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. OIG Report Finds Continued Lack of Medical Supplier Compliance with Medicare Requirements

2. Review of High-Dollar Payments for Medicare Part B Claims Processed by Triple-S, Inc., for the Period January 1, 2003, Through December 31, 2005 (A-02-07-01041)

3. Review of Excessive Payments for Outpatient Claims Processed by National Government Services for Calendar Years 2003 Through 2005: California Providers (A-09-07-00059)

4. Review of Quality Improvement Organization in Ohio for August 1, 2002, Through July 31, 2005 (A-05-06-00043)

5. Review of Quality Improvement Organization in Washington (A-09-06-00039)

1. OIG Report Finds Continued Lack of Medical Supplier Compliance with Medicare Requirements

Inspector General Daniel R. Levinson announced today that the Office of Inspector General (OIG) for the Department of Health and Human Services issued another report on durable medical equipment, prosthetics, orthotics, and supply (DMEPOS) suppliers’ compliance with Medicare requirements. The report, “Los Angeles County Suppliers’ Compliance with Medicare Standards: Results from Unannounced Visits,” found that problems persist.

OIG inspected 905 suppliers to assess their compliance with certain Medicare standards. Although these suppliers must comply with more than 20 standards encompassing numerous requirements, OIG focused on four easily observed rules requiring that each supplier: (1) maintain a physical facility, (2) be accessible during reasonable business hours, (3) have a visible sign, and (4) post hours of operation.

OIG found suppliers not located at their addresses on file or, in some cases, not open during reasonable business hours. Medicare paid these companies approximately
$21 million in the year ending June 30, 2007.

“We recognize that the Centers for Medicare and Medicaid Services (CMS) has recently taken action to prevent Medicare supplier fraud — especially in Florida and California,” said Inspector General Levinson. “Nevertheless, this report, along with our previous work, demonstrates that Medicare continues to be vulnerable to noncompliant suppliers. I am committed to our ongoing effort with CMS and our law enforcement partners to prevent unscrupulous suppliers from defrauding Medicare at the expense of the Nation’s taxpayers and seniors.”.

> To read the full report, click here: http://www.oig.hhs.gov/publications/docs/press/2008/la_dme022508.pdf

2. Review of High-Dollar Payments for Medicare Part B Claims Processed by Triple-S, Inc., for the Period January 1, 2003, Through December 31, 2005 (A-02-07-01041)

The OIG’s objective was to determine whether Triple-S, Inc.’s high-dollar (Triple-S) Medicare payments to Part B providers were appropriate. During calendar years 2003–2005, Triple-S processed 13 Part B payments of $10,000 or more. Of the 13 high-dollar payments that Triple-S made to providers, 3 were appropriate. However, for the 10 remaining payments, Triple-S overpaid providers $45,426 for 4 payments and CMS’s Program Safeguard Contractor was reviewing 6 payments. Providers refunded two of the four overpayments, totaling $32,445, prior to the OIG’s fieldwork. Two overpayments, totaling $12,981, remained outstanding.

The OIG recommended that Triple-S (1) recover the $12,981 overpayment and (2) consider identifying and recovering any additional overpayments made for high-dollar Part B claims paid after calendar year 2005. Triple-S agreed with the OIG’s first recommendation. Regarding the OIG’s second recommendation, Triple-S stated that it implemented a computer edit on May 16, 2007, to identify and help recover potential high-dollar overpayments. However, Triple-S’s action did not address any potential high-dollar overpayments made between January 1, 2006, and May 15, 2007.

> To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region2/20701041.pdf

3. Review of Excessive Payments for Outpatient Claims Processed by National Government Services for Calendar Years 2003 Through 2005: California Providers (A-09-07-00059)

The OIG’s objective was to determine whether Medicare payments of $50,000 or more (high-dollar payments) that National Government Services made to hospitals for outpatient services were appropriate. Of the 59 high-dollar payments that National Government Services made for outpatient services for calendar years 2003 through 2005, 18 were appropriate. The remaining 41 payments included overpayments totaling $3,463,740. For all 41 claims, the hospitals inappropriately overstated the units of service, occasionally in combination with incorrect procedure codes. The hospitals have already refunded the overpayments; comments the OIG received from some hospitals indicated that they were analyzing their billing systems and procedures and would provide training and make system enhancements as appropriate.

Because National Government Services has already recovered the overpayments from the hospitals and implemented a Fiscal Intermediary Standard System edit to suspend high-dollar outpatient claims for prepayment review, the OIG have not included any recommendations in this report. National Government Services officials agreed with the results of the OIG’s audit.

> To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region9/90700059.pdf

4. Review of Quality Improvement Organization in Ohio for August 1, 2002, Through July 31, 2005 (A-05-06-00043)

The Senate Finance Committee requested that the OIG assess the fiscal integrity of the Medicare Quality Improvement Organizations with respect to six specified fiscal integrity areas. Of the $7.7 million of costs reviewed, $7.6 million appeared reasonable for Federal reimbursement. Of the remaining costs, Ohio KePRO Inc. incurred $11,874 for costs that were unallowable and $78,267 for costs that may not have complied with Federal requirements.

The OIG recommended that Ohio KePRO (1) refund $1,622 identified as unallowable direct conference-related costs; (2) reduce the indirect cost pool by $10,252 identified as unallowable indirect costs; (3) work with the CMS contracting officer to determine what portion of the $78,267 incurred for unsupported subcontractor labor and conference costs should be excluded from Federal reimbursement; and (4) maintain all Government-owned equipment in accordance with Federal Acquisition Regulation requirements, including performing periodic reconciliations of inventories, keeping complete inventory records, and reporting any excess equipment. Ohio KePRO generally disagreed with the recommendations.

> To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region5/50600043.pdf

5. Review of Quality Improvement Organization in Washington (A-09-06-00039)

The Senate Finance Committee requested that the OIG assess the fiscal integrity of the Medicare Quality Improvement Organizations with respect to six specified fiscal integrity areas.

Of the $12.2 million of costs reviewed, $12.1 million appeared reasonable for Federal reimbursement. The remaining $73,636 represented unallowable indirect costs, which Qualis Health allocated to subcontracts in excess of the allowable limit. In addition, Qualis Health overstated its (1) modified total direct costs (MTDC) bases by $404,302 in total for fiscal years 2003 through 2005 by including subcontract costs in excess of the allowable $25,000 per subcontract and (2) indirect cost pool by $71,741 for fiscal year 2005 by including unallowable organization costs.

The OIG recommended that Qualis Health (1) refund the $73,636 of unallowable indirect costs claimed on subcontracts and (2) reduce the MTDC allocation bases by $404,302 in total for unallowable subcontract costs and the indirect cost pool by $71,741 for unallowable organization costs when finalizing the indirect cost rates with CMS. Qualis Health agreed with the finding related to unallowable indirect costs but disagreed with the amount of the recommended refund. Based on the OIG evaluation of additional information concerning the finalization of indirect cost rates, the OIG revised the OIG report to reflect a refund amount of $73,636.

> To view the full report, click here: http://www.oig.hhs.gov/oas/reports/region9/90600039.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