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Feeley & Driscoll's OIG Update: August 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). 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. This update is a monthly publication from the Healthcare Group at Feeley & Driscoll, P.C.
For the first two quarters of fiscal year (FY) 2009, CMS calculated the additional Medicaid funding awarded under the American Recovery and Reinvestment Act (ARRA) in accordance with Federal law. The ARRA provides fiscal relief to States to protect and maintain State Medicaid programs in a period of economic downturn. For the recession adjustment period (October 1, 2008, through December 31, 2010), the ARRA provides approximately $87 billion in additional Medicaid funding based on temporary increases in States' Federal medical assistance percentages (FMAP). For the first two quarters of FY 2009, CMS calculated and made available to States approximately $15.2 billion in additional funding. To calculate the additional funding for each State and the District of Columbia, CMS used the reported actual or estimated expenditures, deducted the expenditures identified in section 5001(e) of the ARRA (to which the increased FMAPs do not apply) if the State reported the expenditures, and multiplied the remaining expenditures by the correct percentage-point increase in the FMAP. Consequently, this report contains no recommendations .>Click here to view the full report 2. Review of Duplicate Capitation Payments to Medicare Advantage Organizations and Programs of All-Inclusive Care for the Elderly Organizations The OIG found that of the approximately 218 million capitation payments totaling approximately $158 billion that CMS made for Medicare enrollees from January 2006 through March 2008, only 373 payments totaling $301,000 were duplicate payments for 1 month of health care coverage. CMS may make only one capitation payment per month for each Medicare individual enrolled in a Medicare Advantage plan or a Programs of All-Inclusive Care for the Elderly plan. Although CMS had correctly paid organizations for the vast majority of enrollees, the validation process that CMS used to ensure the accuracy of payments did not identify and prevent these improper payments. The OIG recommended that CMS (1) recoup the $301,000 in improper payments; (2) determine whether enhancements to its validation process would be cost effective and, if so, implement the enhancements; and (3) periodically review, on a post payment basis, payments made to organizations to detect and recover any duplicate payments. In comments on the OIG’s draft report, CMS concurred with their recommendations and described the corrective actions that it was taking or planned to take. >Click here to view the full report 3. Review of Medicare Contractor Processes for Reviewing Pennsylvania Hospitals' Wage Data The OIG conducted this review as a result of a congressional request regarding possible disparate treatment of western and eastern Pennsylvania hospitals during Highmark Medicare Services' (Highmark) wage data reviews. The OIG found that Highmark followed CMS requirements when reviewing Altoona Regional Health System's wage data that CMS used to calculate the fiscal years (FY) 2004 through 2009 wage indexes. Highmark completed its reviews within the prescribed timeframes, and Highmark's adjustments were consistent with guidance. Additionally, Highmark and Wisconsin Physicians Service followed CMS requirements when reviewing 20 other Pennsylvania hospitals' wage data that CMS used to calculate the FY 2009 wage indexes. The two Medicare contractors completed their reviews within established timeframes and provided documentation to support their adjustments to the hospitals' wage data. Because the OIG found no evidence of disparate treatment based on the Medicare contractor that reviewed the wage data or a hospital's geographic location, the OIG made no recommendations. >Click here to view the full report 4. Review of the Altoona Regional Health System's Reported Fiscal Year 2006 Wage Data The Altoona Regional Health System (the Hospital), located in Pennsylvania, did not fully comply with Medicare requirements for reporting wage data in its fiscal year (FY) 2006 Medicare cost report. Under the acute-care hospital inpatient prospective payment system, CMS adjusts the Medicare base rate paid to participating hospitals by the wage index applicable to the area in which each hospital is located. CMS updates the wage indexes annually based on hospitals' wage data reported 4 years earlier. The OIG found that the Hospital overstated its wage data by $1.1 million and 1,977 hours. Their correction of the Hospital's errors decreased the average hourly wage rate approximately 0.83 percent. Because the Hospital did not revise the wage data in its cost report before CMS computed the FY 2009 wage indexes, the FY 2009 wage index for the Hospital's statistical area was overstated, which will result in overpayments to both of the hospitals that use this wage index. 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 their draft report, the Hospital stated that it would do so. >Click here to view the full report 5. Prevalence and Qualifications of Non-physicians Who Performed Medicare Physician Services In the first 3 months of 2007, when Medicare allowed physicians more than 24 hours of services in a day, non-physicians performed half of the services and unqualified non-physicians performed 21 percent of these services. Medicare Part B pays for services that are billed by physicians but are performed by non-physicians under the "incident to” rule. Little is known about these services because physicians are not required to identify them on their Medicare claims. To identify the services not personally performed by physicians, the OIG sampled claims from physicians for whom Medicare allowed more than 24 hours of services in a single day in the first 3 months of 2007. Some of the services that were performed by unqualified non-physicians were invasive services, involving entry into the body by incision or insertion of an instrument. These services, in particular, may represent a risk to Medicare beneficiaries when they are performed by unqualified individuals. The OIG is concerned that the problem of Medicare services performed by unqualified non-physicians may be more widespread than they can report at this time. The OIG recommends that CMS seek revisions to the "incident to" rule. The rule should require that physicians who do not personally perform the services they bill to Medicare ensure that no persons except: (1) licensed physicians personally perform the services or (2) non-physicians who have the necessary training, certification, and/or licensure, pursuant to State laws, State regulations, and Medicare regulations, personally perform the services under the direct supervision of a licensed physician. Further, CMS should require that physicians who bill services to Medicare that they do not personally perform to identify the services on their Medicare claims by using a service code modifier. The modifier would enable CMS to monitor claims to ensure that physicians are billing for services performed by non-physicians with appropriate qualifications. Finally, CMS should take appropriate action to address the claims for services that the OIG detected that (1) were billed by physicians and performed by non-physicians that were, by definition, not "incident to" services and (2) were for rehabilitation therapy services performed by non-physicians who did not have the training of a therapist. In comments on the draft report, CMS concurred with two of the OIG’s three recommendations. CMS did not concur with their recommendation to create a service code modifier to identify physicians' claims for services that physicians do not personally perform. The OIG continues to recommend that CMS have the ability to identify and monitor these claims. CMS stated it would study the operational issues involved in implementing the recommendation. The OIG look forward to learning the specific steps CMS plans to take with respect to this issue. >Click here to view the full report back to top Based on a review of medical record documentation and supplier documentation, 86 percent of group 2 support surface claims for the first half of 2007 did not meet Medicare coverage criteria. This amounted to an estimated $33 million in inappropriate payments during that time. The OIG considered a claim as not meeting Medicare coverage criteria if it either (1) did not meet Medicare's clinical coverage requirements or (2) did not meet Medicare's supplier documentation requirements. Pressure reducing support surfaces are used for the care or prevention of pressure ulcers. Pressure ulcers, also known as bedsores or decubitus ulcers, commonly occur among the elderly and among individuals with spinal cord injuries. Support surfaces are covered under Medicare Part B as durable medical equipment (DME). CMS categorizes support surfaces into three groups based on the complexity of their features. Group 2 is the largest group. Based on an independent medical review, the OIG found that 80 percent of group 2 support surface claims did not meet Medicare's clinical coverage requirements. In addition, the OIG found that 33 percent of claims did not meet supplier documentation requirements. Over three-quarters of the claims that did not meet supplier documentation requirements also did not meet Medicare's clinical coverage requirements. More specifically, 38 percent of the claims were undocumented, 22 percent were medically unnecessary, 17 percent had insufficient documentation, and 3 percent had other billing errors. For the claims that did not meet supplier documentation requirements, the supplier delivered the support surface before obtaining the physician order, the supplier did not have a physician order, the supplier was missing proof of delivery, or the physician order was not dated. Lastly, the OIG found that CMS contractors had limited safeguards in place to prevent improper payments for group 2 support surfaces. In particular, contractors' use of the KX modifier, which a supplier uses to indicate that a claim meets Medicare coverage criteria and that adequate documentation exists, was not successful in flagging inappropriate claims. In addition, none of the CMS contractors conducted any widespread medical reviews of support surface claims. Moreover, only half of the CMS contractors responsible for supplier education conducted any educational activities in recent years that focused on group 2 support surfaces. Based on the findings of this report, the OIG recommend that CMS ensure that claims for group 2 support surfaces meet Medicare coverage criteria and are paid appropriately. Accordingly, CMS should: (1) conduct additional prepayment and post payment medical reviews of group 2 support surface claims; (2) educate suppliers and health care providers, such as home health agencies, about Medicare coverage criteria for support surfaces; (3) review the use of the KX modifier as a program safeguard; (4) conduct additional statistical analyses to monitor payments for group 2 support surfaces; and (5) take appropriate action regarding the claims in their sample that were inappropriate. CMS concurred with all five of the OIG’s recommendations. >Click here to view the full report 7. Review of New Jersey's Compliance With the "Reimbursement of State Costs for Provision of Part D Drugs" Medicare Demonstration Project Requirements The New Jersey Department of Human Services (DHS) complied with certain provisions of the Medicare demonstration application when claiming drug costs for full-benefit dually eligible beneficiaries (eligible for both Medicare and Medicaid). However, DHS claimed some drug and administrative costs to both the Medicaid program and the Medicare demonstration project. Of the approximately $79 million that DHS was reimbursed through the Medicare demonstration project and that it included on its Medicaid Forms CMS-64, DHS accurately adjusted its Forms CMS-64 to reflect $67.8 million ($33.9 million Federal share) for some drug costs. However, DHS did not adjust its Forms CMS-64 to reflect $11.3 million ($5.8 million Federal share) for additional demonstration project costs. According to DHS officials, DHS did not adjust its Forms CMS-64 to account for some of its drug costs and most of its administrative costs paid through the Medicare demonstration project because of a clerical oversight. The OIG recommended that DHS refund $5.8 million to the Federal Government for improper Medicaid drug claim payments ($5.2 million) and administrative cost payments ($600,000). The OIG did not make any procedural recommendations because the demonstration project has ended. In its comments on their draft report, DHS said that it would adjust its expenditure reports in accordance with the OIG’s recommendation. >Click here to view the full report 8. Part B Services During Non-Part A Nursing Home Stays: Durable Medical Equipment This report presents findings based on the OIG’s review of Part B durable medical equipment (DME) payments during non-Part A nursing home stays in 2006. This report stems from the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, which mandates OIG to monitor Medicare Part B payments during non-Part A nursing home stays. Several ongoing studies are addressing other vulnerable Part B payment areas. The OIG found that $30 million was inappropriately allowed for DME during non-Part A skilled nursing facility (SNF) stays, most of which were also certified by Medicaid. Also, the OIG found that nearly $11.9 million more was inappropriately allowed by Part B during Medicaid nursing facility (NF) stays and distinct part nursing home stays providing primarily skilled care. Further, CMS and States reported that they do not maintain a primary level of care designation for nursing homes that could facilitate accurate claim submission by suppliers and proper claim adjudication by payment contractors. Medicare Part A covers nursing home care for up to 100 days in a SNF. If nursing home care is still needed after the 100 days or the beneficiary did not qualify for a Part A SNF stay, Medicare Part B may provide coverage for certain medical and other health services. In these situations, the stays are termed non-Part A nursing home stays. However, Part B does not pay for DME unless the nursing home qualifies as a beneficiary's home. Because most nursing homes provide primarily skilled care or rehabilitation, they are excluded from qualifying as a beneficiary's home. Only a small number of nursing homes certified only for Medicaid, called NFs, or distinct parts of nursing homes may qualify as a beneficiary's home. In contrast, the large number of SNFs and dually certified nursing homes-those certified for both Medicare and Medicaid-do not qualify as a beneficiary's home. To identify inappropriate payments for DME, the OIG used resident assessment data to determine all nursing home stays nationwide during 2006. The OIG then analyzed related Medicare claims data for any DME payments during these stays. To address these overpayments, the OIG recommend that CMS routinely identify non-Part A beneficiary nursing home stays; recoup inappropriate payments identified in this report; identify patients entering nursing homes with rented DME; and implement a process to identify nursing homes that provide primarily skilled care and make this information available to claims processors, nursing homes, and suppliers. CMS concurred with the first two recommendations and agreed with the underlying objectives of the other recommendations but suggested alternative approaches using claims processing edits to address them. >Click here to view the full report 9. Review of Medicaid Credit Balances at Sunny Vista Living Center Medicaid credit balances recorded in Sunny Vista Living Center's accounting records for patient services included $74,000 ($37,000 Federal share) in unallowable overpayments that should have been returned to the Medicaid program pursuant to Federal and State requirements. These Medicaid credit balances also included $22,000 ($11,000 Federal share) in potentially unallowable overpayments that may, subject to further evaluation by the State agency, have to be returned to the Medicaid program. >Click here to view the full report 10. Review of Medicaid Credit Balances at Boulder Manor Nursing Home Medicaid credit balances recorded in Boulder Manor Nursing Home's accounting records for patient services included $49,000 ($25,000 Federal share) in unallowable overpayments that should have been returned to the Medicaid program pursuant to Federal and State requirements. These Medicaid credit balances also included $23,000 ($12,000 Federal share) in potentially unallowable overpayments that may, subject to further evaluation by the State agency, have to be returned to the Medicaid program. >Click here to view the full report 11. Review of Medicaid Credit Balances at Colorado State Veterans Home at Fitzsimons Medicaid credit balances recorded in Colorado State Veterans Nursing Home at Fitzsimons' accounting records for patient services included $87,000 ($44,000 Federal share) in unallowable overpayments that should have been returned to the Medicaid program pursuant to Federal and State requirements. These Medicaid credit balances also included $15,000 ($8,000 Federal share) in potentially unallowable overpayments that may, subject to further evaluation by the State agency, have to be returned to the Medicaid program. |
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