1-800-392-6192 | OUR HOMEPAGE| OIG ARCHIVE | F&D PRESS ROOM
OIG Update - January 1, 2009 |
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). 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. 2. Review of Thomas Jefferson University Hospital's Reported Fiscal Year 2006 Wage Data 7. Review of Medicaid Credit Balances at Hennepin County Medical Center as of March 31, 2008 11. Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2007 14. Review of Medicaid Credit Balances at Weiss Hospital as of February 29, 2008 15. Review of Via Christi Regional Medical Center's Reported Fiscal Year 2005 Wage Data
New Hampshire Medicaid Payments for Skilled Professional Medical Personnel at the Enhanced Rate From October 1, 2004, Through September 30, 2006 (A-01-07-00011) The New Hampshire Department of Health and Human Services claimed $1.1 million (Federal share) in unallowable Medicaid costs at the enhanced 75-percent rate for skilled professional medical personnel for Federal fiscal years 2005 and 2006. >Click here to view the full report Review of Thomas Jefferson University Hospital's Reported Fiscal Year 2006 Wage Data (A-03-07-00024) Thomas Jefferson University Hospital (the Hospital) overstated its wage data by $12.2 million and 412,397 hours for the fiscal year (FY) 2006 Medicare cost report period. The OIG’s correction of the Hospital's errors increased the average hourly wage rate from $35.25 to $35.45. Under the inpatient prospective payment system for acute-care hospitals, the Centers for Medicare & Medicaid Services (CMS) adjusts the Medicare prospective payments by the wage index applicable to the area in which each hospital is located. CMS updates the wage indexes annually based on hospitals' reported wage data. The OIG recommended that the Hospital 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. In its comments on the OIG’s draft report, the Hospital agreed with or understood and accepted most of their findings; however, the Hospital disagreed in part with their finding regarding the disallowance of $4.2 million in pension benefit costs and the need to submit a revised FY 2006 cost report to correct the wage data overstatements. The Hospital also said that it would work to strengthen its review and reconciliation procedures. The OIG’s conclusion regarding overstated pension costs remains unchanged. After reviewing the Hospital's comments and information provided by the intermediary, the OIG deleted their recommendation to submit a revised cost report from this final report. >Click here to view the full report Review of High-Dollar Part B Claims Processed by CIGNA Government Services Carrier No. 05535 for the Period January 1, 2004, Through December 31, 2006 (A-04-08-00043) During calendar years (CY) 2004-2006, CIGNA Government Services Carrier No. 05535 (the contractor) overpaid providers in North Carolina $156,000. Generally, the contractor made the overpayments because the providers incorrectly billed excessive units of service. In addition, the Medicare claim processing systems did not have sufficient edits in place during CYs 2004-2006 to detect and prevent payments for these types of erroneous claims. The OIG recommended that the contractor recover the identified overpayments. In written comments on the draft report, CIGNA Government Services stated that it had adjusted these 17 claims and was pursuing the associated overpayments. >Click here to view the full report Review of Clinic and Practitioner Claims Billed as Family Planning Services Under the New York State Medicaid Program (A-02-07-01037) The State improperly received enhanced 90-percent Federal reimbursement for 102 family planning claims submitted by clinics and practitioners. Based on their sample results, OIG estimated that the State improperly received $17.1 million in Federal Medicaid reimbursement. This overpayment occurred because providers incorrectly claimed services as family planning, and the State's Medicaid Management Information System (MMIS) edit routines did not adequately identify claims unrelated to family planning. OIG recommended that the State (1) refund $17.1 million to the Federal Government, (2) reemphasize to providers that only services directly related to family planning should be billed as family planning, (3) ensure that MMIS edit routines use all appropriate claim information to identify claims that are ineligible for enhanced 90-percent Federal reimbursement, and (4) determine the amount of Federal Medicaid funds improperly reimbursed for claims unrelated to family planning subsequent to the OIG audit period and refund that amount to the Federal Government. In its comments on the OIG’s draft report, the State generally concurred with their recommendations. >Click here to view the full report Review of High-Dollar Payments for Maryland and District of Columbia Medicare Hospital Outpatient Claims Processed by Highmark Medicare Services for the Period October 1 Through December 31, 2005 (A-03-07-00014) Highmark Medicare Services (Highmark) overpaid $54,000 for the five high-dollar payments it made for hospital outpatient claims in Maryland and the District of Columbia. Overpayments totaling $51,000 were refunded either prior to or during the OIG’s audit. Highmark has initiated recovery of the remaining overpayments totaling $3,000. >Click here to view the full report Audit of CIGNA Government Services' Unaudited Multi-Carrier System Forward Funding Costs for Fiscal Year 2003 (A-04-08-00038) The $3.5 million in unaudited Multi-Carrier System forward funding costs claimed by CIGNA Government Services (CIGNA) on its FY 2003 Final Administrative Cost Proposal was adequately supported, in accordance with contract provisions, and therefore allowable for Federal reimbursement. However, contrary to CIGNA corporate policy, CIGNA management did not always sign employee timesheets that indicated the employee's presence on the job. >Click here to view the full report Review of Medicaid Credit Balances at Hennepin County Medical Center as of March 31, 2008 (A-05-08-00065) As of March 31, 2008, Hennepin County Medical Center's credit balances included 34 overpayments totaling $56,000 ($29,000 Federal share) that had not been returned to the Medicaid program. >Click here to view the full report Comparing Special Needs Plan Beneficiaries to Other Medicare Advantage Prescription Drug Plan Beneficiaries (OEI-05-07-00490) On average, Special Needs Plan (SNP) beneficiaries had higher prescription drug utilization and costs than other Medicare Advantage Prescription Drug Plan (MA-PD) beneficiaries in 2006. However, despite SNP beneficiaries' higher rates of drug utilization, SNP and other MA PD beneficiaries were similarly exposed to potentially inappropriate drug pairs. Congress created the SNP authority to allow Medicare Advantage managed care plans to develop targeted clinical programs to care more effectively for high-risk beneficiaries. Since SNPs became available in 2006, the number of SNPs and SNP beneficiary enrollment has grown rapidly. Policymakers have focused their attention on SNPs because of this growth and because SNPs, like other Medicare Advantage plans, cost more than fee-for-service Medicare. In particular, policymakers have questioned whether SNPs are providing specialized care for special needs individuals. OIG found that, on average, SNP beneficiaries filled 11 percent more prescriptions than other MA PD beneficiaries. In addition, the average annual prescription cost per SNP beneficiary was 49 percent higher compared to that of other MA-PD beneficiaries. Despite different drug utilization patterns, the type and severity of the potentially inappropriate drug pairs that SNP beneficiaries were exposed to varied little from those of other MA PD beneficiaries. The majority of potentially inappropriate drug pairs for both SNP and other MA PD beneficiaries were potential drug interactions, most of which were of moderate risk. Severe and serious drug interactions accounted for 17 percent of all potential drug interactions for SNP and other MA-PD beneficiaries. These findings led the OIG to recommend that CMS should help SNPs and other MA-PDs provide physicians and pharmacists the information they need to prevent inappropriate drug pairs leading to adverse drug events. To do so, CMS should continue to encourage plans to fully implement e prescribing programs that improve information physicians and pharmacists have about beneficiaries' medication histories. In addition, CMS should provide plans information on inappropriate drug pairs most likely to lead to severe or serious adverse drug events in the Medicare population. Finally, CMS should encourage plans to provide tools to assist physicians and pharmacists in appropriately analyzing and using the information they receive. CMS concurred with the OIG’s recommendation to help SNPs and other MA PDs provide physicians and pharmacists the information they need to prevent inappropriate drug pairs that could lead to adverse drug events. CMS noted that Part D sponsors are currently required to maintain systems to monitor drug utilization, including the use of potentially inappropriate drug pairs. In addition, CMS stated that it supports a number of efforts aimed at preventing inappropriate drug pairs that could lead to adverse drug events. >Click here to view the full report Review of High-Dollar Payments for Outpatient Services Processed by Palmetto GBA for the Period January 1, 2004, Through December 31, 2005 (A-04-08-06010) Of the 39 high-dollar payments ($50,000 or more) that Palmetto GBA made for outpatient services for calendar years 2004 and 2005, 17 were appropriate. The remaining 22 payments included overpayments totaling $1.8 million, which the hospitals had not refunded by the beginning of the OIG’s audit. >Click here to view the full report Adverse Events in Hospitals: Case Study of Incidence Among Medicare Beneficiaries in Two Selected Counties (OEI-06-08-00220). Fifteen percent of hospitalized Medicare beneficiaries in two selected counties experienced an adverse event during their hospital stays. Adverse event incidence rates for hospitalizations that met the OIG’s three criteria were as follows: less than 1 percent of Medicare beneficiaries experienced an adverse event on the National Quality Forum (NQF) list of Serious Reportable Events (i.e., "never events") 4 percent of beneficiaries experienced an adverse event on CMS's list of hospital-acquired conditions and 13 percent of beneficiaries experienced an adverse event resulting in the four most serious categories on an established patient harm scale. (Some adverse events met more than one criterion.) Although an adverse event indicates that the care resulted in an undesirable clinical outcome and may involve medical errors, adverse events do not always involve errors, negligence, or poor quality of care and may not always be preventable. The Tax Relief and Health Care Act of 2006 (the Act) requires that OIG report to Congress regarding the incidence of never events among Medicare beneficiaries, payment by Medicare or beneficiaries for services furnished in connection with such events, and CMS administrative processes used to identify events and deny payment. This report is one in a series to fulfill the requirements of the Act and inform decision makers regarding never events. For the purposes of this and related reports, OIG expands beyond the term never event to address "adverse events," or patient harm resulting from medical care. The OIG also found that only 1 of the 11 adverse events they identified on CMS's list of hospital-acquired conditions and NQF's list of Serious Reportable Events resulted in higher Medicare reimbursement to the hospital. In addition to the adverse events identified, another 15 percent of Medicare beneficiaries experienced events that resulted in temporary harm. These temporary harm events are not included in the OIG’s overall rate of adverse events because they did not prolong the hospital stay, require life-saving intervention, or result in permanent harm. Although the results of this review are not nationally representative, the extent of adverse events and temporary harm found in this case study substantiates concerns about the incidence of adverse events in hospitals and the importance of safety initiatives to reduce occurrences. The OIG works in this area will continue through 2009. The OIG received positive comments on a draft of this report from AHRQ and CMS. CMS reiterated its policies to encourage the prevention of adverse events and indicated that OIG identification of hospital-acquired conditions and their effect on Medicare payment allowed for a deeper understanding of the payment policy in practice. CMS also offered a point of clarification regarding the discussion of one of the hospital-acquired conditions, catheter-associated urinary tract infection, and recommended further evaluation of this issue in OIG's subsequent study to estimate the national incidence of adverse events. OIG agrees that further evaluation is warranted and will address this issue in future work in this series. >Click here to view the full report Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2007 (OEI-03-08-00450) The OIG identified 71 Medicare Part B drug codes that would have been eligible for price adjustment if a revised payment methodology recently implemented by CMS had been in effect throughout 2007. Additional codes may have been eligible for price adjustments; however, missing or unavailable pricing data prevented OIG from examining certain drug codes. 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. To date, OIG has issued seven quarterly reports comparing ASPs to AMPs; however, CMS has yet to make any changes to reimbursement as a result of OIG's findings. Of the 71 drug codes that met the threshold for price adjustment, one-fourth would have met the 5-percent threshold during multiple quarters of 2007. Because some drug products did not have AMP data, OIG could not compare prices for 25 percent of drug codes in each of the first and third quarters and for over 40 percent of codes in each of the second and fourth quarters. Manufacturers for almost half of drug products without AMPs participated in the Medicaid drug rebate program in 2007 and were therefore generally required to submit AMP data. Consistent with statutory requirements, OIG recommend that CMS develop a process to adjust payment amounts based on the results of OIG's pricing comparisons, lower Medicare reimbursement amounts for drugs that meet the 5-percent threshold, and ensure that drug manufacturers are submitting the required AMP data in a timely manner. CMS concurred with the OIG’s recommendation to develop a process for adjusting payment amounts but did not specifically concur with the OIG’s recommendation to lower Medicare reimbursement for drugs that meet the 5-percent threshold. CMS stated that it will continue its efforts to ensure that manufacturers are submitting required AMP data in a timely manner. >Click here to view the full report Comparison of First-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Third Quarter 2008 (OEI-03-08-00530) Using a revised payment methodology recently implemented by CMS, OIG identified a total of 41 Healthcare Common Procedure Coding System (HCPCS) drug codes with average sales prices (ASP) that exceeded average manufacturer prices (AMP) by at least 5 percent in the first quarter of 2008. If reimbursement amounts for these 41 codes had been based on 103 percent of the AMPs, Medicare expenditures would have been reduced by $7.8 million during the third quarter of 2008 alone. 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 ASP for a particular drug exceeds the drug’s 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 is OIG’s ninth report comparing ASPs to AMPs; however, to date, CMS has yet to make any changes to reimbursement as a result of OIG’s findings. Of the 41 drug codes that met the threshold for price adjustment, 16 had AMP data for every National Drug Code (NDC) that CMS used to establish reimbursement amounts. Eight of these 16 codes were previously eligible for price adjustment under the revised payment methodology, with 3 codes meeting the 5-percent threshold in each of the past five quarters, dating back to the first quarter of 2007. The remaining 25 of 41 drug codes also met the 5-percent threshold in the first quarter of 2008 but did not have AMP data for every NDC that CMS used when calculating reimbursement. The OIG could not compare ASPs and AMPs for 76 HCPCS codes because AMP data were not submitted for any of the NDCs that CMS used to calculate reimbursement. Manufacturers for over one-fifth of these NDCs had Medicaid drug rebate agreements and were therefore generally required to submit AMPs. OIG is working with CMS to evaluate and pursue appropriate actions against those manufacturers that fail to submit required data. >Click here to view the full report Review of High-Dollar Payments for Outpatient Services Processed by First Coast Service Options, Inc., for the Period January 1, 2004, Through December 31, 2005 (A-04-08-06008) Of the 40 high-dollar payments ($50,000 or more) that First Coast Service Options, Inc. (First Coast), made for outpatient services for calendar years (CY) 2004 and 2005, 23 were appropriate. The remaining 17 payments included overpayments totaling $1.5 million, which the hospitals had not refunded by the beginning of the OIG’s audit. The hospitals received these overpayments by billing excessive units of service. First Coast made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place during CYs 2004 and 2005 to detect and prevent the overpayments. OIG recommended that First Coast recover the $1.5 million in identified overpayments. In written comments on the OIG’s draft report, First Coast stated that it had adjusted the identified outpatient claims and initiated its standard overpayment recovery procedures to recover the overpayments. >Click here to view the full report Review of Medicaid Credit Balances at Weiss Hospital as of February 29. 2008 (A-05-08-00049) As of February 29, 2008, Weiss Hospital's Medicaid credit balances included 29 overpayments totaling $188,000 ($94,000 Federal share) that had not been returned to the Medicaid program. >Click here to view the full report Review of Via Christi Regional Medical Center's Reported Fiscal Year 2005 Wage Data (A-07-07-02726) Via Christi Regional Medical Center (the Hospital) did not fully comply with Medicare requirements for reporting wage data in its fiscal year (FY) 2005 Medicare cost report. As a result, the Hospital overstated its wage data by $634,000 (numerator of its wage rate calculation) and understated its wage data by 12,263 hours (denominator of its wage rate calculation) for the FY 2005 Medicare cost report period. The OIG’s correction of the Hospital's errors decreased the average hourly wage rate approximately 0.5 percent. The OIG recommended that the Hospital submit a revised FY 2005 Medicare cost report to the fiscal intermediary to correct the wage data overstatement 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. In written comments on the OIG’s draft report, the Hospital concurred with three of their findings and did not concur with two other findings. The Hospital neither concurred nor nonconcurred with the recommendations. Based on discussions with the Hospital after the issuance of their draft report but before their receipt of the Hospital's written comments, OIG revised their finding on overstated contract labor costs, the recommended adjustment amount, and the wage rate calculation. The OIG’s findings and recommendations, as revised, are valid. >Click here to view the full report Review of High-Dollar Payments for Inpatient Services Processed by First Coast Service Options, Inc., for the Period January 1, 2004, Through December 31, 2005 (A-04-07-06020) Of the 199 high-dollar payments ($200,000 or more) that First Coast Service Options, Inc. (First Coast), made to hospitals for inpatient services for calendar years 2004 and 2005, 74 were appropriate. The remaining 125 payments included overpayments totaling $1.7 million, which had not been repaid by the start of the OIG’s audit. Contrary to Federal guidance, hospitals reported units of service inaccurately and reported excessive charges that resulted in inappropriate outlier payments. Hospitals attributed most of the incorrect claims to clerical errors, conversion of the pharmacy system from dispensing units to billing units, or outdated billing systems. First Coast made these incorrect payments because neither the Fiscal Intermediary Standard System nor the Common Working File had sufficient edits in place to detect and prevent the overpayments. The OIG recommended that First Coast recover the $1.7 million in identified overpayments, use the results of this audit in its provider education activities, and consider implementing controls to identify and review all payments greater than $200,000 for inpatient services. In written comments on the OIG’s draft report, First Coast agreed to initiate recovery procedures for the overpayments that OIG identified. First Coast stated that it was redesigning its education materials to strengthen their effectiveness and that it would work with the Centers for Medicare & Medicaid Services to implement an edit for payments greater than $200,000. >Click here to view the full report
For the List of Excluded Individuals/Entities (LEIE), follow this link: For the index of recent they Advisory Opinions, follow this link: http://oig.hhs.gov/fraud/advisoryopinions/opinions.asp To see "Frequently Asked Questions" (FAQs) on the OIG Advisory Opinion process, go here: http://oig.hhs.gov/fraud/exclusions/faq.asp |
This written advice is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. This solicitation is distributed with the understanding that Feeley & Driscoll, P.C. is not rendering legal, accounting, or other professional advice or opinions on specific facts or matters, and accordingly, assumes no liability whatsoever in connection with its use.
