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. Follow-Up Audit of the Medicaid Drug Rebate Program in Colorado (A-07-08-03108)
2. Superfund Financial Activities at the National Institute of Environmental Health Sciences for Fiscal Year 2007 (A-04-08-01057)
3. Review of High-Dollar Payments for Maryland Medicare Part B Claims Processed by TrailBlazer Health Enterprises for the Period January 1, 2003 Through December 31, 2005 (A-03-08-00025)
4. Marketing Materials for Medicare Prescription Drug Plans  (OEI-01-06-00050)
5. Review of Henry Ford Hospital's Reported Fiscal Year 2005 Wage Data (A-05-07-00063)
6. Review of Medicare Claims Submitted by Inpatient Psychiatric Facilities During the Transition to the Prospective Payment System in 2005 (A-01-07-00520)

1.  Follow-Up Audit of the Medicaid Drug Rebate Program in Colorado (A-07-08-03108) http://www.oig.hhs.gov/oas/reports/region7/70803108.pdf

Colorado's State agency partially corrected some of the weaknesses reported in the OIG's prior audit.  The State agency reported $1.8 million (Federal share) in drug rebates for family planning ($1 million) and a State-funded program ($766,000) based on estimated-rather than actual-expenditures, and did not report $45,000 ($22,000 Federal share) in interest.  Additionally, the State agency had $862,000 in outstanding disputes that were over 3 years past due for resolution with manufacturers, it did not report all necessary data relating to its Medicaid drug rebate program, and it had not collected rebates for single source drugs administered by physicians since June 30, 2007.  The State agency concurred with all of the OIG's recommendations and discussed the implementation and corrective actions proposed.

2.  Superfund Financial Activities at the National Institute of Environmental Health Sciences for Fiscal Year 2007 (A-04-08-01057) http://www.oig.hhs.gov/oas/reports/region4/40801057.pdf

The Superfund financial transactions at the National Institute of Environmental Health Sciences (NIEHS) for the period from October 1, 2006, through September 30, 2007, were allowable, allocable, and reasonable in accordance with applicable laws and regulations.  These Superfund transactions related to fiscal year (FY) 2002 through FY 2007 funds.  NIEHS receives funding to carry out functions mandated by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.  In general, NIEHS took appropriate action to ensure that its Superfund grantees submitted required audit reports.  This report contained no recommendations.

3.  Review of High-Dollar Payments for Maryland Medicare Part B Claims Processed by TrailBlazer Health Enterprises for the Period January 1, 2003 Through December 31, 2005
(A-03-08-00025) http://www.oig.hhs.gov/oas/reports/region3/30800025.htm

In report number A-03-07-00017, the OIG requested that TrailBlazer Health Enterprises (TrailBlazer) recover outstanding $115,000 in overpayments from a total of $145,000.  TrailBlazer recovered $98,500 but was unable to recover the remaining $17,500 in overpayments because the Medicare Part B carrier for Maryland had transferred to Highmark Medicare Services (Highmark).  The OIG provided a copy of report number A-03-07-00017 to Highmark for final resolution of the two outstanding overpayments totaling $17,500 as report number A-03-08-00025.

4.  Marketing Materials for Medicare Prescription Drug Plans  (OEI-01-06-00050) http://www.oig.hhs.gov/oei/reports/oei-01-06-00050.pdf

This report assesses CMS's oversight of marketing materials for stand-alone Medicare prescription drug plans (PDP) and determines the extent to which marketing materials for PDPs meet CMS guidelines.  CMS defines marketing materials as materials that promote a PDP; provide enrollment information; or explain its benefits, rules, and covered services.  Marketing materials include advertisements, comprehensive formularies, enrollment forms, pharmacy directories, and summaries of benefits.  CMS's Medicare Marketing Guidelines (the guidelines) specify what marketing materials must include when describing PDP coverage.  To help ensure accuracy and expedite the review process for certain marketing materials, CMS created model documents, which are uniform texts that contain required information.  Before PDP sponsors distribute marketing materials, they must submit them to CMS under one of its review processes:  standard review or file & use.  The guidelines also outline oversight activities for CMS to monitor marketing materials, such as requiring identification numbers on materials. 

OIG found that CMS's oversight for PDP marketing materials is limited.  For example, CMS did not complete a retrospective review of file & use marketing materials from 2006 until April 2008.  Furthermore, although CMS completed standard reviews of marketing materials on a timely basis, the reviews lack consistency across regions.  Additionally, identification numbers from 45 percent of the materials the OIG reviewed failed to match the numbers in CMS's system.  Because the identification numbers do not uniformly identify which materials are written in non-English languages or alternative formats, CMS lacks a systematic way to track these materials.  OIG also found that CMS's model documents are not consistent with its guidelines, resulting in problems with PDP marketing materials.  Lastly,

OIG found that overall, PDP marketing materials did not meet the guidelines.  Eighty-five percent of marketing materials failed to meet at least one element of CMS's guidelines.  The elements not met comprise omissions from the model documents as well as problems with the language created by sponsors.  These elements reflected the array of requirements in the guidelines, which ranged from details about PDP benefits and rules to requirements for font size for footnotes. 

5.  Review of Henry Ford Hospital's Reported Fiscal Year 2005 Wage Data (A-05-07-00063) http://www.oig.hhs.gov/oas/reports/region5/50700063.pdf

Henry Ford Hospital (the Hospital) overstated its wage data by $27 million and 316,281 hours in its fiscal year (FY) 2005 Medicare cost report.  Correcting the Hospital's errors decreased the average hourly wage rate from $32.26 to $31.08.  Under the acute-care hospital inpatient prospective payment system, the Centers for Medicare & Medicaid Services (CMS) adjusts the Medicare base rate paid to participating hospitals by the wage index applicable to the area in which the hospitals are located. CMS updates the wage indexes annually based on hospitals' reported wage data.

The OIG recommended that the Hospital submit a revised FY 2005 Medicare cost report to the fiscal intermediary to correct the wage data overstatements and implement review and reconciliation procedures to ensure that the wage data reported in future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements.  The Hospital agreed with the OIG's recommendations and stated that it had submitted revised wage index information to the intermediary and strengthened its review and reconciliation procedures.

6.  Review of Medicare Claims Submitted by Inpatient Psychiatric Facilities During the Transition to the Prospective Payment System in 2005 (A-01-07-00520) http://www.oig.hhs.gov/oas/reports/region1/10700520.pdf

Inpatient psychiatric facilities (IPF) that split-billed transition stays did not always cancel the split bills and rebill the Centers for Medicare & Medicaid Services (CMS) using prospective payment system rates and rules as required.  Based on the OIG's sample results, the OIG estimated that incorrectly billed transition stays for which IPFs had not canceled split bills and resubmitted correct bills resulted in about $9 million in overpayments in 2005.  CMS instructions state that if a beneficiary’s stay begins before and ends on or after the date on which the IPF becomes subject to the prospective payment system (a “transition stay”), the fiscal intermediary must base its payments to the facility on prospective payment rates and rules.  The instructions also state that IPFs that split the stay and submit two separate claims must cancel the split bills and then rebill the fiscal intermediary after the cancellation has been accepted.

The OIG recommended that CMS instruct the fiscal intermediaries to adjust claims for the sampled stays that resulted in overpayments of $408,000; review the OIG's information on the stays not included in the OIG's sample, which had potential overpayments estimated at $8.6 million ($9 million less $408,000), and work with the IPFs to recover any overpayments; and analyze postpayment data for claims submitted after the OIG's review to ensure that IPFs billed the claims properly and fiscal intermediaries paid them correctly.  CMS agreed with the OIG's recommendations.

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 

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