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Feeley & Driscoll's OIG Update: October 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.
Claims billed by Cape Cod Emergency Associates (CCEA) for emergency department services did not always meet certain Medicare requirements. Specifically, 42 of the 100 claims that the OIG reviewed were for services that were either incorrectly coded (39 claims) or incorrectly billed (3 claims). The incorrectly coded claims resulted in overpayments and underpayments to CCEA that, when netted, were immaterial, and the incorrectly billed claims resulted in $235 in overpayments to CCEA. >Click here to view the full report 2. State and Local Pandemic Influenza Preparedness: Medical Surge This report determines the extent to which selected States and localities have prepared for a medical surge in response to an influenza pandemic and have conducted and documented exercises that test their medical surge preparedness. The OIG found that although the selected States and localities that the OIG reviewed are making progress in preparing for a medical surge, more needs to be done to improve States' and localities' ability to respond to an influenza pandemic. A pandemic will affect much of the country at the same time, so medical resources-such as hospital beds, medical equipment, and personnel-will likely be scarce. The ability to rapidly respond to an increased demand for medical resources is often referred to as a medical surge. The recent public health emergency caused by an outbreak of human cases of H1N1 influenza has highlighted the need for States and localities to be prepared for a medical surge. The OIG found that all of the 10 selected localities that the OIG reviewed had established partnerships to prepare for a medical surge; however, the degree to which coordination occurred varied. The OIG also found that fewer than half of the selected localities had started to recruit medical volunteers, and none of the five States that the OIG reviewed had implemented an electronic system to manage these volunteers. Similarly, all 10 localities had acquired limited medical equipment for a pandemic, but only three of the five States had electronic systems to track available beds and equipment. In addition, most of the selected localities were in the early stages of planning for alternate care sites, and most had not identified guidelines for altering triage, admission, and patient care during a pandemic. Finally, although all of the selected localities conducted medical surge exercises, none consistently documented the lessons learned. Based on the findings of this report, the OIG recommend that ASPR, in collaboration with CDC: (1) work with States and localities to improve their efforts within each of the five components of medical surge that the OIG reviewed, (2) ensure that States and localities consistently document the lessons learned from preparedness exercises that address medical surge, (3) address the issue of legal protections for medical professionals and volunteers who respond to public health emergencies, (4) facilitate the sharing of information and emerging practices among States and localities, and (5) provide training and technical assistance to States and localities on key issues. ASPR concurred with all five of their recommendations. >Click here to view the full report 3. Local Pandemic Influenza Preparedness: Vaccine and Antiviral Drug Distribution and Dispensing The OIG found that while the majority of selected localities had begun planning to distribute and dispense vaccines and antiviral drugs, more needs to be done to improve localities' ability to respond to an influenza pandemic. In June 2009, the World Health Organization raised the pandemic influenza alert level to Phase 6 and declared the start of the 2009 H1N1 influenza pandemic. To assist States and localities in planning for an influenza pandemic, the Department of Health and Human Services (HHS) provides guidance regarding vaccine and antiviral drug distribution and dispensing. HHS also recommends that States and localities exercise their pandemic influenza vaccine and antiviral drug distribution and dispensing plans and collaborate with community partners to develop and exercise these plans. While the Assistant Secretary for Preparedness and Response (ASPR) annually reviews State-level pandemic influenza planning, it does not directly assess local pandemic influenza planning. Therefore, based on HHS guidance documents and input from CDC and ASPR, the OIG reviewed 89 preparedness items within eight planning areas (i.e., components) to determine the extent to which 10 selected localities had prepared to distribute and dispense pandemic influenza vaccines and antiviral drugs. The OIG found that selected localities had not addressed in their planning documents most of the distribution and dispensing components and preparedness items identified in HHS pandemic influenza guidance that OIG reviewed. Across the eight components, localities' planning documents generally were not actionable. That is, plans did not generally identify the organization or individuals responsible for carrying out specific actions; the sources of personnel that would be necessary to staff distribution and dispensing positions; and/or include valid, detailed formal agreements with partnering agencies. In addition, while all selected localities conducted at least one exercise related to vaccine and antiviral drug distribution and dispensing, most did not consistently create After Action Reports and Improvements Plans for these exercises. Finally, all selected localities collaborated with different types of community partners to develop and exercise their plans to distribute and dispense vaccines and antiviral drugs during an influenza pandemic. The OIG recommend that CDC work with States to improve local pandemic influenza vaccine and antiviral drug distribution and dispensing preparedness by: (1) determining why localities appear to be in the early stages of planning, (2) prioritizing the planning areas where States should focus any carryover or future funding, and (3) placing special emphasis on ensuring that localities develop actionable plans. Further, CDC should coordinate with States to ensure that localities consistently document exercises with After Action Reports and Improvement Plans to enhance their pandemic influenza vaccine and antiviral drug distribution and dispensing preparedness. Finally, CDC should facilitate the sharing of pandemic influenza planning and response information and emerging promising practices. CDC agreed with two of the three recommendations. Specifically, CDC agreed to work with States to encourage localities to develop After Action Reports and Improvement Plans for their preparedness exercises. Additionally, CDC agreed that States and localities should use the Lessons Learned Information Sharing Web site to share planning resources. CDC did not indicate whether it agreed with the first recommendation, but noted that it plans to use some of OIG's suggested actions to address this recommendation. For example, CDC acknowledged the need for States to prioritize some of the planning areas OIG identified and agreed that localities need to develop actionable vaccine and antiviral drug distribution and dispensing plans. >Click here to view the full report 4. Review of Pennsylvania's Medicaid Payments for Targeted Case Management Services for Calendar Years 2003 Through 2005 Pennsylvania's claims for targeted case management (TCM) services did not always comply with Federal and State requirements. The Social Security Act authorizes State Medicaid agencies to provide case management services to Medicaid beneficiaries. These services are referred to as TCM when they are furnished to specific populations in a State. Based on their review of 375 claims in 100 sampled beneficiary-months, 36 claims included in 15 beneficiary-months were unallowable because the services were unsupported by case records or insufficiently documented. As a result, the OIG estimated that during calendar years 2003 through 2005, the State claimed $11.9 million ($6.5 million Federal share) in unallowable TCM costs. The OIG recommended that the State (1) refund to the Federal Government the $6.5 million for undocumented and unsupported claims for TCM services, (2) review TCM claims submitted subsequent to their audit period and report any necessary adjustments, and (3) ensure that future TCM services claimed under the Medicaid program are properly documented in accordance with Federal and State requirements. In written comments on their draft report, the State partly agreed and partly disagreed with the OIG’s findings. Based on additional documentation provided by the State, the OIG revised their report and recommendations to reflect that the OIG are questioning 15 sampled beneficiary-months with 36 errors. >Click here to view the full report 5. Medicare Hospice Care for Beneficiaries in Nursing Facilities: Compliance With Medicare Coverage Requirements The OIG found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet at least one Medicare coverage requirement. Medicare paid approximately $1.8 billion for these claims. More specifically, 33 percent of claims did not meet election requirements, and 63 percent did not meet plan of care requirements. For 31 percent of claims, hospices provided fewer services than outlined in beneficiaries' plans of care. In addition, 4 percent of claims did not meet certification of terminal illness requirements. The Medicare hospice benefit allows a beneficiary with a terminal illness to forgo curative treatment for the illness and instead receive palliative care, which is the relief of pain and other uncomfortable symptoms. Based on the findings in this report, OIG recommend that CMS educate hospices about the coverage requirements and their importance in ensuring quality of care. OIG also recommend that CMS provide tools and guidance to help hospices meet the coverage requirements and that it strengthen its monitoring practices regarding hospice claims. CMS concurred with all their recommendations. This report is one in a series of four OIG reports that examine the hospice benefit for nursing facility residents. It is based on data from a medical record review of a stratified random sample of hospice claims for beneficiaries in nursing facilities in 2006. >Click here to view the full report 6. Medicare Hospice Care: Services Provided to Beneficiaries Residing in Nursing Facilities The Medicare hospice benefit allows a beneficiary with a terminal illness to forgo curative treatment for the illness and instead receive palliative care, which is the relief of pain and other uncomfortable symptoms. Medicare spending on hospice care and the number of beneficiaries receiving it have increased significantly in recent years. Previous Office of Inspector General (OIG) work has raised questions about the hospice benefit for nursing facility residents. However, little subsequent research has been done to examine hospice care for these beneficiaries and almost no beneficiary-specific data exist. This memorandum report found that hospices provided nursing services to beneficiaries for 96 percent of claims, home health aide services for 73 percent of claims, and medical social services for 68 percent of claims. Drugs were provided to beneficiaries for 96 percent of claims. In addition, nursing services were provided at an average of 1.7 times per week, home health aide services at an average of 2.2 times per week, and medical social services at an average of 1.7 times per month. This memorandum report is one in a series of four reports prepared by OIG that examine the hospice benefit for nursing facility residents. It is based on data from a medical record review of a stratified random sample of hospice claims for beneficiaries in nursing facilities in 2006. The report also uses claims data for all Medicare beneficiaries who received hospice care in 2006. >Click here to view the full report 7. IHS Contract Health Services Program: Overpayments and Potential Savings IHS and tribes paid above the Medicare rate for 22 percent of hospital claims. As a result, IHS and tribes overpaid $1 million for hospital claims between January and March 2008. Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) and its implementing regulations, all Medicare-participating hospitals must accept reimbursement no greater than the Medicare rate as payment in full for patients eligible for Contract Health Services (CHS). Nonhospital providers, including physicians, are not covered by the MMA provision. If IHS and tribal payments for nonhospital claims were capped at the Medicare rate, IHS and tribes could have saved as much as $13 million between January and March 2008. Savings from claims over the Medicare rate could have paid for approximately 41,000 additional nonhospital claims between January and March 2008 that might otherwise have been deferred or denied. IHS and tribes paid above Medicare rates for 71 percent of nonhospital claims, most of which were for physician services. The OIG recommend that IHS and tribes take appropriate action regarding overpaid CHS hospital claims. IHS should also direct its fiscal intermediary to ensure that all future CHS claims are paid at or below the Medicare rate. IHS should provide technical assistance to tribes to ensure proper payments of hospital claims. Lastly, IHS should seek legislative authority to cap payments for CHS nonhospital services. IHS concurred with all four of their recommendations. >Click here to view the full report 8. Power Wheelchairs in the Medicare Program: Supplier Acquisition Costs and Services Medicare and its beneficiaries paid almost four times the average amount paid by suppliers to acquire standard power wheelchairs during the first half of 2007. Suppliers purchased standard power wheelchairs for an average of $1,048 and reported performing an average of five services in conjunction with supplying them. Because Medicare allowed an average of $4,018 for standard power wheelchairs, Medicare and its beneficiaries paid suppliers an average of $2,970 beyond the suppliers' acquisition cost to perform an average of five services and cover general supplier business costs. The beneficiary's average copayment covered 77 percent of the supplier's average acquisition cost for a standard power wheelchair. Medicare and its beneficiaries paid almost two times the average amount paid by suppliers to acquire complex rehabilitation power wheelchair packages during the first half of 2007. Suppliers purchased complex rehabilitation power wheelchair packages for an average of $5,880 and reported performing an average of seven services in conjunction with supplying them. Because Medicare allowed an average of $11,507 for complex rehabilitation power wheelchair packages, Medicare and its beneficiaries paid suppliers an average of $5,627 beyond the suppliers' acquisition cost to perform an average of seven services and cover general supplier business costs. The OIG collected documentation of the prices suppliers paid to purchase a sample of standard and complex rehabilitation power wheelchairs that Medicare beneficiaries received in the first half of 2007. The OIG also collected documentation of the services performed prior to, during, and over an average of 9 months after delivering the power wheelchairs. Medicare's average allowed amount for standard power wheelchairs in the first half of 2007 ($4,018) was 383 percent of suppliers' average acquisition cost. In comparison, Medicare's average payment under the Competitive Bidding Acquisition Program ($3,073) would have been 293 percent of suppliers' average acquisition cost. Although Medicare's fee schedule amount was reduced to $3,641 to offset the Competitive Bidding Acquisition Program's delay, the 2009 fee schedule amount exceeds the average competitively bid price by $568. Medicare's fee schedule amounts include reimbursement for the acquisition cost of the power wheelchair and also for supplier services, such as assembling and delivering the power wheelchair and educating the beneficiary about its use. The OIG found that suppliers performed most services prior to and during, rather than after, the wheelchairs' delivery. Suppliers of complex rehabilitation power wheelchair packages reported performing twice as many services as suppliers of standard power wheelchairs at times other than the day of delivery. Suppliers reported performing required services most of the time, as well as other services as needed. The OIG recommend that CMS determine whether Medicare's standard and complex rehabilitation power wheelchair fee schedule amounts should be adjusted by using information from the Competitive Bidding Acquisition Program, seeking legislation to ensure that fee schedule amounts are reasonable and responsive to market changes, or by using its inherent reasonableness authority. CMS concurred with the OIG’s recommendation and, with respect to their suggested methods for determining whether fee schedule amounts should be adjusted, stated that it plans to use information from the Competitive Bidding Acquisition Program and will carefully consider seeking legislation to ensure that fee schedule amounts are reasonable and responsive to market changes. However, CMS noted that it is not likely to use its inherent reasonableness authority until the results of the supplier bids for power wheelchairs under the Competitive Bidding Acquisition Program have been assessed. >Click here to view the full report 9. Beneficiary Utilization of Albuterol and Levalbuterol Under Medicare Part B The OIG found that utilization patterns among beneficiaries prescribed albuterol and levalbuterol fluctuated noticeably between 2003 and 2007-almost always shifting toward the drug that was most favorable for the supplier from a reimbursement perspective. In 2003 and 2004, albuterol and levalbuterol were included in the same payment code and had the same Medicare payment amount, which was based on the median average wholesale price of all versions of both drugs. Effective January 1, 2005, CMS established separate payment codes and payment amounts for these drugs. At the same time, under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Medicare reimbursement for an inhalation drug was set at 106 percent of the drug's average sales price (ASP). These changes increased the payment amount for levalbuterol but decreased the payment amount for albuterol. Effective July 1, 2007, CMS recombined albuterol and levalbuterol into a single code and began to base payment on the volume-weighted ASP for both drugs. However, as of April 1, 2008, CMS again reestablished separate payment codes and payment amounts for these two drugs. Medicare reimbursement favored albuterol in 2003 and 2004 (from a supplier's reimbursement perspective), and nearly all beneficiaries (97 percent) received that drug. However, as a result of payment and coding changes that took effect on January 1, 2005, reimbursement became much more favorable for levalbuterol. Twenty-five percent of beneficiaries who were on albuterol in 2004 were changed to levalbuterol between January 1, 2005, and June 30, 2007. Physicians in their sample typically cited clinical reasons for changing beneficiaries from albuterol to levalbuterol during this time. Despite the move to ASP, average per-beneficiary spending on albuterol and levalbuterol actually increased above pre-MMA levels. Between January 1 and June 30, 2007, Medicare paid an average of $600 per beneficiary for both albuterol and levalbuterol, or $94 more per beneficiary than in the first half of 2003. However, a July 1, 2007, payment and coding change made albuterol more favorable from a supplier's perspective; two-thirds of beneficiaries in their sample were changed from levalbuterol to albuterol between July 1 and December 31, 2007. Physicians in their sample typically cited financial reasons for changing beneficiaries from levalbuterol to albuterol in the second half of 2007. When Congress and CMS make reimbursement and coding decisions, it is important they take into consideration that new policies may affect what drug a beneficiary is prescribed and, in some cases, limit access to a potentially more effective product or drive utilization to a more expensive product that offers no clinical advantage. In its comments to the draft report, CMS stated that the agency is aware of the impact that changes in payment methodologies can have on access to prescription drugs and will continue to monitor spending and utilization for albuterol and levalbuterol. >Click here to view the full report 10. Review of the Missouri Department of Social Services Claims for Title IV-E Training Costs for the Social Services Cost Pool for July 1, 2002, Through June 30, 2006 The OIG found that none of the $10.2 million ($7.7 million Federal share) in Title IV-E (foster care and adoption assistance) training costs that Missouri allocated from its social services cost pool from July 1, 2002, through June 30, 2006, were allowable for Federal reimbursement at the enhanced 75-percent Federal financial participation rate. Of the $7.7 million Federal share, $2.6 million was unallowable because the cost pool did not consist entirely of allowable training costs reimbursable at the enhanced rate. In addition, contrary to Federal regulations, none of the costs included in the cost pool were included in the State's approved training plan. The OIG set aside an additional $3.3 million for adjudication by the Administration for Children and Families (ACF) and accepted the remaining $1.8 million. The OIG recommended that Missouri (1) adjust its next "Title IV-E Foster Care and Adoption Assistance Financial Report" to reduce Federal reimbursement claimed for Title IV-E training by $2.6 million and (2) work with ACF to determine what portion of the $3.3 million Federal share was not allocable to Title IV-E and make financial adjustments as necessary. Missouri did not agree with their findings or recommendations. Nothing in the State's comments caused the OIG to revise their report. >Click here to view the full report 11. Payments for Ambulance Transportation Provided to Beneficiaries in Skilled Nursing Stays Covered Under Medicare Part A in Calendar Year 2006 Ambulance suppliers did not always comply with consolidated billing requirements in calendar year (CY) 2006. Under the prospective payment system, some ambulance transportation provided by outside suppliers to skilled nursing facility (SNF) residents is included in the SNFs' Medicare Part A payments and is subject to consolidated billing. Of the 114 claims that OIG reviewed, 61 claims totaling $27,000 were incorrectly billed to Medicare Part B. As a result, the Medicare program paid twice for the ambulance transportation: once to the SNF under the Part A prospective payment system and again to the ambulance supplier under Part B. Based on their sample results, OIG estimated that Medicare Part B carriers made a total of $12.7 million in potential overpayments to ambulance suppliers for transportation provided to beneficiaries in Part A SNF stays in CY 2006. The OIG recommended that CMS instruct its carriers to recover the $27,000 in overpayments for the 61 incorrectly billed claims that OIG identified and review the 97,799 claims that OIG did not review, which represent $12.7 million in potential Part B overpayments; provide additional guidance for suppliers and SNFs on its Web site and instruct its carriers and fiscal intermediaries to provide guidance to suppliers and SNFs to ensure compliance with consolidated billing requirements; and either establish additional edits in its Common Working File to prevent and detect Part B overpayments for ambulance transportation or instruct its carriers to develop a post-payment data match and recover any identified overpayments. CMS concurred with their recommendations. >Click here to view the full report back to top |
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