The Department of Health and Human Services Office of the Inspector General (HHS-OIG) was established by Congress in 1976 to identify and eliminate fraud, abuse, and waste in HHS programs and to promote efficiency and economy in departmental operations. The OIG is responsible for conducting audits, evaluations, and both criminal and civil investigations for all HHS agencies. These functions are performed by the OIG's Office of Audit Services (OAS).
Feeley & Driscoll's OIG Update is a compilation of the latest and greatest additions from the OIG's website, listed in approximate order of greatness rather than lateness.

A biweekly publication from the Healthcare Group at Feeley & Driscoll, P.C. This email is also accessible from the F&D website by clicking through to our OIG Updates Archive.

In this issue

1. National Institutes of Health: Conflicts of Interest in Extramural Research (OEI-03-06-00460)
2. Follow-up Audit of the Medicaid Drug Rebate Program in the District of Columbia (A-03-07-00216)
3. Review of High-Dollar Payments for Medicare Part B Claims Processed by Group Health Incorporated for the Period January 1, 2003, Through December 31, 2005 (A-02-07-01045)
4. Review of Medicaid Outpatient Drug Expenditures in Montana for the Period October 1, 2001, Through September 30, 2004 (A-07-07-04103)
5. Review of Section 1915(c) Mental Retardation or Related Condition Waiver Services at Dungarvin Minnesota From July 1, 2004, Through June 30, 2005 (A-05-07-00023)
6. Review of Severance and Termination Costs Claimed by CareFirst Blue Cross/Blue Shield of Maryland for the Period October 2005 Through December 2006 (A-03-07-00022)

1. National Institutes of Health: Conflicts of Interest in Extramural Research (OEI-03-06-00460)

NIH provided the OIG with 438 financial conflict-of-interest reports for fiscal years 2004 through 2006. However, this number does not represent the total number of conflicts of interest reported by grantee institutions because NIH’s Institutes and the Office of Extramural Research (OER) were unable to provide the OIG with all of the actual conflict-of-interest reports they received from grantee institutions. Although Federal regulations require grantee institutions to report financial conflicts of interest, the regulations do not require them to report the nature of the conflicts or other details. At least 89 percent of financial conflict-of-interest reports the OIG reviewed did not state the nature of the conflicts or how they would be managed. Based on the OIG’s review of the documentation, the OIG found very few cases in which Institutes followed up with grantee institutions regarding the nature of a financial conflict of interest and/or the management plan for a conflict. The OIG also found that many Institutes rely on the good faith of the grantee institution to ensure compliance with Federal financial conflict-of-interest regulations, rather than directly overseeing or reviewing grantee institutions’ management of financial conflicts of interest.

The OIG recommend that NIH (1) increase oversight of grantee institutions to ensure their compliance with Federal financial conflicts-of-interest regulations; (2) require grantee institutions to provide details regarding the nature of financial conflicts of interest and how they are managed, reduced, or eliminated; and (3) require Institutes to forward to OER all financial conflict-of-interest reports that they receive from grantee institutions and ensure that OER’s conflict-of-interest database contains information on all conflict-of-interest reports provided by grantee institutions. NIH concurred with two of the OIG’s recommendations but did not concur with the OIG’s recommendation to require grantee institutions to provide details about financial conflicts of interest.

> Click here to view the full report: http://www.oig.hhs.gov/oei/reports/oei-03-06-00460.pdf

2. Follow-up Audit of the Medicaid Drug Rebate Program in the District of Columbia (A-03-07-00216)

The OIG’s objectives were to determine whether the State agency had (1) implemented the recommendations made in the OIG’s previous audit of the District’s drug rebate program and (2) established controls over collecting rebates on single source drugs administered by physicians. The State agency implemented the recommendations from the OIG’s prior audit. However, the State agency did not collect rebates on single source drugs administered by physicians or establish controls over and accountability for their collection.

The OIG recommended that the State agency (1) implement policies and procedures to collect and submit utilization for single source drugs administered by physicians so that the District may obtain rebates for the drugs and (2) collect rebates for single source drugs, retroactive to January 1, 2006, when it implements its single source drug rebate program. The State agency concurred with the OIG’s findings and stated that it plans to adhere to the OIG’s recommendations.

> Click here to view the full report: http://www.oig.hhs.gov/oas/reports/region3/30700216.pdf

3. Review of High-Dollar Payments for Medicare Part B Claims Processed by Group Health Incorporated for the Period January 1, 2003, Through December 31, 2005 (A-02-07-01045)

The OIG’s objective was to determine whether Group Health Incorporated’s (GHI) high-dollar Medicare payments to Part B providers were appropriate. During calendar years 2003–2005, GHI processed 14 Part B payments of $10,000 or more. Eleven of the fourteen high-dollar payments that GHI made to providers were appropriate. However, Group Health Incorporated overpaid providers $84,092 for the remaining three payments. Providers refunded two of the overpayments, totaling $69,394, prior to the OIG’s fieldwork, and one overpayment of $14,698 remained outstanding.

The OIG recommended that GHI (1) recover the $14,698 overpayment and (2) consider identifying and recovering any additional overpayments made for high-dollar Part B claims paid after calendar year 2005. GHI agreed with the OIG’s recommendations.

> Click here to view the full report: http://www.oig.hhs.gov/oas/reports/region2/20701045.pdf

4. Review of Medicaid Outpatient Drug Expenditures in Montana for the Period October 1, 2001, Through September 30, 2004 (A-07-07-04103)

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

The State agency's claims for reimbursement of Medicaid outpatient drug expenditures for fiscal years 2002 through 2004 did not fully comply with Federal requirements. Of the $266 million ($198 million Federal share) claimed, $992,440 (Federal share) represents expenditures for drug products that were not eligible for Medicaid coverage because they were either (1) terminated drugs for which the termination dates were listed on the CMS quarterly drug tape before the drugs were dispensed or (2) inadequately supported compound drug expenditures. An additional $363,210 (Federal share) represents expenditures for drug products that were not listed on the quarterly drug tapes. Because the State agency did not verify whether these drugs were eligible for Medicaid coverage, these drug expenditures may not be allowable for Medicaid reimbursement.

The OIG recommended that the State agency (1) refund $992,440 to the Federal Government for drug expenditures that were not eligible for Medicaid coverage, (2) work with CMS to resolve $363,210 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. The State agency concurred with all of the recommendations.

> Click here to view the full report: http://www.oig.hhs.gov/oas/reports/region7/70704103.pdf

5. Review of Section 1915(c) Mental Retardation or Related Condition Waiver Services at Dungarvin Minnesota From July 1, 2004, Through June 30, 2005 (A-05-07-00023)

The OIG’s objective was to determine whether the State agency's claim for Medicaid reimbursement of home and community-based services (HCBS) provided by Dungarvin during State fiscal year (SFY) 2005 complied with Federal and State requirements. Of the 100 sampled beneficiary-months reviewed, the State agency claimed Medicaid reimbursement for services from 15 beneficiary-months that were unallowable because Dungarvin or Hennepin County did not adequately document the services in accordance with Federal or State requirements.

The OIG recommended the State agency: (1) refund $301,001 to the Federal Government, (2) require the Hennepin County office to strengthen its internal controls to ensure that it maintains individual service plans (ISPs) in accordance with Federal and State requirements and provides current ISP to Dungarvin, and (3) require Dungarvin to strengthen its internal controls to ensure it maintains ISPs, which includes the plans of care, in accordance with Federal and State requirements and documents and claims reimbursement for MRRC waiver services actually provided in accordance with Federal and State requirements. The State agency did not address the OIG’s first recommendation but agreed with the two other recommendations.

> Click here to view the full report: http://www.oig.hhs.gov/oas/reports/region5/50700023.pdf

6. Review of Severance and Termination Costs Claimed by CareFirst Blue Cross/Blue Shield of Maryland for the Period October 2005 Through December 2006 (A-03-07-00022)

The OIG’s objective was to determine whether CareFirst Blue Cross/Blue Shield of Maryland's (CareFirst) claims for severance and termination costs were allowable, reasonable, and allocable, in accordance with the Federal Acquisition Regulation, the Medicare contract provisions, and CareFirst severance policies. CareFirst claimed $1,394,977 in severance and termination costs for the period October 2005 through December 2006. The OIG did not question $1,362,526 of this amount. However, CareFirst claimed $32,451 in unallowable costs. In its comments on the OIG’s draft report, CareFirst concurred with all but one of the OIG’s findings. CareFirst provided additional documentation (letter, invoice, and schedule of hours/wages) from AON Consulting to support the professional fees totaling $12,024 for services claimed for November 2005.

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