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Feeley & Driscoll's OIG Update: January 2012 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 Costs Mobile Community Action, Inc., Allocated to Head Start Grant No. 04CH3465 Mobile Community Action, Inc. (MCA), over claimed indirect costs charged to its Head Start grants by $148,000 during the period September 1, 2008, through August 31, 2010. In addition, MCA incorrectly reported Head Start expenses and indirect costs on its Federal Financial Status Reports (SF-269) for 2009 and 2010, made employee incentive payments that were not always approved by the Board of Directors or were not supported by adequate documentation, and drew Head Start funds without always documenting the basis for the drawdowns. Under the American Recovery and Reinvestment Act of 2009, P.L. No. 111-5 (Recovery Act), enacted February 17, 2009, ACF received $3.15 billion including nearly $354 million to help improve staff compensation and training, upgrade Head Start centers and classrooms, increase hours of operation, and enhance transportation services. Also, $356 million was allocated to award all Head Start grantees a nearly 5 percent cost-of-living increase and to bolster training and technical assistance activities. >Click here to view the full report 2. Comparison of Second-Quarter 2011 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2011 The OIG must notify the Secretary of Health and Human Services if the average sales price (ASP) for a particular drug exceeds the drug's average manufacturer price (AMP) by a threshold of 5 percent. If that threshold is met, the Secretary may disregard the ASP for the drug when setting reimbursement and shall substitute the payment amount with the lesser of either the widely available market price or 103 percent of the AMP. This is the OIG's 25th report comparing ASPs to AMPs. The OIG has consistently recommended that CMS develop a price substitution policy and subsequently lower reimbursement for drugs that exceed the 5-percent threshold. Although CMS has yet to make any changes to Part B drug reimbursement as a result of these studies, the agency published a final rule in November 2011 that specifies the circumstances under which AMP-based price substitutions will occur, effective January 2012. The OIG identified drug codes that exceeded the 5-percent threshold in the second quarter of 2011 based on either complete or partial AMP data and estimated the financial impact of lowering reimbursement amounts for those drugs. The OIG also identified drug codes that were removed from the OIG's pricing comparison because they did not have AMP data. In the second quarter of 2011, ASPs for 40 drug codes exceeded AMPs by at least 5 percent. Of these, 26 had complete AMP data. If reimbursement amounts for all 26 codes had been based on 103 percent of the AMPs in the fourth quarter of 2011, Medicare would have saved an estimated $15.8 million in that quarter. Under CMS's price substitution policy, reimbursement amounts for 7 of the 26 drugs would have been reduced, saving an estimated $696,000 in that quarter. The remaining 14 of 40 drug codes also met the 5-percent threshold in the second quarter of 2011; however, these 14 codes did not have AMP data for every drug product that CMS used when calculating reimbursement. Although CMS's price substitution policy would not apply to codes with partial AMP data, price reductions may be legitimately warranted for half of the 14 codes because missing AMPs likely had little influence on the pricing comparison results. The OIG could not compare ASPs and AMPs for another 49 drug codes because AMP data were not submitted for any of the drug products that CMS used to calculate reimbursement. >Click here to view the full report 3. Hospital Incident Reporting Systems Do Not Capture Most Patient Harm Hospital incident reporting systems captured only an estimated 14 percent of the patient harm events experienced by Medicare beneficiaries. Hospitals investigated those reported events that they considered most likely to lead to quality and safety improvements and made few policy or practice changes as a result of reported events. Hospital administrators classified the remaining events (86 percent) as either events that staff did not perceive as reportable (61 percent) or as events that staff commonly report but did not report in this case (25 percent). As a condition of participation in the Medicare program, Federal regulations require that hospitals develop and maintain a Quality Assessment and Performance Improvement (QAPI) program. To satisfy QAPI requirements, hospitals must "track medical errors and adverse patient events, analyze their causes, and implement preventive actions and mechanisms that include feedback and learning throughout the hospital." To standardize hospital event reporting, AHRQ developed a set of event definitions and incident reporting tools known as the Common Formats. The OIG requested and reviewed incident reports from hospitals regarding patient harm events. The OIG had previously identified these events from a nationally representative sample of Medicare beneficiaries discharged in October 2008. All of the hospitals the OIG reviewed had incident reporting systems designed to capture events; hospital administrators the OIG interviewed indicated that they rely heavily on the systems to identify problems. Hospital accreditors reported that they do not investigate event collection methods, such as incident reporting systems, unless evidence of a problem emerges through the survey process. Because hospitals rely on incident reporting systems to track and analyze events, improving the usefulness of these systems is critical to hospitals' efforts to improve patient safety. The OIG recommends that AHRQ and CMS collaborate to create and promote a list of potentially reportable events for hospitals to use. The OIG further recommends that CMS provide guidance to accreditors regarding their assessments of hospital efforts to track and analyze events. CMS should also suggest that surveyors evaluate the information collected by hospitals using AHRQ's Common Formats. Additionally, CMS should scrutinize survey standards for assessing hospital compliance with the requirement to track and analyze events and reinforce assessment of incident reporting systems as a key tool to improve event tracking. >Click here to view the full report 4. Comparison of Average Sales Prices to Widely Available Market Prices for Selected Drugs Federal law requires the OIG to conduct studies that compare average sales prices (ASP) to widely available market prices (WAMP) and average manufacturer prices (AMP). If the OIG finds that the ASP of a drug exceeds either the WAMP or AMP by a certain threshold (currently 5 percent), the Secretary of Health and Human Services may disregard the ASP for the drug when setting reimbursement amounts. Since the implementation of the ASP reimbursement methodology, the OIG has issued 27 reports comparing ASPs to WAMPs and AMPs (2 comparing ASPs to WAMPs, 25 comparing ASPs to AMPs). The purpose of this review was to compare ASPs to WAMPs for 14 drugs that have been identified in previous OIG reports as repeatedly exceeding the 5-percent ASP-AMP threshold. The OIG requested sales data (including discounts and rebates) from each manufacturer and distributor of the 14 drugs under review for third-quarter 2009, fourth-quarter 2009, and first-quarter 2010. The OIG calculated the volume-weighted WAMP for each of the 14 drugs in each of the three quarters and compared these figures to the volume-weighted ASPs obtained from CMS. >Click here to view the full report 5. Review of Medicare Acute Care Inpatient Same-Day Readmissions at University of Pittsburgh Medical Center Presbyterian Shadyside Hospital The University of Pittsburgh Medical Center Presbyterian Shadyside Hospital (Presbyterian Shadyside) did not always bill same-day readmissions in accordance with Federal requirements. For 7 of the 27 same-day readmissions in the OIG's review, Presbyterian Shadyside incorrectly billed the second admission as a separate inpatient stay instead of a continuous stay based on the first admission, resulting in $27,000 in overpayments. These overpayments occurred because Presbyterian Shadyside did not have adequate training to review same-day readmissions and prevent incorrect billings. >Click here to view the full report 6. Review of Medicaid Personal Care Claims Submitted by Providers in New Jersey The OIG estimated that the State improperly claimed $145.4 million in Federal Medicaid reimbursement for personal care services during the OIG's 2004 through 2007 audit period. Of the 100 claims in the OIG's random sample, 36 did not comply with Federal and State requirements. Some claims contained more than one deficiency. Deficiencies included no prior authorization, no inservice education for the personal care assistant, no nursing supervision, no documentation of services, no nursing assessment, no certification of the personal care assistant by the New Jersey Board of Nursing, no plan of care, and no physician's authorization. These deficiencies occurred because the State did not effectively monitor the personal care services program for compliance with certain Federal and State requirements. The OIG recommends that New Jersey:
New Jersey generally disagreed with the OIG's recommendations. >Click here to view the full report 7. Nationwide Program for National and State Background Checks for Long-Term-Care Employees − Results of Long-Term-Care Provider Administrator Survey The Patient Protection and Affordable Care Act mandates that the OIG submit a report to Congress evaluating the Nationwide Program for National and State Background Checks on Direct Patient Access Employees of Long Term-Care Facilities and Providers not later than 180 days after the program's completion. This memorandum report provides the results of a survey of long-term-care provider administrators. The purpose of the survey was to collect baseline data on current practices regarding conducting background checks on potential employees and the effects on the long-term-care workforce. As of March 2011, 10 States had been awarded funding under the nationwide program: Alaska, California, Connecticut, Delaware, District of Columbia, Florida, Illinois, Missouri, New Mexico, and Rhode Island. The OIG mailed a survey to a stratified sample of 200 long-term-care provider administrators in these States. The OIG asked about their current procedures for conducting background checks on prospective employees and whether they believe that their background check procedures reduce the pool of prospective employees. The OIG requested workforce data on the number of applicants and the number of persons hired for recently filled positions, if available. Finally, the OIG solicited administrators' opinions regarding the availability and quality of long-term-care applicants. Survey results indicate that 94 percent of administrators conducted background checks on prospective employees. Only 4 percent of those administrators encountered individuals who were unwilling to undergo a background check. Twenty three percent of administrators believed that their organizations' current background check procedures reduced the pool of prospective employees. Overall, 81 percent of administrators believed that there is a sufficient pool of qualified applicants for job vacancies. However, survey results indicate that 9 percent of administrators did not receive applications from qualified individuals for at least some job vacancies. Nearly all administrators conduct background checks on prospective employees and current background check procedures do not appear to greatly reduce the available workforce. The OIG plans to use this baseline information in the mandated report to assess the effects of background checks on the availability of long term-care workers. >Click here to view the full report Share This Article |
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