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Feeley & Driscoll's OIG Update: November 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 additions from the OIG's website. This update is a monthly publication from the Healthcare Group at Feeley & Driscoll, P.C. Contents
1. Review of Medicaid Administrative Costs Claimed by New Jersey for State Fiscal Year 2007 The State agency's Medicaid Administrative Claim (MAC) did not comply with Federal requirements. Specifically, the State agency's contractor, Maximus, Inc. (Maximus), included unallowable costs in the cost pool used to compute the MAC, resulting in a claim for $10 million ($5 million Federal share) in excess Medicaid administrative costs. In addition, Maximus (1) performed a random moment timestudy (RMTS) that deviated from acceptable statistical sampling practices and (2) applied Medicaid eligibility rates that were not documented by the State agency. The OIG was unable to quantify the effect of these errors; however, they impacted the accuracy of the Medicaid administrative costs claimed by the State agency and the validity of the RMTS used to allocate these costs. Therefore, the OIG was unable to express an opinion on the allowability of the remaining $15.9 million ($8 million Federal share) claimed on the State agency's MAC. The OIG recommends that the State agency:
The State agency generally disagreed with the OIG’s recommendations. >Click here to view the full report 2. Review of 83 Early Head Start Applicants under the American Recovery and Reinvestment Act The OIG tested whether applicants for Early Head Start Recovery Act expansion funding had (1) the financial resources necessary to meet operational costs and pay liabilities; (2) accounting systems to track all cash drawdowns separately and provide accurate, current, and complete reports of grant expenditures; and (3) written procedures for financial management, including budget and cost-accounting practices. Of the 83 applicants that the OIG assessed, 8 had no reported audit deficiencies. For the remaining 75, the OIG’s reviews identified (1) problems with financial stability, (2) inadequate systems to manage and account for Federal funds, (3) inadequate organizational structures, (4) inadequate procurement and property management procedures, and (5) inadequate personnel policies and procedures. Using the OIG’s findings, ACF awarded $15 million in Recovery Act funds to 8 applicants; did not award $31 million requested by 15 applicants; and awarded $126 million to 60 applicants on the condition that they receive increased ACF oversight, training, and technical assistance. >Click here to view the full report 3. Review of Medicare Payments Exceeding Charges for Outpatient Services Processed by Noridian Administrative Services LLC, in Jurisdiction 6-Minnesota for the Period January 1, 2006, through June 30, 2009 The OIG’s audit found that 367 of the 520 selected line items for which Noridian Administrative Services, LLC (Noridian), made Medicare payments to providers for outpatient services for the period January 2006 through June 2009 were incorrect. The line items included overpayments totaling approximately $3.6 million, which the providers had not refunded by the beginning of the OIG’s audit. Providers refunded overpayments on 94 line items totaling approximately $2.6 million before the OIG’s fieldwork. The remaining 59 line items were correct. Medicare uses an outpatient prospective payment system to pay certain outpatient providers. In this method of reimbursement, the Medicare payment is not based on the amount that the provider charges. Billed charges generally exceed the amount that Medicare pays the provider. Therefore, a Medicare payment that significantly exceeds the billed charges is likely to be an overpayment. The deficiencies in the 367 incorrect line items included:
The OIG recommends that Noridian:
Noridian concurred with the OIG’s recommendations and described corrective actions that it had taken or planned to take. >Click here to view the full report 4. Review of Outpatient Claims Processed by Noridian Administrative Services that Included Procedures for the Insertion of Multiple Units of the Same Type of Medical Device in Calendar Years 2008 and 2009 Of the 28 claims that the OIG reviewed, Medicare paid 21 correctly for outpatient claims processed by Noridian Administrative Services, LLC (Noridian), which included procedures for the insertion of multiple units of the same type of medical device. However, for the remaining seven claims, Noridian made overpayments to hospitals totaling approximately $39,000. Incorrect payments occurred because hospitals had inadequate controls to ensure that they billed accurately for claims that included the insertion of medical devices. In addition, Medicare payment controls in the Fiscal Intermediary Shared System were not always adequate to prevent or detect incorrect payments. >Click here to view the full report 5. Adverse Events in Hospitals: Medicare’s Responses to Alleged Serious Events The OIG found that Medicare's system of hospital oversight missed opportunities to address patient safety in its response to alleged serious adverse events, such as medication and surgical errors, physical abuse by hospital staff, and patient suicide. In response to the Tax Relief and Health Care Act of 2006, the OIG released a series of reports regarding adverse events. In those reports, the OIG estimated that over one-quarter of hospitalized Medicare beneficiaries were harmed during their hospital stays in October 2008. This report examines Medicare's responses to alleged serious adverse events. These responses represent important patient safety opportunities, yet little attention has been paid to their role in improving patient safety. Hospitals must meet the Medicare Conditions of Participation (CoP) to participate in Medicare. On behalf of Medicare, State survey and certification agencies (State agencies) investigate complaints alleging hospital noncompliance with the CoP on behalf of Medicare. Immediate Jeopardy (IJ) complaints are the most serious and may allege adverse events. Also, hospitals often conduct their own investigations of adverse events independently of investigations by State agencies. Because no national database of adverse events exists, this report uses a random sample of IJ complaints as a proxy for alleged serious adverse events to which Medicare responded. To review the complaints, the OIG used data from CMS, State agencies, hospital accreditors, and the hospitals associated with the complaints. State agency responses to complaints alleging serious adverse events were generally timely and often found problems. However, State agencies and CMS often failed to review hospitals' compliance with the CoP on quality assessment and performance improvement (QAPI) and the CoP on the hospital's governing body; performed little longer term monitoring to verify that hospitals' corrective actions resulted in sustained improvements; and sometimes failed to disclose the nature of the complaints to the hospitals, thereby limiting hospitals' ability to learn from alleged events. Furthermore, contrary to its policy, CMS informed the Joint Commission of few complaints, impeding the Joint Commission's oversight of its accredited hospitals. The OIG also found that hospitals investigated most alleged adverse events in the OIG’s sample and that they found State agency responses valuable but disruptive. Hospital corrective actions resulted largely in training coupled with policy and process changes. The OIG recommends that CMS:
CMS concurred with the OIG’s recommendations. >Click here to view the full report 6. Appropriations Funding for National Institute of Allergy and Infectious Diseases Contract HHSN272-2008-00013C with the EMMES Corporation The OIG’s review found that during fiscal years 2008 and 2009, NIH's National Institute of Allergy and Infectious Diseases (NIAID) did not comply with the time and amount requirements specified in appropriations statutes in administering contract HHSN272-2008-00013C (the Contract) with The EMMES Corporation. An agency may obligate appropriations for goods and services when (1) the purpose of the obligation or expenditure is authorized, (2) the obligation occurs within the time limits for which the appropriation is available, and (3) the obligation and expenditure are within the amounts provided by Congress. Federal statutes specify that a fiscal year appropriation may be obligated only to meet a legitimate, or bona fide, need arising in or continuing to exist in the appropriation's period of availability. The Antideficiency Act prohibits an agency from obligating or expending funds in advance of or in excess of an appropriation unless specifically authorized by law. NIAID violated both the bona fide needs rule and the Antideficiency Act by obligating funds in advance of an appropriation. The initial contract action obligated fiscal year 2008 funds for a period of approximately 14 months (March 1, 2008, through April 30, 2009). Subsequent modifications obligated fiscal year 2008 and 2009 funds through May 31, 2011. Because the Contract was for severable services, NIAID should have obligated only those fiscal year 2008 funds needed for program year 1 and only those fiscal year 2009 funds needed for program year 2. The OIG recommends that NIAID:
NIH concurred with the findings and agreed that the Contract is severable and should have been funded with the appropriation that was current when the services were performed. NIH did not address the OIG’s recommendations to correct the improper funding for the first 2 program years of the Contract. Until NIH makes these adjustments, HHS cannot report the correct amount of its Antideficiency Act violation. Therefore, the OIG continues to recommend that NIH record the correct Contract obligations and expenditures against the correct fiscal year funds. >Click here to view the full report 7. Review of the Quarterly Medicaid Statement of Expenditures for the Medical Assistance Program in Nebraska For the quarter ended March 31, 2009, the majority of the Medicaid costs that the Nebraska Department of Health & Human Services (State agency) claimed, which totaled approximately $413 million (approximately $273 million Federal share), was adequately supported by actual recorded expenditures. However, the State agency allocated inpatient hospital services as family planning services, which received a 90-percent enhanced rate (enhanced rate) of Federal reimbursement, through an allocation methodology which State agency officials could not explain and for which State agency officials could provide neither supporting documentation nor evidence that the Centers for Medicare & Medicaid Services had approved that methodology. For the quarter ended March 31, 2009, the State agency received $44,000 in Federal reimbursement for family planning services at the enhanced rate, and the OIG was unable to determine what portion of this amount was allowable. The OIG also identified several weaknesses in the procedures used by the State agency to calculate and claim Medicaid costs. >Click here to view the full report 8. Review of Cleveland Clinic’s Claims for Procedures that Included the Replacement of Medical Devices during 2008 and 2009 The Cleveland Clinic did not fully comply with Medicare requirements for obtaining credits available from manufacturers and for reporting the appropriate billing codes and charges to reflect the credits it received. The Clinic was overpaid $254,000 ($185,000 outpatient and $69,000 inpatient), and beneficiaries incurred $6,000 in additional copayment costs. >Click here to view the full report 9. Review of Outpatient Claims Processed by National Government Services, Inc., that Included Procedures for the Insertion of Multiple Units of the Same Type of Medical Device in Calendar Years 2008 and 2009 Of the 101 claims that the OIG reviewed, Medicare paid 58 correctly for outpatient claims processed by National Government Services, Inc. (NGS), which included procedures for the insertion of multiple units of the same type of medical device. However, for the remaining 43 claims, NGS made overpayments to hospitals totaling approximately $175,000. Incorrect payments occurred because hospitals had inadequate controls to ensure that they billed accurately for claims that included the insertion of medical devices. In addition, Medicare payment controls in the Fiscal Intermediary Shared System were not always adequate to prevent or detect incorrect payments. >Click here to view the full report Share this Article
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