This OIG Update is also accessible from the F&D website, by visiting www.fdcpa.com/oig.updates.htm
In this issue:
1. Medicare Drug Plans Have Not Met Requirements for Tracking Out-of-Pocket Costs: OIG Report Recommends Stronger Program Oversight
2. Tracking Beneficiaries’ True Out-of-Pocket Costs for the Part D Prescription Drug Benefit (OEI-03-06-00360)
3. Noridian's Medicare Final Administrative Cost Proposals for Fiscal Years 2004 Through 2006 (A-07-07-02717)
4. Claim Payment Adjustments Identified by Quality Improvement Organizations (A-03-06-00005)
5. Comparison of Second-Quarter 2007 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2007 (OEI-03-08-00010)
6. Medicare Hospice Care: A Comparison of Beneficiaries in Nursing Facilities and Beneficiaries in Other Settings (OEI-02-06-00220)
7. Review of Medicaid Targeted Case Management Services Provided by the Maine Bureau of Child and Family Services During Federal Fiscal Years 2002 and 2003 (A-01-05-00004)
8. Review of High-Dollar Payments for Arkansas Medicare Part B Claims Processed by Pinnacle Business Solutions, Inc. for the Period January 1, 2003, Through December 31, 2003 (A-06-07-00091)
9. Review of Missouri's Determination of Medicaid Disproportionate Share Hospital Eligibility for State-Owned Institutions for Mental Diseases (A-07-06-03086)
1. Medicare Drug Plans Have Not Met Requirements for Tracking Out-of-Pocket Costs: OIG Report Recommends Stronger Program Oversight
Inspector General Daniel R. Levinson announced today that the Office of Inspector General (OIG) for the Department of Health and Human Services found that Medicare drug plans have not met all requirements for tracking out-of-pocket spending by beneficiaries in the Medicare Part D prescription drug program. Accurate tracking of beneficiaries’ true out-of-pocket (TrOOP) costs is critical to ensuring appropriate cost sharing under the Part D program.
TrOOP costs are the prescription drug expenditures that count toward the annual out-of-pocket threshold that beneficiaries must reach before catastrophic drug coverage begins. Yet in 2006, the Part D plans did not consistently meet requirements for reporting information to the Centers for Medicare & Medicaid Services (CMS) and its contractors and CMS conducted limited oversight of the process.
“Implementing the program has been a large undertaking for CMS, its contractors, and the private Part D plans,” said Levinson. “TrOOP spending levels are critically important and now that the program has been in place for almost two years, CMS should place more emphasis on conducting Part D oversight activities.”
To view the full release, click here: http://www.oig.hhs.gov/publications/docs/press/2007/TrOOPReleaseFinalB.pdf
2. Tracking Beneficiaries’ True Out-of-Pocket Costs for the Part D Prescription Drug Benefit (OEI-03-06-00360)
Part D plans are responsible for tracking beneficiaries’ true out-of-pocket (TrOOP) costs. OIG found that information on Part D plan enrollees’ additional prescription drug coverage was not consistently submitted in 2006. In addition, Part D plans cited problems with transferring TrOOP balances when enrollees changed plans. OIG also found that CMS has conducted limited oversight of Part D plans tracking of TrOOP costs. OIG recommends that CMS ensure that all data necessary for the tracking of TrOOP costs is collected and submitted. In addition, CMS should begin or complete planned oversight activities regarding tracking TrOOP costs. CMS provided comments on the OIG’s draft report but did not indicate whether it concurred with the OIG’s recommendations. However, CMS did note that it has taken or will take steps in response to each of the OIG’s recommendations.
To view the full report, click here: http://www.oig.hhs.gov/oei/reports/oei-03-06-00360.pdf
3. Noridian's Medicare Final Administrative Cost Proposals for Fiscal Years 2004 Through 2006 (A-07-07-02717)
Noridian reported expenditures that were reasonable, allocable, and allowable in accordance with the Federal Acquisition Regulation and the Medicare contract provisions. Consequently, this report contains no recommendations.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region7/70702717.pdf
4. Claim Payment Adjustments Identified by Quality Improvement Organizations (A-03-06-00005)
Fiscal intermediaries properly processed the majority of payment adjustments for claims referred by the quality improvement organizations (QIO). Specifically, fiscal intermediaries properly adjusted 3,440 (96.4 percent) of the 3,568 claims referred based on the QIOs' case reviews and final determinations during the fiscal year (FY) 2005 Hospital Payment Monitoring Program (HPMP). The 3,440 adjusted claims had net overpayments totaling $9,247,343, or 95.5 percent of the $9,684,299 in net overpayments requiring adjustment. However, fiscal intermediaries did not properly adjust 128 claims with net overpayments totaling $415,677.
The OIG recommended that the Centers for Medicare & Medicaid Services (CMS) (1) instruct fiscal intermediaries to recover $415,677 for 128 claims with errors identified during the FY 2005 HPMP that were either not adjusted or only partially adjusted and (2) follow up with the QIOs and fiscal intermediaries when adjustments are not processed promptly. CMS agreed with the OIG’s first recommendation and disagreed with the OIG’s second recommendation.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region3/30600005.pdf
5. Comparison of Second-Quarter 2007 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2007 (OEI-03-08-00010)
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 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 fifth such comparison conducted by OIG. The OIG identified 22 of 292 drug codes with ASPs that exceeded AMPs by at least 5 percent in the second quarter of 2007. Of these 22 codes, 16 also met the threshold for price adjustments in at least one of the prior OIG studies comparing ASPs and AMPs. If reimbursement amounts for all 22 codes were based on 103 percent of AMP, the OIG estimate that Medicare expenditures would be reduced by $8 million during the fourth quarter of 2007 alone.
To view the full report, click here: http://www.oig.hhs.gov/oei/reports/oei-03-08-00010.pdf
6. Medicare Hospice Care: A Comparison of Beneficiaries in Nursing Facilities and Beneficiaries in Other Settings (OEI-02-06-00220)
The Medicare hospice benefit allows a beneficiary with a terminal illness to forgo curative treatment for the illness and instead receive palliative care, which is the relief of pain and other uncomfortable symptoms. This study is based on analysis of Medicare Part A hospice claims, the Minimum Data Set, and the Online Survey and Certification Reporting System. The OIG found that 871,437 Medicare beneficiaries received hospice care in 2005. Twenty-eight percent of them resided in nursing facilities.
Medicare payments for hospice care for beneficiaries residing in nursing facilities amounted to $2.55 billion. The OIG also found that hospice beneficiaries in nursing facilities are more than twice as likely as beneficiaries in other settings to have a terminal diagnosis of an ill-defined condition, a mental disorder, or Alzheimer's disease. Lastly, the OIG found that on average, beneficiaries in nursing facilities spend more time in hospice care and are associated with higher Medicare reimbursements for hospice care than beneficiaries in other settings. In its comments, CMS indicated that this report provides a helpful general description of the current utilization patterns.
To view the full report, click here: http://www.oig.hhs.gov/oei/reports/oei-02-06-00220.pdf
7. Review of Medicaid Targeted Case Management Services Provided by the Maine Bureau of Child and Family Services During Federal Fiscal Years 2002 and 2003 (A-01-05-00004)
The costs that the State agency claimed for Medicaid targeted case management (TCM) services provided by the Maine Bureau of Child and Family Services during fiscal years 2002 and 2003 were not always in accordance with Federal and State requirements. As a result, the State agency overstated TCM costs by a total of $44,213,815 ($29,759,384 Federal share). The OIG were unable to express an opinion on the remaining $12,387,285 ($8,327,896 Federal share) claimed.
The OIG recommended that the State agency (1) refund to the Federal Government $29,759,384 in unallowable costs claimed for TCM services; (2) work with the Centers for Medicare and Medicaid Services to determine the allowability of the $8,327,896 Federal share on which the OIG were unable to express an opinion; (3) identify and refund to the Federal Government any TCM costs that represent excessive reimbursement, direct social services, and nonreimbursable administrative costs reimbursed after the audit period; and (4) establish procedures to ensure that claims for Medicaid TCM reimbursement include only allowable and adequately documented TCM costs. The State agency disagreed with the findings and recommendations.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region1/10500004.pdf
8. Review of High-Dollar Payments for Arkansas Medicare Part B Claims Processed by Pinnacle Business Solutions, Inc. for the Period January 1, 2003, Through December 31, 2003 (A-06-07-00091)
The objective of the OIG’s review was to determine whether Pinnacle Business Solutions, Inc’s high-dollar Medicare payments to Arkansas Part B providers were appropriate. All 23 of the high-dollar payments, totaling $304,600, were appropriate. As a result, this report contains no recommendations.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region6/60700091.pdf
9. Review of Missouri's Determination of Medicaid Disproportionate Share Hospital Eligibility for State-Owned Institutions for Mental Diseases (A-07-06-03086)
The OIG’s objective was to determine whether the Missouri Department of Social Services (the State) correctly determined State-owned Institutions for Mental Diseases (IMD) to be eligible for Medicaid disproportionate share hospital (DSH) payments for Federal fiscal years (FFY) 2003-2005.
The State correctly determined seven state-owned IMDs to be DSH eligible for FFYs 2003-2005. However, the State incorrectly computed the Medicaid Inpatient Utilization Rates (MIUR) for the IMDs because it did not comply with Federal regulations concerning the exclusion of inpatient days related to unallowable age groups and incarcerated individuals. In addition, the State included unallowable inpatient days related to accounting errors for the FFY 2003-2005 DSH eligibility determination. The State also lacked adequate controls concerning the acquisition, review and maintenance of contemporaneous documentation to support the MIUR calculations. As a result, the State could not adequately support its MIUR calculations for State-owned IMDs. These errors did not cause the MIUR to fall below the 1-percent threshold at any of these State-owned IMDs. However, the OIG is concerned that the State may in the future overstate the MIURs and, consequently, incorrectly classify one or more IMDs as DSH eligible.
The OIG recommend that the State (1) comply with Federal regulations concerning the exclusion of unallowable inpatient days from the MIUR calculations; and (2) strengthen controls to eliminate accounting errors and to acquire, review, and maintain contemporaneous documentation to support the original Medicaid DSH MIUR calculations. The State neither agreed nor disagreed with the OIG’s first recommendation and agreed with the OIG’s second recommendation.
To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region7/70603086.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.
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