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Feeley & Driscoll's OIG Update: July 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 Administrative Costs Claimed by Pennsylvania's Home and Community-Based Waiver for Individuals Aged 60 and Over The OIG’s review found that Pennsylvania's Department of Public Welfare (State agency) did not comply with Federal requirements when it claimed Medicaid administrative costs under the Home and Community-Based Services Waiver for Individuals Aged 60 and Over (Aging Waiver). The State agency claimed $4.2 million ($2.1 million Federal share) in administrative costs for non-Aging Waiver activities and $495,000 ($371,000 Federal share) because of an adjustment error. The Aging Waiver authorizes services for Medicaid beneficiaries aged 60 or older who are economically distressed and are clinically eligible for care in a skilled nursing facility. Because the State agency (1) did not amend its cost allocation plan to identify the administrative costs associated with the Aging Waiver program and non-Aging Waiver activities or submit a methodology for allocating them and (2) did not ensure that all costs claimed under the Aging Waiver were accurate, the State agency claimed unallowable costs. The OIG also set aside for CMS's adjudication $51.3 million ($25.8 million Federal share) in local agencies' administrative costs for Aging Waiver activities. The State agency identified the administrative activities in the Aging Waiver but did not amend the cost allocation plan or submit a methodology for allocating the associated costs. The OIG recommends that the State agency:
The State agency generally did not agree with the OIG’s recommendations. After reviewing the State agency's comments, the OIG made changes to their report and revised their recommendations. >Click here to view the full report 2. Medicare Compliance Review of Cape Cod Hospital for Calendar Years 2008 and 2009 Cape Cod Hospital (the Hospital) complied with Medicare billing requirements for 178 of the 382 claims the OIG reviewed. However, the Hospital did not fully comply with Medicare billing requirements for selected inpatient and outpatient claims in other areas. Specifically, of 382 sampled claims, 204 claims had errors in overpayments totaling $379,000 for calendar years 2008 and 2009. Overpayments occurred primarily because the Hospital did not have adequate controls to prevent incorrect billing of Medicare claims and did not fully understand Medicare billing requirements. >Click here to view the full report 3. Replacing Average Wholesale Price: Medicaid Drug Payment Policy Of the 45 States that used average wholesale price (AWP) to set reimbursement for prescription drugs in the first quarter of 2011, 20 States did not have definitive plans for prescription drug reimbursement after First DataBank stops publishing AWPs in September 2011. Federal regulations require that Medicaid reimbursement amounts for prescription drugs not exceed the lower of (1) the estimated acquisition cost plus a dispensing fee or (2) the provider's usual and customary charge to the public for the drug. CMS allows States flexibility in determining the estimated acquisition cost. Most States estimated the acquisition cost based on AWP; many of these States obtained AWP data from the pricing compendium published by First DataBank. Following a lawsuit, First DataBank decided to stop publishing AWPs no later than September 26, 2011. The OIG sent surveys that asked States to describe how they intend to set reimbursement after First DataBank stops publishing AWPs and to describe the role they would prefer CMS play in developing Medicaid reimbursement methodologies. The OIG also interviewed CMS staff to determine whether the agency had provided guidance to all States regarding recent AWP issues. >Click here to view the full report 4. Medicare Hospices that Focus on Nursing Facility Residents Medicare spending on hospice care for nursing facility residents has grown nearly 70 percent since 2005. Additionally, hundreds of hospices had a high percentage of their beneficiaries residing in nursing facilities, and most of these hospices were for-profit. Compared to hospices nationwide, these high-percentage hospices received more Medicare payments and served beneficiaries who spent more time in care. High percentage hospices typically enrolled beneficiaries whose diagnoses required less complex care and who already lived in nursing facilities before they elected hospice care. Medicare currently pays hospices the same rate for care provided in nursing facilities as it does for care provided in other settings, such as private homes. Unlike private homes, nursing facilities are staffed with professional caregivers and are often paid by third party payers, such as Medicaid. These facilities are required to provide personal care services, which are similar to hospice aide services that are paid for under the hospice benefit. Some hospices may be seeking beneficiaries with particular characteristics, including those with conditions associated with longer but less complex care. Such beneficiaries are often found in nursing facilities. By serving these beneficiaries for longer periods, the hospices receive more Medicare payments, which can contribute to larger profits. The OIG recommends that CMS:
CMS concurred with both of the OIG’s recommendations. The OIG also agreed that the current payment structure may provide incentives for hospices to seek out beneficiaries in nursing facilities, who often receive longer but less complex care. >Click here to view the full report 5. Most Power Wheelchairs in the Medicare Program did not Meet Medical Necessity Guidelines The OIG found that 61 percent of power wheelchairs provided to Medicare beneficiaries in the first half of 2007 were medically unnecessary or had claims that lacked sufficient documentation to determine medical necessity. These power wheelchairs accounted for $95 million of the $189 million that Medicare allowed for power wheelchairs during this period. Medicare beneficiaries are eligible to receive power wheelchairs under Medicare Part B coverage of durable medical equipment (DME). Beneficiaries who are prescribed power wheelchairs receive them from suppliers, which bill Medicare for reimbursement. The OIG conducted a medical record review of a random sample of 375 claims for standard and complex rehabilitation power wheelchairs supplied to beneficiaries in the first half of 2007. Reviewers determined whether each claim was for a power wheelchair that was medically necessary and whether the claim was supported by sufficient documentation to determine medical necessity based on suppliers' records. The OIG also reviewed records from prescribing physicians. For claims without errors based on suppliers' records, reviewers determined whether prescribing physicians' records supported suppliers' claims. >Click here to view the full report 6. Payments for Medicare Part B Services during Non-Part A Nursing Home Stays in 2008 The OIG found that Medicare paid $4.9 billion in 2008 for Part B services during nursing home stays not paid for by Part A (hereinafter referred to as non-Part A stays). Three service categories, therapy services, evaluation and management, and major and minor medical procedures, made up 58 percent of the total payment. On average, Medicare paid $16.75 per day per beneficiary for Part B services across all service categories and beneficiaries. The service category of dialysis services and the State of Louisiana exhibited the highest average daily payments. This study is part of OIG's activities to monitor Part B payments for items and services furnished to nursing home residents during non-Part A stays. The OIG used resident assessment data from the Minimum Data Set to identify nursing home stays nationwide during 2008 and reviewed Part B claims that occurred during non-Part A stays. This report provides insights into payment and utilization patterns for Part B services, as well as geographic differences, that will guide further review and identification of providers of Part B services warranting scrutiny by OIG and CMS. >Click here to view the full report 7. Early Review of States' Planned Medicaid Electronic Health Record Incentive Program Oversight The OIG found that all 13 State Medicaid agencies in their study plan to verify at least half of the eligibility requirements for health care practitioners and hospitals prior to making Medicaid electronic health record (EHR) incentive payments, and that all also plan to audit eligibility requirements after payment. The OIG also found that data availability limits both the number of eligibility requirements that State Medicaid agencies plan to verify prior to payment and the completeness of those verifications. The Health Information Technology for Economic and Clinical Health Act, enacted as part of the American Recovery and Reinvestment Act, established Medicaid EHR incentive programs to promote adoption of EHRs. State Medicaid agencies administer their own Medicaid EHR incentive programs and are responsible for overseeing their integrity. Specifically, State Medicaid agencies must have an oversight plan that includes checking that health care practitioners and hospitals meet program eligibility requirements. State Medicaid agencies' oversight plans may include verifying self reported information for eligibility requirements prior to payment or auditing self reported information after payment. >Click here to view the full report 8. Review of Florida's Children's Health Insurance Program Experience Adjustment and Refund Submission Reports The OIG’s review found that the Florida Agency for Health Care Administration (State agency) recouped approximately $10.8 million in State Children's Health Insurance Program (SCHIP) refunds due from 22 experience adjustment reports that insurers submitted during the OIG audit period (October 2003 through September 2007). However, 13 experience adjustment reports incorrectly reported premium payments from Florida Healthy Kids Corporation (FHKC). As a result, FHKC did not receive appropriate refunds, and the Federal Government was not credited with refunds totaling $3.1 million ($2 million Federal share). The State agency operates SCHIP in Florida and contracts with FHKC to provide health insurance to families not eligible for Medicaid. During the OIG audit period, FHKC entered into 27 multiyear medical service agreements with 11 insurers to provide comprehensive health care services to eligible SCHIP participants in exchange for per member, per month capitated payments. Insurers must file an annual experience adjustment report in which they calculate whether they have spent a minimum of 85 percent of total premiums on medical services and determine the appropriate refund, if any. The OIG recommends that the State agency:
The State agency concurred with the OIG’s recommendations. >Click here to view the full report 9. OIG Chief Counsel Lewis Morris Testifies on the Role of New Technology in Fighting Health Care Fraud On Tuesday, July 12, 2011, Lewis Morris, Chief Counsel to the Inspector General of the U.S. Department of Health & Human Services testified before the United States Senate Committee on Homeland Security & Governmental Affairs, Subcommittee on Federal Financial Management, Government Information, Federal Services, and International Security about the role new technologies can play in cutting waste and fraud in the Federal health care programs. >Click here to view the full report 10. Medicaid Services Provided in an Adult Day Health Setting Beneficiaries received at least one health service on 60 percent of service days. The OIG found that meals and/or snacks were the only documented services for Medicaid beneficiaries on 34 percent of service days in an adult day health setting. The OIG also found that approximately 43 percent of therapy services were provided by staff who lacked required supervision. Finally, although documentation associated with most service days included timely assessments, in some cases documentation lacked appropriate physician orders or was inconsistent with plans of care. The OIG recommends that CMS:
In its written comments on the OIG draft report, CMS concurred with all of the OIG’s recommendations and outlined the steps it will take to implement them. >Click here to view the full report
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