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Feeley & Driscoll's OIG Update: January 2011 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.
1. Review of Massachusetts General Hospital Claims for Outpatient Procedures that Included the Replacement of Medical Devices for Calendar Years 2007 and 2008The Hospital did not fully comply with Medicare requirements for obtaining credits available from manufacturers for replaced medical devices and for reporting the appropriate modifier and charges to reflect the credits received. The Hospital was overpaid $63,000 and beneficiaries incurred $6,000 in additional copayment costs. > Click here to view the full report 2. Pharmaceutical Companies to Pay $214.5 Million to Resolve Allegations of Off-Label Promotion of Epilepsy DrugThe Justice Department announced that the Irish pharmaceutical manufacturer Elan Corporation, PLC (Elan) and its U.S. subsidiary, Elan Pharmaceuticals, Inc. (EPI) have agreed to pay over $203.5 million to resolve criminal and civil liability arising from the illegal promotion of the epilepsy drug Zonegran. In a separate civil settlement, Japanese drug marketer Eisai, Inc. which purchased the drug from Elan has already paid $11 million to resolve civil liability for off-label marketing of Zonegran. > Click here to view the full report 3. Review of Yale New Haven Hospital Claims for Outpatient Procedures that Included the Replacement of Medical Devices for Calendar years 2007 and 2008The Hospital did not fully comply with Medicare requirements for obtaining credits available from manufacturers for replaced medical devices and for reporting the appropriate modifier and charges to reflect the credits received. The Hospital was overpaid $27,000 and beneficiaries incurred $1,800 in additional copayment costs. > Click here to view the full report 4. Review of Ryan White Title II Funding in PennsylvaniaPennsylvania did not always comply with Federal requirements in administering funds provided under Title II of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act of 1990. From April 1, 2004, through March 31, 2007, Pennsylvania claimed at least $3.2 million ($2.2 million Federal share) that did not comply with the Title II requirements that funds be used only for eligible clients and only for drugs that are not eligible for coverage by other Federal, State, or private health insurance plans. The $3.2 million consisted of at least $2.7 million ($1.8 million Federal share) in estimated unallowable payments based on their sample of payments made for clients under the age of 65 and $542,000 ($364,000 Federal share) for payments made for clients aged 65 or older. Title II grants fund the purchase of medications through the AIDS Drug Assistance Program (ADAP) and other health care and support services for people who have HIV/AIDS and who have no health insurance or are underinsured. At the Federal level, the Health Resources and Services Administration administer the CARE Act. The OIG recommends that Pennsylvania:
The State generally agreed with the OIG’s findings and outlined its actions to address their recommendations. > Click here to view the full report 5. Results of Limited Scope Review at Community Action of Greater Indianapolis, Inc.Based on the OIG’s assessment, the Grantee's financial viability improved over the time of the OIG’s audit period. The Grantee has the ability to manage and account for Federal funds and is capable of operating a Community Services Block Grant (CSBG) program in accordance with Federal regulations. However, during their review the OIG noted weaknesses related to fiscal status, composition of the Board of Directors, safeguarding of Federal funds, and a lack of written policies and procedures for Recovery Act reporting and segregation of duties. In determining whether the Grantee is appropriately managing and accounting for the Recovery Act grant funding, the OIG recommends that the Administration for Children and Families consider the information presented in this report in assessing the Grantee's ability to operate the CSBG program in accordance with Federal regulations and work with the State to address the noted weaknesses. > Click here to view the full report 6. Pharmaceutical Manufacturers to Pay $421.2 Million to Settle False Claims Act CasesAbbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc. n/k/a Boehringer Ingelheim Roxane Inc. and affiliated entities have agreed to pay $421 million to settle False Claims Act allegations, the Justice Department announced today. These settlements resolve claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products knowing that federal healthcare programs relied on those reported prices to set payment rates. The actual sales prices for the products were far less than what defendants reported. > Click here to view the full report 7. Kos Pharmaceuticals to Pay More Than $41 Million to Resolve Kickback and Off-Label Promotion AllegationsKos Pharmaceuticals, a subsidiary of Abbott Laboratories, has agreed to pay more than $41 million to resolve criminal and civil liability arising from conduct relating to its drugs Advisor and Niaspan, the Justice Department announced today. According to the agreement reached with the government, the Delaware-based company will pay more than $38 million to settle civil allegations under the False Claims Act. Specifically, the civil settlement resolves allegations that Kos offered and paid doctors, other medical professionals, physician groups, and managed care organizations, illegal kickbacks in the form of money, free travel, grants, honoraria, and other valuable goods and services, in violation of the Anti-Kickback Statute to get them to prescribe or recommend Niaspan and Advicor. > Click here to view the full report 8. Pharmaceutical Manufacturer to Pay $280 Million to Settle False Claims Act CaseDey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.) and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations, the Department of Justice announced today. This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal health care programs relied on those reported prices to set payment rates. The actual sales prices for the Dey products were far less than what Dey reported. > Click here to view the full report 9. Questionable Billing by Skilled Nursing FacilitiesSkilled nursing facilities (SNF) categorize beneficiaries into resource utilization groups (RUG) based on their care and resource needs. Medicare generally pays the most for ultra high therapy RUGs. Medicare also pays more for RUGs for beneficiaries who require more assistance with certain activities of daily living, such as eating. The OIG found that SNFs increasingly billed Medicare for higher paying RUGs from 2006 to 2008, even though beneficiary characteristics remained largely unchanged. Specifically, the OIG found large increases in RUGs for ultra high therapy, with payments to SNFs for ultra high therapy increasing by nearly 90 percent from 2006 to 2008, rising from $5.7 billion to $10.7 billion. In addition, RUGs for high levels of assistance with daily activities increased. The OIG also found that for-profit SNFs were far more likely than nonprofit or government SNFs to bill for higher paying RUGs, and that a number of SNFs had questionable billing in 2008. Taken together, these findings raise concerns about the potentially inappropriate use of higher paying RUGs, particularly those for ultra high therapy. The OIG recommends that CMS:
CMS concurred with three of the four recommendations. It did not concur with the recommendation to change the current method for determining how much therapy is needed, but stated that it is committed to pursuing additional improvements to the SNF payment system. > Click here to view the full report 10. Results of Limited Scope Review at Nye County Health & Human ServicesBased on the OIG's assessment, Nye County Health & Human Services (county agency) is financially viable, has the capacity to manage and account for Federal funds, and is capable of operating its Community Services Block Grant (CSBG) program in accordance with Federal regulations. However, the OIG noted a weakness related to the composition of the board of directors. The CSBG program provides funds to alleviate the causes and conditions of poverty in communities. The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided additional funding for the program. The OIG recommends that the Administration for Children and Families consider the information presented in this report in assessing the county agency's ability to operate its CSBG program in accordance with Federal regulations and in determining whether the county agency is appropriately managing and accounting for Recovery Act funds. > Click here to view the full report 11. Questionable Billing for Brand-Name Inhalation Drugs in South FloridaThe OIG found that Medicare paid South Florida suppliers for up to 10 times more units of arformoterol than the drug's manufacturer and the 3 largest wholesalers distributed for sale in the area in 2008 and the first half of 2009. Furthermore, the $62 million billed by South Florida suppliers for arformoterol during this period far exceeds the total possible sales in the area. Medicare Part B covers inhalation drugs when they are used in conjunction with durable medical equipment (DME). Beneficiaries typically obtain DME items, including inhalation drugs, through suppliers, which then submit claims to Medicare. A CMS contractor established coverage guidelines for nebulizers and related inhalation drugs using a local coverage determination (LCD). Through this LCD, a utilization edit was implemented to detect and deny excessive claims for the brand-name inhalation drug budesonide in September 2008. The OIG identified all claims in 2008 and the first half of 2009 for budesonide and the newer brand-name inhalation drug arformoterol. For both drugs, the OIG analyzed claims data to identify the edit's impact on billing and payment for budesonide and to determine whether utilization shifted to arformoterol after the edit took effect. The OIG also obtained sales data from arformoterol's manufacturer for the same period. The OIG used the sales data to compare the total number of units of arformoterol sold to South Florida suppliers by the manufacturer and the three largest wholesalers to the number of units paid based on the Medicare claims files. The OIG found that after the edit was implemented for budesonide, Medicare payments for the drug to South Florida suppliers were reduced by almost half. In fact, nearly 30 percent of suppliers that had billed for budesonide in the 6 months before the edit completely stopped billing for budesonide in the 6 months after the edit. However, these expenditure decreases were offset by increases in expenditures for arformoterol. Medicare payments for arformoterol to South Florida suppliers more than doubled after the budesonide edit was implemented. Based on sales data for arformoterol's manufacturer and the three largest wholesalers, it does not appear that these suppliers purchased enough of the drug to justify these payments. In 2008 and the first half of 2009, Medicare paid for 7 million units of arformoterol, even though only 750,000 units were sold to South Florida suppliers by the manufacturer and the 3 largest wholesalers. The OIG recommends that CMS:
In its comments on the draft report, CMS concurred with all four of the OIG recommendations (however, the concurrence with their first recommendation included the caveat that certain procedures, such as developing and issuing an LCD, would need to be followed before implementing these edits). > Click here to view the full report 12. Results of Limited Scope Review at Broward County Community Action AgencyBased on the OIG’s assessment, the Broward County (FL) Community Action Agency (the Agency) was financially viable. In addition, the Agency had the capacity to manage and account for Federal funds and the capability to operate the Community Service Block Grant (CSBG) program in accordance with Federal regulations. However, the Agency had weaknesses with its time and effort certification and labor distribution systems. Also, the Agency had problems fully expending the CSBG/Recovery Act funds. > Click here to view the full report 13. Review of Kansas's Compliance with the Federal Prompt Payment RequirementsThe Kansas Health Policy Authority (State agency) complied with the prompt pay requirement, as specified in the Social Security Act and implementing regulations, for receiving the Federal medical assistance percentage for claims paid on each day of the 3-month period July 1, 2009, through September 30, 2009. Specifically, the State agency paid 99 percent of the 5,376,631 claims whose associated expenditures had been claimed for Federal reimbursement within 30 days of the date of receipt. This report has no recommendations. |
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