considers future legislative proposals.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region6/60700042.pdf
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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. |
