Office of Inspector General Semiannual Report To Congress Spring 2011l

8/6/2019 Office of Inspector General Semiannual Report To Congress Spring 2011l

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U.S. Department of Health & Human Services

Office of Inspector General

ReportReportSemiannualSemiannualtoto

Office ofInspectorGeneral

Office ofInspectorGeneral

CongressCongressOctober 1, 2010 - March 31, 2011


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DepartmentofHealth&HumanServices

OfficeofInspectorGeneralSemiannualReporttoCongress


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InspectorGeneralsMessageandHighlights

Spring2011|HHSOIGSemiannualReporttoCongress

MessageFromtheInspectorGeneral

ThisSemiannualReporttoCongress,submittedpursuanttothe

InspectorGeneral

Act

of

1978,

as

amended,

summarizes

the

activities

oftheOfficeofInspectorGeneral(OIG),DepartmentofHealth&

HumanServices(HHS),forthe6monthperiodendingMarch31,

2011.

Thispastsixmonthshasbeenaperiodofintenseactivityforouroffice.Wehave

continuedtoconductawiderangeofaudits,evaluations,investigations,and

enforcementandcomplianceactivitiestoprotecttheintegrityoftheMedicare,Medicaid,

publichealth,andhumanservicesprograms.Wehaveledlargescalehealthcarefraud

investigationsincollaborationwithourFederal,State,andlocalpartners. Finally,our

outreachto

external

stakeholders,

including

the

Congress,

has

been

substantial.

This

threefoldapproachtoourdiverseportfoliomakingrecommendationsfor

improvementindepartmentalprograms;leveragingcriticalenforcementresourcesby

workingcloselywithourgovernmentpartners;andtargetingoutreachtoexternal

stakeholderscontinuestobeasuccessfulstrategy.

Ouraudit,evaluation,andinvestigativeactivityoverthepastsixmonthsaddresses

importantprogramvulnerabilitiessuchasquestionablebillingbyskillednursing

facilities,improperpaymentsformedicalsupplies,adverseeventsinhospitals,rebate

concernsintheMedicarePartDprogram,institutionalconflictsofinterestbyNational

InstitutesofHealth(NIH)granteesandallegedfraudbypharmaceuticalmanufacturers.

Wecontinue

to

diligently

monitor

the

impact

of

our

recommendations.

Additionally,

publicdisseminationofourworkalsoheightensourabilitytoeducateabroadrangeof

stakeholders. Forinstance,ourhospitaladverseeventreportwasdownloadedmore

than200,000timesfromourWebsite.

OurpartnershipwithotherlawenforcemententitiesaspartoftheHealthCareFraud

PreventionandEnforcementActionTeam(HEAT)continuestoproducesignificant

results,particularlyinitsStrikeForceactions. ThispastFebruary,StrikeForceteams

engagedinanunprecedentedhealthcarefraudtakedown. Teamsacrossthecountry

arrestedmorethan100defendantsin9citiesfortheirallegedparticipationinMedicare

fraudschemesinvolvingmorethan$225millioninfalsebilling.Notably,morethan

300OIG

special

agents

participated

in

coordination

with

other

Federal

and

State

agencies,includingotherOfficesofInspectorGeneral. Duringthisoperation,OIGand

theCentersforMedicare&MedicaidServices(CMS)workedtoimposepayment

suspensionsthatimmediatelypreventedalossofmorethanaquartermilliondollarsin

claimssubmittedbyStrikeForcetargets.


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Duringthisreportingperiod,OIGwitnessestestifiedatfivecongressionalhearingsat

whichwehadtheopportunitytotalkaboutourworkfightingMedicarefraud,waste,

andabuseandourrecommendationstostrengthenprogramintegrity.Wealso

highlightedoureffortstoutilizetechnology,enhanceddata,andotherinnovativetools

toidentifyandpreventfraudschemesbeforetheybecomepervasive.

Additionally,ouroutreachtoexternalstakeholdersbroadensourmissiontoeducate

providersregardingtheimportanceofinstitutingeffectivecompliancemeasureswithin

theirorganizations.WerecentlyissuedARoadmapforNewPhysicians:Avoiding

MedicareandMedicaidFraudandAbuse. Thispublicationassistsnewphysiciansand

existinghealthcareprovidersbyofferingimportantinformationabouthowtoavoid

violatinghealthcarefraudandabuselaws.Wearealsocurrentlyleadingaseriesof

ProviderComplianceTrainingsessionsaroundthecountry. Thesesessionshavebeen

verysuccessfulineducatingaudiencesofhealthcareprofessionals,includingsmall

providers,interestedindevelopingorstrengtheningtheircomplianceprograms.

As

we

tackle

an

expanding

mission

to

protect

HHSs

vital

health

and

human

service

programs,IwouldliketoexpressmyappreciationtoCongressandtotheDepartment

fortheirsustainedcommitmenttosupportingtheimportantworkofourOffice.

DanielR.Levinson

InspectorGeneral


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Highlights

Thisedition

of

the

Department

of

Health

&

Human

Services

(HHS)

Office

of

Inspector

General(OIG)SemiannualReporttoCongressaddressesthefirst6monthperiodoffiscal

year(FY)2011. Itdescribestheresultsofourreviewsandlegalandinvestigative

outcomesandpresentsrecommendationsthat,whenimplemented,willsavetaxpayer

dollars,putfundstobetteruse,and/orimproveHHSprogramsandoperationsand

qualityofcare.

SummaryofOIGAccomplishments

ForthefirsthalfofFY2011,wereportedexpectedrecoveriesofabout$3.4billion

consisting

of

$222.4

million

in

audit

receivables

and

$3.2

billion

in

investigative

receivables(whichincludes$620millioninnonHHSinvestigativereceivablesresulting

fromourworkinareassuchastheStatesshareofMedicaidrestitution).

Wereportedexclusionsof883individualsandentitiesfromparticipationinFederal

healthcareprograms;349criminalactionsagainstindividualsorentitiesthatengagedin

crimesagainstHHSprograms;and197civilactions,whichincludedfalseclaimsand

unjustenrichmentlawsuitsfiledinFederaldistrictcourt,civilmonetarypenalties(CMP)

settlements,andadministrativerecoveriesrelatedtoproviderselfdisclosurematters.

Hereisanoutlineofactivitiesandfindingsthatarehighlightedinthissectionofthe

SemiannualReport.

HEAT:HealthCareFraudPrevention&EnforcementActionTeam

TheHealthCareFraudPreventionandEnforcementActionTeam(HEAT)wasstarted

in2009byHHSandtheDepartmentofJustice(DOJ)tostrengthenprogramsandinvest

innewresourcesandtechnologiestopreventandcombathealthcarefraud,waste,and

abuse. OIGsparticipationinMedicareFraudStrikeForceactivitiesisakeycomponent

ofHEAT.

Spring2011|HHSOIGSemiannualReporttoCongress|p.i

MedicareFraudStrikeForceMedicare

Fraud

Strike

Force

teams

coordinate

law

enforcement

operations

among

Federal,State,andlocallawenforcemententities. Theseteams,nowakey

componentofHEAT,havearecordofsuccessfullyanalyzingdatatoquicklyidentify

andprosecutefraudalmostasitoccurs. TheStrikeForcebeganinMarch2007andis

operatinginninemajorcities. Chicago,IllinoisandDallas,Texaswereaddedduring

thisreportingperiod. Duringthissemiannualreportingperiod,StrikeForceefforts


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haveresultedinthefilingofchargesagainst213individualsorentities,

107convictions,and$63.9millionininvestigativereceivables.

InFebruary2011,StrikeForceteamsengagedinanunprecedentedFederalhealth

carefraudtakedown. Teamsacrossthecountryarrestedmorethan100defendants

in9cities,includingdoctors,nurses,healthcarecompanyownersandexecutives,

andothers,fortheirallegedparticipationinMedicarefraudschemesinvolvingmore

than$225millioninfalsebilling. Thedefendantsareaccusedofvarioushealthcare

relatedcrimesrangingfromviolatingtheantikickbackstatutetomoneylaundering

toaggravatedidentitytheft.Morethan300specialagentsfromOIGparticipatedin

partnershipwithotherFederalandStateagencies,includingfellowOIGs. The

effectivenessoftheStrikeForcemodelisenhancedbyinteragencycollaboration. For

example,werefercredibleallegationsoffraudtotheCentersforMedicare&

MedicaidServices(CMS)soitcansuspendpaymentstotheperpetratorsofthese

schemes. DuringtheFebruaryStrikeForceoperations,OIGandCMSworkedto

imposepaymentsuspensionsthatimmediatelypreventedalossofmorethana

quartermillion

dollars

in

claims

submitted

by

Strike

Force

targets.

MedicareandMedicaidPrescriptionDrugs

GlaxoSmithKlineLLCPays$750MillionToResolveFalseClaimsViolations

GlaxoSmithKlineLLC(GSK)agreedtopay$750millionaspartofaglobalresolution

ofallegationsundertheFalseClaimsAct(FCA),includingcriminalfinesfor

violationsoftheFederalFood,Drug,andCosmeticActof1938(FDCA). The

Governmentalleged

that

between

January

1,

2001,

and

April

1,

2005,

GSK,

via

its

nowclosedsubsidiarySBPharmco,manufactured,distributed,andsoldcertain

batches,lots,orportionsoflotsofdrugsconsistingof: PaxilCRthatcontainedsome

splittabletscausingconsumerstoreceiveeitherproductwithnoactiveingredient

and/orwithonlytheactiveingredientlayerandnocontrolledreleasemechanism;

Avandametthatcontainedsometabletswithhigherorloweramountsof

rosigitazonethanspecified;Kytrilthatwaslabeledassterilebutwas,insomevials,

nonsterile;andBactrobanointmentsandcreamsthat,insomepackages,contained

microorganisms.

Spring2011|HHSOIGSemiannualReporttoCongress|p.ii

AllerganPays$600MillionandEntersGlobalSettlementsAllergan,Inc.,andAllerganUSA,Inc.(collectively,Allergan),agreedtopay

$600millionandenteraglobalcriminal,civil,andadministrativesettlementin

connectionwithimpropermarketingandpromotionpracticesofBotox. Under

thecivilsettlementagreement,AllerganagreedtopaytheFederalGovernment

$225milliontoresolveitsliabilityundertheFCA. Thesettlementresolved

allegationsthatAllerganpromotedthesaleanduseofBotoxforavarietyof

conditionsthatwerenotapprovedbytheFoodandDrugAdministration(FDA),


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suchasheadache,pain,spasticity,andoveractivebladder,andthatAllerganmisled

physiciansaboutdrugsafetyandefficacy,instructedhealthcareprofessionalsto

miscodeclaimstoFederalhealthcareprograms,andofferedandpaidillegal

remunerationtohealthcareprofessionalsasinducements.Aspartofthesettlement,

Allerganenteredintoacomprehensive5yearcorporateintegrityagreement(CIA)

withOIG.

MedicarePartAandPartBHighlights

PatientSafetyandQualityOfthenearlyonemillionMedicarebeneficiariesdischargedfromhospitalsin

October2008,anestimatedoneinseven(13.5percent)experiencedadverseevents

duringtheirhospitalstays.

Toestablishanestimatedadverseincidentrate,weincludedinourreview: the

NationalQuality

Forums

list

of

Serious

Reportable

Events;

Medicare

hospital

acquiredconditions(HAC);andeventsresultinginprolongedhospitalstays,

permanentharm,lifesustainingintervention,ordeath. Theincidencerateprojects

toabout134,000Medicarebeneficiariesexperiencingatleast1adverseeventin

hospitalsduringasinglemonth,withsucheventscontributingtothedeathsofa

projected15,000beneficiaries. Physicianreviewersdeterminedthat44percentof

eventswerepreventable,mostcommonlybecauseofmedicalerrors,substandard

care,andinadequatepatientmonitoringandassessment. Ourrecommendationsto

CMSincludedprovidingincentivesforhospitalstoreducetheincidenceofadverse

eventsthroughtheagencyspaymentandoversightfunctions.Wealsodirected

recommendations

to

the

Agency

for

Healthcare

Research

and

Quality

(AHRQ).

AdverseEventsinHospitals: NationalIncidenceAmongMedicareBeneficiaries.

OEI060900090. FullReport

Spring2011|HHSOIGSemiannualReporttoCongress|p.iii

QuestionableBillingFrom2006to2008,skillednursingfacilities(SNF)increasinglybilledforhigher

payingresourceutilizationgroups,eventhoughbeneficiarycharacteristicsremained

largelyunchanged.

Inthatperiod,MedicarepaymentstoSNFsforultrahightherapyincreasedby

nearly90percent,risingfrom$5.7billionto$10.7billion. Forbillingpurposes,SNFs

categorizeMedicare

beneficiaries

into

resource

utilization

groups

based

on

their

care

andresourceneedsatvariouspointsduringtheirstays. Paymentratesaregenerally

higherforbeneficiarieswhoareingroupsthatrequirephysical,speech,or

occupationaltherapy. SNFsfurthercategorizetheleveloftherapybeneficiariesneed

primarilybythenumberofminutesthattherapyisprovided. Theresource

utilizationgroupsforultrahightherapyapplytothosebeneficiariesneedinghigher

levelsoftherapy.Medicaregenerallypaysthemostforultrahighleveltherapy.
http://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdf


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Thisreviewraisedconcernsaboutthepotentiallyinappropriateuseofhigherpaying

resourceutilizationgroups,particularlythoseforultrahightherapy. Our

recommendationstoCMSincludedstrengtheningitsmonitoringofSNFsthatare

billingforhigherpayingresourceutilizationgroups. QuestionableBillingbySkilled

NursingFacilities. OEI020900202. FullReport

MedicareClaimsforHomeBloodGlucoseTestStripsandLancetsWeestimatedthatabout$169.7millioncouldhavebeensavedincalendaryear

(CY)2007hadcontrolsbeeninplaceatthreeMedicareadministrativecontractors

(MAC)toensurethatclaimsforbloodglucoseteststripsand/orlancetscomplied

withcertainMedicaredocumentationrequirements.

MedicarePartBcoversteststripsandlancetsthatphysiciansprescribefordiabetics.

Medicareutilizationguidelinesallowupto100teststripsand100lancetsevery

monthforinsulintreateddiabeticsandevery3monthsfornoninsulintreated

diabetics.Additionalrequirementsapplyforreimbursementsofclaimsfor

quantitiesofteststripsandlancetsthatexceedtheutilizationguidelines(referredto

highutilizationclaims). OurrecommendationstoCMSsadministrativecontractors

includeddevelopingcosteffectivewaysofdeterminingwhichclaimsshouldbe

furtherreviewedforcompliance.

Followingarethreereportscompletedinthissemiannualperiod: (1)Reviewof

MedicareClaimsforHomeBloodGlucoseTestStripsandLancetsDurableMedical

EquipmentMedicareAdministrativeContractorforJurisdictionB,A090800044,Report;

(2)ReviewofMedicareClaimsforHomeBloodGlucoseTestStripsandLancetsDurable

MedicalEquipmentMedicareAdministrativeContractorforJurisdictionC,A090800045,

Report;

and

(3)

Review

of

Medicare

Claims

for

Home

Blood

Glucose

Test

Strips

and

LancetsDurableMedicalEquipmentMedicareAdministrativeContractorfor

JurisdictionD,A090800046,Report.

MedicarePartC

Spring2011|HHSOIGSemiannualReporttoCongress|p.iv

ImpactontheMedicareProgramofInvestmentIncomeThatMedicareAdvantageOrganizationsEarnedandRetainedFromMedicareFunds

TheMedicareprogramlosespotentialsavingsassociatedwiththeinvestment

incomethatMedicareAdvantage(MA)organizationsearnbetweenthetimethey

receiveMedicare

prepayments

and

the

time

the

MA

organizations

pay

for

medical

services.

TheMedicarePartAandPartBtrustfunds(whichfinancetheMAprogram)could

haveearnedapproximately$450millionofinterestincomeinCY2007had

prepaymentstoMAorganizationsbeendelayeduntilafterthebeginningofthe

beneficiaryscoverageperiodbythesamenumberofdaysthatweestimatedMA

organizationsheldMedicarethefundsbeforeusingthemtopayforservices.
http://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdf


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Alternatively,weestimatedthatMedicarecouldhavesavedabout$376millionhad

MAorganizationsreducedtherevenuerequirementsinbidproposalstoaccountfor

anticipatedinvestmentincome. OurrecommendationstoCMSincludedpursuing

legislationtoadjustthetimingofMedicaresprepaymentstoMAorganizations.

RollupReviewofImpactonMedicareProgramforInvestmentIncomeThatMedicare

AdvantageOrganizations

Earned

and

Retained

From

Medicare

Funds

in

2007.

A071001080. FullReport

MedicarePartD

ConcernsWithRebatesintheMedicarePartDProgramPartDsponsorsunderestimatedrebatesin69percentoftheirbidsforplanyear2008,

whichledtohigherbeneficiarypremiumsandcausedbeneficiariesandthe

Governmenttooverpayforthebenefit.

Sponsorsbids

to

participate

in

Part

D

include

estimates

of

the

cost

to

provide

benefitstobeneficiaries. Sponsorsalsonegotiatedrugmanufacturerrebatesand

otherpriceconcessionstoreducethecostoftheprogramtobeneficiariesandthe

Governmentandmustincludeanestimateintheirbidsoftherebatestheyexpectto

receivefortheplanyear. CMSusesbidstocalculatebeneficiarypremiumsforeach

plan. Underestimatingrebatesincreasesbeneficiarypremiums. Recommendations

toCMSincludedtakingstepstoensurethatsponsorsmoreaccuratelyincludetheir

expectedrebatesintheirbids. ConcernsWithRebatesintheMedicarePartDProgram.


Medicaid

Spring2011|HHSOIGSemiannualReporttoCongress|p.v

NewYorksMedicaidRehabilitativeServicesClaimsSubmittedbyCommunityResidenceProviders

NewYorkStateimproperlyclaimedanestimated$207.6millioninFederalMedicaid

reimbursementforrehabilitationservicessubmittedbycommunityresidence

rehabilitationprovidersduringCYs2004through2007.

NewYorkStateelectedtoincludecoverageofrehabilitationservicesprovidedto

recipientsresidingincommunityresidences(grouphomesandapartments)inits

Medicaid

program.

Of

the

100

claims

in

our

random

sample,

31

complied

with

FederalandStaterequirements,but69didnot. OurrecommendationstotheState

MedicaidagencyincludedworkingwiththeStatesOfficeofMentalHealthto

implementguidancetophysiciansregardingStateregulationsontheauthorization

ofcommunityresidencerehabilitationservices. ReviewofNewYorksMedicaid

RehabilitativeServicesClaimsSubmittedbyCommunityResidenceProviders.

http://oig.hhs.gov/oas/reports/region7/71001080.pdfhttp://oig.hhs.gov/oas/reports/region7/71001080.pdfhttp://oig.hhs.gov/oas/reports/region7/71001080.pdfhttp://oig.hhs.gov/oas/reports/region7/71001080.pdfhttp://oig.hhs.gov/oei/reports/oei-02-08-00050.pdfhttp://oig.hhs.gov/oei/reports/oei-02-08-00050.pdfhttp://oig.hhs.gov/oei/reports/oei-02-08-00050.pdfhttp://oig.hhs.gov/oei/reports/oei-02-08-00050.pdfhttp://oig.hhs.gov/oas/reports/region2/20801006.pdfhttp://oig.hhs.gov/oas/reports/region2/20801006.pdfhttp://oig.hhs.gov/oas/reports/region2/20801006.pdfhttp://oig.hhs.gov/oas/reports/region2/20801006.pdfhttp://oig.hhs.gov/oas/reports/region2/20801006.pdfhttp://oig.hhs.gov/oei/reports/oei-02-08-00050.pdfhttp://oig.hhs.gov/oas/reports/region7/71001080.pdf


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InappropriateClaimsforMedicaidPersonalCareServicesOur10StatereviewrevealedthatMedicaidpaidabout$724millionforthe

18percentofpersonalcareservicesclaimsthatwedeterminedwereinappropriate

becausepersonalcareattendantsqualificationswereundocumented.

Thequalifications

most

often

undocumented

were

background

checks,

age,

and

education.WeestimatedthatMedicaidpaidanadditional2percentofclaims

inappropriatelybecausetherespondentshadnorecordofprovidingservicestothe

beneficiaries. RespondentswereagenciesorindividualsthatStateMedicaidagency

officialsindicatedweshouldcontacttorequestdocumentationtosupport

attendantsqualifications.WereviewedclaimspaidfromSeptember1,2006,

throughAugust31,2007. OurrecommendationstoCMSincludedworkingwith

StatestoensurethatMedicaidclaimsforpersonalcareservicesprovidedby

attendantswithundocumentedqualificationsarenotpaid. InappropriateClaimsfor

MedicaidPersonalCareServices. OEI070800430. FullReport

OtherHealthCareInvestigations

DurableMedicalEquipmentSupplierSentencedOliverNkuku,amanagerforK.O.Medical,Inc.(K.O.),andCallistusEdozie,aK.O.

deliveryemployee,weresentencedto120monthsand41monthsofincarceration,

respectively,andorderedtopay$453,112and$80,000inrestitution,jointlyand

severally,fortheirrolesinadurablemedicalequipment(DME)fraudschemerelated

topowerwheelchairsandotherDMEthatweremedicallyunnecessaryand

improperlybilledascatastropherelatedinconnectionwithGulfCoasthurricanes.

Spring2011|HHSOIGSemiannualReporttoCongress|p.vi

PhysicalTherapyClinicSubmittedMultipleFalseClaimstoMedicareBerniceBrown,ownerofDetroitareaphysicaltherapyclinicWayneCounty

TherapeuticInc.(WCT),andDanielSmorynski,WCTvicepresident,wereconvicted

onchargesofhealthcarefraudfortheirleadingrolesinaMedicarefraudscheme.

BrownandSmorynskiweresentencedto12yearsand7monthsand9yearsin

prison,respectively,andwereorderedtopay$6.7millioninrestitutionjointlyand

severally. FromOctober2002toApril2007,WCTcausedthesubmissionofmultiple

claimstotheMedicareprogramforphysicaltherapy,occupationaltherapy,and

psychotherapyservicespurportedlyprovidedandsupervisedbyWCTstaffwhen,in

fact,such

services

were

not

professionally

provided

or

supervised.
http://oig.hhs.gov/oei/reports/oei-07-08-00430.pdfhttp://oig.hhs.gov/oei/reports/oei-07-08-00430.pdfhttp://oig.hhs.gov/oei/reports/oei-07-08-00430.pdfhttp://oig.hhs.gov/oei/reports/oei-07-08-00430.pdfhttp://oig.hhs.gov/oei/reports/oei-07-08-00430.pdf


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PublicHealthReviews

CentersforDiseaseControlandPreventionsComplianceWithAppropriationsLawsandAcquisitionRegulations

Fourresearch

and

development

and

information

technology

contracts

with

the

CentersforDiseaseControlandPrevention(CDC)didnotfullycomplywithoneor

moreappropriationslawsandacquisitionregulationswithrespecttocompetition,

funding,andpricing.

Pursuanttoacongressionalrequest,weareconductingaseriesofreviewsofCDCs

contractingpractices. Duringthissemiannualperiod,wearereportingtheresultsof

ourreviewsoffourcontractors. Ourrecommendationsincludedadheringto

establishedproceduresanddevelopingandimplementingpoliciesandprocedures

toaddresscompliancewithappropriationsstatutesandacquisitionregulations.

Followingarethereportsthatwerecompletedinthissemiannualperiod: Reviewof

theCenters

for

Disease

Control

and

Preventions

Compliance

With

Appropriations

Laws

and

AcquisitionRegulationsContractorB,A020902005,Report;ReviewoftheCentersfor

DiseaseControlandPreventionsComplianceWithAppropriationsLawsandAcquisition

RegulationsContractorC,A020902006,Report;ReviewoftheCentersforDisease

ControlandPreventionsComplianceWithAppropriationsLawsandAcquisition

RegulationsContractorD,A040901066,Report;andReviewoftheCentersforDisease

ControlandPreventionsComplianceWithAppropriationsLawsandAcquisition

RegulationsContractorE,A040906108,Report.

Spring2011|HHSOIGSemiannualReporttoCongress|p.vii

InstitutionalConflictsofInterestatNationalInstitutesofHealthGranteesThe

National

Institutes

of

Health

(NIH)

lacks

information

on

the

number

of

institutionalconflictsthatexistamongitsgranteeinstitutionsandtheimpactthese

conflictsmayhaveonNIHsponsoredresearch.

Institutionalconflictsofinterestmayarisewheninstitutionsfinancialinterests

(e.g.,royalties,equity,stockholdings,andgifts)orthoseofseniorofficialsposerisks

ofundueinfluenceondecisionsinvolvingtheinstitutionsresearch. NoFederal

regulationsrequireNIHgranteeinstitutionstoidentifyandreportinstitutional

conflictstoNIH.Wesurveyed250granteeinstitutionsandrequestedinformationon

anyinstitutionalfinancialinterestsrelatedtoNIHgrantsawardedinFY2008.

DespitethelackofFederalrequirements,70of156respondingNIHgrantee

institutionshadwrittenpoliciesandproceduresaddressingtheseinterests.Wealsofoundthatalthoughnotrequiredforinstitutionalconflicts,69of156responding

NIHgranteeinstitutionshadwrittenpoliciesandproceduresaddressingsuch

conflicts. Fiftynineofthesixtynineinstitutionsdefined,inwriting,what

constitutesaninstitutionalconflict.WerecommendedthatNIHpromulgate

regulationsthataddressinstitutionalfinancialconflictsofinterest. Institutional

ConflictsofInterestatNIHGrantees. OEI030900480. FullReport
http://oig.hhs.gov/oas/reports/region2/20902005.pdfhttp://oig.hhs.gov/oas/reports/region2/20902006.pdfhttp://oig.hhs.gov/oas/reports/region4/40901066.pdfhttp://oig.hhs.gov/oas/reports/region4/40906108.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00480.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00480.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00480.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00480.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00480.pdfhttp://oig.hhs.gov/oas/reports/region4/40906108.pdfhttp://oig.hhs.gov/oas/reports/region4/40901066.pdfhttp://oig.hhs.gov/oas/reports/region2/20902006.pdfhttp://oig.hhs.gov/oas/reports/region2/20902005.pdf


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EducationandOutreachActivities

RoadmapforNewPhysiciansArecentOIGsurveyindicatedthatalmosthalfofmedicalschoolsandmorethan

twothirdsofinstitutionsofferingresidencyandfellowshipprogramsreported

instructingparticipantsaboutcompliancewithMedicareandMedicaidfraudand

abuselaws.WedevelopedaguidecalledARoadmapforNewPhysicians:Avoiding

MedicareandMedicaidFraudandAbuse(Roadmap). Thepackageincludesaslide

presentationandspeakernotes. YoucanviewthesurveyandRoadmaponourWeb

siteathttp://www.oig.hhs.gov.

TheRoadmapsummarizesthefivemainFederalfraudandabuselawsandinstructs

physicianshowtoupholdtheselawsintheirrelationshipswithpayerssuchasthe

Medicare

and

Medicaid

programs,

vendors

such

as

drug,

biologic,

and

medical

devicecompanies,andfellowproviderssuchashospitals,nursinghomes,and

physiciancolleagues.

ProviderComplianceTrainingSessionsIn2011,OIGimplementedaProviderComplianceTraininginitiative. Theinitiative

providesfree,highqualitycompliancetrainingsessionsformedicalprovidersand

suppliers,complianceprofessionals,andattorneysatlocationsthroughoutthe

country.Weheldthreetrainingsessionsinthepast6months. Representativesfrom

OIG,DOJ,CMS,andStateMedicaidFraudControlUnits(MFCU)educate

communities

about

fraud

risks

and

share

compliance

best

practices

to

assist

providersinstrengtheningtheircomplianceefforts.

Spring2011|HHSOIGSemiannualReporttoCongress|p.viii

MostWantedFugitivesListForthefirsttime,wepublishedaMostWantedFugitiveslistonourWebsite,and

capturesweresoonreported. The10individualsontheoriginallistallegedly

defraudedtaxpayersofmorethan$126.6million.AsofMarch31,2011,four

fugitivesfromourlisthadbeencapturedandmorewereadded.
http://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdfhttp://www.oig.hhs.gov/fraud/PhysicianEducation/http://www.oig.hhs.gov/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/fugitives/http://www.oig.hhs.gov/http://www.oig.hhs.gov/fraud/PhysicianEducation/http://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdf


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Spring2011|HHSOIGSemiannualReporttoCongress|p.ix

CongressionalTestimonyDuringthissemiannualperiod,wetestifiedatfivehearingsconductedbycommitteesof

Congress

on

aspects

of

waste,

fraud,

and

abuse

in

Medicare

and

Medicaid.

The

full

text

ofthetestimonyisavailableonourWebsiteathttp://www.oig.hhs.gov/testimony.asp.

March17,2011HouseofRepresentativesCommitteeonAppropriations,SubcommitteeonLabor,HealthandHumanServices,Education,and

RelatedAgencies.

DanielR.Levinson,InspectorGeneral,testifiedaboutoureffortstomonitorand

makerecommendationstoreduceimproperpaymentsinMedicareandMedicaid,to

overseeHHSsmeasurementofimproperpaymentsandtoprevent,detect,and

recoup

wasteful

payments.

Testimony

March9,2011UnitedStatesSenateCommitteeonHomelandSecurity&GovernmentalAffairs,SubcommitteeonFederalFinancialManagement,

GovernmentInformation,FederalServices,andInternationalSecurity

DanielR.Levinson,InspectorGeneral,testifiedaboutoureffortsandthoseofour

partnerstocombatwaste,fraud,andabuseinMedicareandMedicaid. Testimony

March2,2011UnitedStatesSenateCommitteeonFinanceDanielR.Levinson,InspectorGeneral,testifiedaboutpreventinghealthcarefraud:

newtools

and

approaches

to

combat

old

challenges.

Testimony

March2,2011HouseofRepresentativesCommitteeonWaysandMeans,SubcommitteeonOversight

LewisMorris,ChiefCounseltotheInspectorGeneral,testifiedaboutimproving

effortstocombathealthcarefraud. Testimony

March2,2011HouseofRepresentativesCommitteeonEnergy&Commerce,SubcommitteeonOversightandInvestigations

GeraldRoy,DeputyInspectorGeneralforInvestigations,testifiedaboutwaste,fraud,andabuse: acontinuingthreattoMedicareandMedicaid. Testimony OmarPerez,AssistantSpecialAgentinCharge,OIGMiamiRegionalOffice,testifiedaboutwaste,fraud,andabuse: acontinuingthreattoMedicareand

Medicaid. Testimony
http://www.oig.hhs.gov/testimony.asphttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03172011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03092011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03092011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/morris_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/morris_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/roy_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/roy_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/perez_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/perez_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/perez_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/roy_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/morris_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03022011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03092011.pdfhttp://www.oig.hhs.gov/testimony/docs/2011/levinson_testimony_03172011.pdfhttp://www.oig.hhs.gov/testimony.asp


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TableofContents

OutlineofMajorPartsandAppendixes

PartI: MedicareReviewsPartII: MedicaidReviewsPartIII: LegalandInvestigativeActivitiesRelatedto

MedicareandMedicaidPartIV: PublicHealth,HumanServices,and

DepartmentwideIssues

AppendixA: ReportingRequirementsoftheInspectorGeneralActof1978,asAmended

AppendixB: QuestionedCostsandFundsToBePuttoBetterUse

AppendixC: PeerReviewResultsAppendixD: SummaryofSanctionAuthoritiesAppendixE: AcronymsandAbbreviations



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PartI:MedicareReviews

PartI:MedicareReviewsMedicarePartAandPartB ............................................................................................1

Hospitals..................................................................................................................................1 AdverseEventsinHospitals:NationalIncidenceAmongMedicareBeneficiaries.........................................................................................................................1

PaymentsExceedingChargesforOutpatientServicesProcessedbyWisconsinPhysiciansServiceInsuranceCorporationforCalendarYears

2004through2007...............................................................................................................2Nursing

Homes ......................................................................................................................3

PaymentsforAmbulatorySurgicalCenterServicesProvidedtoBeneficiariesinSkilledNursingFacilityStaysCoveredUnderMedicare

PartA ....................................................................................................................................3 QuestionableBillingbySkilledNursingFacilities.......................................................3 NursingFacilitiesEmploymentofIndividualsWithCriminalConvictions..........................................................................................................................4

OtherMedicareServices.......................................................................................................5 QuestionableBillingforMedicareOutpatientTherapyServices..............................5Medicare

Market

Shares

of

Mail

Order

Diabetic

Testing

Strips................................5

MedicareClaimsforHomeBloodGlucoseTestStripsandLancets ........................6PartBPrescriptionDrugs .....................................................................................................7

MedicarePaymentsforNewlyAvailableGenericDrugs...........................................7 ComparisonofAverageSalesPricesandAverageManufacturerPrices:ImpactonMedicareReimbursementofPartBPrescriptionDrugs..........................8

QuestionableBillingforBrandNameInhalationDrugs............................................9 PaymentforDrugsundertheHospitalOutpatientProspectivePaymentSystem...................................................................................................................................9

MedicarePartAandPartBAdministration ...................................................................10 UseofPaymentSuspensionstoPreventInappropriateMedicarePayments............................................................................................................................10

MedicareandMedicaidFraudandAbuseTraininginMedicalEducation..........11


QualityImprovementOrganizationsFinalResponsestoBeneficiaryComplaints.........................................................................................................................11


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UseofMedicareFeeforServiceErrorRateDataToIdentifyandFocusonErrorProneProviders................................................................................................12

ComplaintsReceivedThroughthe1800HHSTIPSHotline..................................12 MedicareContractorInformationSecurityProgramEvaluationsforFiscalYear2008 .................................................................................................................12

MedicarePartC ..............................................................................................................13 ImpactonMedicareProgramofInvestmentIncomeThatMedicareAdvantageOrganizationsEarnedandRetainedFromMedicareFundsin

2007 .....................................................................................................................................13MedicarePartD..............................................................................................................14

MedicarePartDPharmacyDiscountsfor2008 ..........................................................14 TerminatedDrugsintheMedicarePartDProgram..................................................15 ErectileDysfunctionDrugsintheMedicarePartDProgram..................................15 ConcernsWithRebatesintheMedicarePartDProgram.........................................16 OversightofthePrescriberIdentifierFieldinPartDPrescriptionDrugEventDataforScheduleIIDrugs..................................................................................17


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PartII:MedicaidReviews


PartII:

MedicaidReviews

MedicaidServices ..................................................................................................................1 NewYorksMedicaidRehabilitativeServicesClaimsSubmittedbyCommunityResidenceProviders ...................................................................................1

WashingtonStatesMedicaidClaimsforNonqualifiedAliens..................................1 FamilyPlanningServicesClaimedbyWashingtonState ...........................................2 InappropriateClaimsforMedicaidPersonalCareServices.......................................3 PersonalCareServicesProvidedbyTriStateHomeHealthandEquipmentServices,Inc.,intheDistrictofColumbia.................................................3

FederalReimbursementClaimedbyNorthCarolinaforMedicaidPersonal

Care

Services

Claims

Submitted

by

Shipman

Family

Home

Care,Inc................................................................................................................................4 MedicaidPersonalCareServicesClaimsMadebyProvidersinNewYorkState.......................................................................................................................................5

MedicaidRecoveryActReviews.........................................................................................5 QuarterlyMedicaidStatementofExpendituresfortheMedicalAssistancePrograminIndianafortheQuarterEndingMarch31,2009 .................5

IllinoisPromptPayComplianceUndertheAmericanRecoveryandReinvestmentAct................................................................................................................6

MedicaidPromptPayRequirementsinNewHampshire..........................................6 AlabamasComplianceWiththeReserve,orRainyDay,FundRequirementfortheIncreasedFederalMedicalAssistancePercentage

UndertheAmericanRecoveryandReinvestmentAct ...............................................7MedicaidAdministration.....................................................................................................8

OversightandEvaluationoftheFiscalYear2008PaymentErrorRateMeasurementProgram......................................................................................................8

IndianasReportingofFundRecoveriesforFederalandStateMedicaidProgramsontheFormCMS64forFederalFiscalYears2000Through

2008 .......................................................................................................................................8OtherMedicaidRelatedReviews.......................................................................................9

ContractSignaturesfortheHurricaneKatrinaHealthCareRelatedProfessionalWorkforceSupplyGrantfortheGreaterNewOrleansArea..............9


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PartIII: LegalandInvestigativeActivitiesforMedicareandMedicaid

PartIII:

LegalandInvestigativeActivities

RelatedtoMedicareandMedicaid

InvestigativeOutcomes ........................................................................................................1AdvisoryOpinionsandOtherGuidance ..........................................................................1EducationandOutreachActivities.....................................................................................2

RoadmapforNewPhysicians..........................................................................................2 ProviderComplianceTrainingSessions ........................................................................2 MostWantedFugitivesList..............................................................................................2

HEAT: HealthCareFraudPrevention&EnforcementActionTeam...........................3 MedicareFraudStrikeForce ............................................................................................3

OtherCriminalandCivilEnforcementActivities...........................................................4 PharmaceuticalManufacturersandPharmacies..........................................................5 Hospitals ..............................................................................................................................6 DurableMedicalEquipmentSuppliers..........................................................................7 Practitioner...........................................................................................................................8 PhysicalTherapyClinic.....................................................................................................8 Laboratory ...........................................................................................................................8 HomeHealthServices.......................................................................................................9 SkilledNursingFacility.....................................................................................................9

MedicaidFraudControlUnits.............................................................................................9 JointInvestigations...........................................................................................................10

ProviderSelfDisclosureProtocol.....................................................................................10 SelfDisclosureGuidancetoHealthCareProviders..................................................11 SelfDisclosureCases .......................................................................................................11

OfficeofInspectorGeneralAdministrativeSanctions................................................12 ProgramExclusions .........................................................................................................12 CorporateIntegrityAgreements....................................................................................13 CivilMonetaryPenaltiesLaw........................................................................................13 PatientDumping ..............................................................................................................14

Spring2011|HHSOIGSemiananualReporttoCongress


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PartIV: PublicHealth,HumanServices,andDepartmentwideIssues

PartIV:

PublicHealth,HumanServices,

andDepartmentwideIssues

PublicHealth ....................................................................................................................1CentersforDiseaseControlandPrevention ....................................................................1

CentersforDiseaseControlandPreventionsAccountabilityforProperty............1 CentersforDiseaseControlandPreventionsComplianceWith

AppropriationsLawsandAcquisitionRegulations ....................................................2FoodandDrugAdministration...........................................................................................4

FDAsApprovalStatusofDrugsPaidforbyMedicaid...............................................4HealthResourcesandServicesAdministration...............................................................5

RyanWhiteTitleIIFundinginPennsylvania...............................................................5 RyanWhiteTitleIIAIDSDrugAssistanceProgramFundinginNew

Jersey.....................................................................................................................................5 IndianHealthService............................................................................................................6

AuditoftheIndianHealthServicesInternalControlsOverMonitoringofRecipientsComplianceWithRequirementsoftheLoanRepayment

Program................................................................................................................................6 AuditoftheIndianHealthServicesInternalControlsOverMonitoring

ofRecipientsComplianceWithRequirementsofNursingProgram

Scholarships.........................................................................................................................7NationalInstitutesofHealth...............................................................................................7

InstitutionalConflictsofInterestatNIHGrantees ......................................................7 AppropriationsFundingforNationalHeart,Lung,andBloodInstitute

ContractHHSN268200800012CWithInformationManagement

Services,Inc. ........................................................................................................................8PublicHealthRelatedLegalActionsandInvestigations ..............................................9

HealthEducationAssistanceLoanProgram.................................................................9


HEALExclusions................................................................................................................9


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PartIV: PublicHealth,HumanServices,andDepartmentwideIssues


HumanServices..............................................................................................................10 FosterCare.............................................................................................................................10

AlleghenyCountyTitleIVEFosterCareClaimsFromOctober1997ThroughSeptember2002 ................................................................................................10

HeadStart..............................................................................................................................10 DistrictofColumbiaDepartmentofParksandRecreationsCompliance

WithHealthandSafetyRegulationsforHeadStartPrograms ...............................10JobandFamilyServices......................................................................................................12

OhioDepartmentofJobandFamilyServicesClaimsforCostsReportedbytheHamiltonCountyDepartmentofJobandFamilyServices .........................12

ChildSupportEnforcement...............................................................................................12 ChildSupportTaskForces .............................................................................................12 ChildSupportInvestigations.........................................................................................13

DepartmentwideIssues................................................................................................13 DepartmentalFinancialStatementAudit ....................................................................13 NonFederalAudits .........................................................................................................15 ContractAudits.................................................................................................................15 GranteeFraudandMisconduct.....................................................................................16 RecoveryActRetaliationComplaintInvestigation....................................................16 LegislativeandRegulatoryReviews.............................................................................16


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PartI:


MedicareReviews


22/103


PartI:

MedicareReviews

TheOfficeofInspectorGeneral(OIG)reliesontheDepartmentofHealth&Human

Services(HHS)management,otherpolicymakersintheexecutivebranch,States,and

Congresstoimplementtherecommendationsthatarisefromourreviews.Manyofour

recommendationsaredirectlyimplementedbyorganizationswithinHHS,andsomeare

actedonbyStatesthatcollaboratewithHHStoadminister,operate,and/oroverseejoint

programs,suchasMedicaidandHeadStartprogramgrants. Congressoften

incorporatesourrecommendationsintolegislativeactions,resultinginsubstantial

improvementsinHHSprogramsandoperationsandinfundsbeingmadeavailablefor

betteruse.

MedicarePartAandPartB

Hospitals

Medicare > PartAandPartB > Hospitals > AdverseEvents

AdverseEventsinHospitals: NationalIncidenceAmongMedicareBeneficiaries

Ofthe

nearly

1million

Medicare

beneficiaries

who

were

discharged

from

hospitals

inOctober2008,anestimatedoneinseven(13.5percent)experiencedadverseevents

duringtheirhospitalstays.

Toestablishanestimatedadverseeventsincidentrate,weincludedinourreview:

theNationalQualityForumsSeriousReportableEvents; Medicarehospitalacquiredconditions(HAC);and eventsresultinginprolongedhospitalstays,permanentharm,lifesustainingintervention,ordeath.

Spring2011|HHSOIGSemiannualReporttoCongress|I1

Theincidencerateprojectstoabout134,000Medicarebeneficiariesexperiencingat

least1adverseeventinhospitalsduringasinglemonth,withsuchevents

contributingtothedeathsofaprojected15,000beneficiaries. Physicianreviewers

determinedthat44percentofeventswerepreventable,mostcommonlybecauseof

medicalerrors,substandardcare,andinadequatepatientmonitoringand

assessment.

WerecommendedthatAdministrationforHealthcareResearchandQuality(AHRQ)

andtheCentersforMedicare&MedicaidServices(CMS)broadenpatientsafety


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effortstoincludealltypesofadverseeventsandenhanceeffortstoidentifyevents.

WealsorecommendedthatCMSprovidemoreincentivesforhospitalstoreduce

adverseeventsthroughitspaymentandoversightfunctions,including

strengtheningtheMedicareHACpolicyandholdinghospitalsaccountablefor

adoptingevidencebasedpractices.AHRQandCMSconcurredwithour

recommendations.Adverse

Events

in

Hospitals:

National

Incidence

Among

Medicare

Beneficiaries. OEI060900090. FullReport

Medicare > PartAandPartB >Hospitals >HospitalBasedOutpatientServices


PaymentsExceedingChargesforOutpatientServicesProcessedbyWisconsinPhysiciansServiceInsuranceCorporationforCalendarYears

2004through2007

WisconsinPhysiciansServiceInsuranceCorporation(WPS),aMedicarecontractor,

madeincorrectMedicarepaymentstohospitalsinexcessoftheirchargesfor

outpatientservices

for

calendar

years

(CY)

2004

through

2007.

The

incorrect

paymentsincludedoverpaymentstotaling$9.2million,whichhospitalshadnot

refundedbythestartofouraudit.

Medicarepayshospitalsforoutpatientservicesusingthehospitaloutpatient

prospectivepaymentsystem. Inthismethodofreimbursement,theMedicare

paymentisnotbasedontheamountthatthehospitalcharges. Consequently,the

billedcharges(thepricesthatahospitalsetsforitsservices)donotaffectthecurrent

Medicarepaymentamounts. Billedchargesgenerallyexceedtheamountthat

Medicarepaysthehospital. Therefore,aMedicarepaymentthatsignificantly

exceedsthebilledchargesisathighriskofoverpayment. Theincorrectpayments

involvedexcessiveunitsofservice,HealthcareCommonProcedureCodingSystem(HCPCS)codesthatdidnotreflecttheproceduresperformed,unallowableservices,

andlackofsupportingdocumentation.

WerecommendedthatWPSrecoverthe$9.2millioninidentifiedoverpaymentsand

usetheresultsofthisauditinitshospitaleducationactivities.WPSdescribed

actionsthatithadtakenorplannedtotaketoaddressourrecommendations. Review

ofPaymentsExceedingChargesforOutpatientServicesProcessedbyWisconsinPhysicians

ServiceInsuranceCorporationforCalendarYears2004Through2007.A071004167.

FullReport
http://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdfhttp://oig.hhs.gov/oas/reports/region7/71004167.pdfhttp://oig.hhs.gov/oas/reports/region7/71004167.pdfhttp://oig.hhs.gov/oas/reports/region7/71004167.pdfhttp://oig.hhs.gov/oas/reports/region7/71004167.pdfhttp://oig.hhs.gov/oas/reports/region7/71004167.pdfhttp://dev.oig.cit.nih.gov/oei/reports/oei-06-09-00090.pdf


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NursingHomes

Medicare > PartAandPartB > NursingHomes > PartBPaymentsDuringPartAStays

PaymentsforAmbulatorySurgicalCenterServicesProvidedtoBeneficiaries

in

Skilled

Nursing

Facility

Stays

Covered

Under

Medicare

PartA

Medicarecontractorsmadeatleastanestimated$6.6millioninoverpaymentsto

ambulatorysurgicalcenters(ASC)forservicesprovidedtobeneficiariesduring

PartAskillednursingfacility(SNF)staysinCYs2006through2008.

All100servicesthatwereviewed,totaling$103,000,werealreadyincludedinthe

SNFsPartApaymentsbutwereneverthelessbilledtoMedicarePartB.Asaresult,

Medicarepaidtwicefortheseservices.

WerecommendedthattheCMSinstructitsMedicarecontractorsto:(1)recoverthe

$103,000inoverpaymentsforthe100incorrectlybilledservicesthatweidentified;(2)reviewthe20,806servicesthatwedidnotreviewandrecoveroverpayments

estimatedtototalatleast$6.5million;and(3)provideguidancetoASCson

consolidatedbillingrequirementsandtheneedfortimelyandaccurate

communicationbetweenASCsandSNFsaboutbeneficiariesMedicarePartAstatus.

WealsorecommendedthatCMSestablishaneditintheCommonWorkingFile

(CWF)topreventPartBpaymentsforASCservicesthataresubjecttoconsolidated

billing. PaymentsforAmbulatorySurgicalCenterServicesProvidedtoBeneficiariesin

SkilledNursingFacilityStaysCoveredUnderMedicarePartAinCalendarYears2006

through2008.A010900521. FullReport

Medicare > PartAandPartB > NursingHomes > SNFPaymentRules


QuestionableBillingbySkilledNursingFacilitiesFrom2006to2008,SNFsincreasinglybilledforhigherpayingresourceutilization

groups,eventhoughbeneficiarycharacteristicsremainedlargelyunchanged.

Inthatperiod,MedicarepaymentstoSNFsforultrahightherapyincreasedby

nearly90percent,risingfrom$5.7billionto$10.7billion. Forbillingpurposes,SNFs

categorizeMedicarebeneficiariesintoresourceutilizationgroups(RUG)basedon

theircareandresourceneedsatvariouspointsduringtheirstays. Paymentratesare

generallyhigherforbeneficiarieswhoareingroupsthatrequirephysical,speech,or

occupationaltherapy. TheRUGsforultrahightherapyapplytothosebeneficiaries

needinghigherlevelsoftherapy.Medicaregenerallypaysthemostforultrahigh

leveltherapy. Thisreviewraisedconcernsaboutthepotentiallyinappropriateuseof

higherpayingRUGs,particularlythoseforultrahightherapy.
http://oig.hhs.gov/oas/reports/region1/10900521.pdfhttp://oig.hhs.gov/oas/reports/region1/10900521.pdfhttp://oig.hhs.gov/oas/reports/region1/10900521.pdfhttp://oig.hhs.gov/oas/reports/region1/10900521.pdfhttp://oig.hhs.gov/oas/reports/region1/10900521.pdf


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WerecommendedthatCMS:(1)monitoroverallpaymentstoSNFsandadjustrates,

ifnecessary;(2)changethecurrentmethodfordetermininghowmuchtherapyis

neededtoensureappropriatepayments;(3)strengthenmonitoringofSNFsthatare

billingforhigherpayingRUGs;and(4)followupontheSNFsidentifiedashaving

questionablebilling. CMSconcurredwiththreeofthefourrecommendations. Itdid

notconcur

with

the

recommendation

to

change

the

method

for

determining

how

muchtherapyisneededbutstatedthatitiscommittedtopursuingimprovementsto

theSNFpaymentsystem.Weremainconcernedthatthepaymentsystemcontinues

toprovideincentivestoSNFstobillformoretherapythanisneeded,andwe

stronglyencourageCMStopursuetheoptionswerecommendedtoreducethis

vulnerability. QuestionableBillingbySkilledNursingFacilities. OEI020900202. Full

Report

Medicare > PartAandPartB > NursingHomes > BackgroundChecksofEmployees


Nursing

Facilities

Employment

of

Individuals

With

Criminal

Convictions

Almostall(92percent)ofnursingfacilitiesinourreviewemployedatleastone

individualwithatleastonecriminalconviction.

WeanalyzedcriminalhistoryrecordsmaintainedbytheFederalBureauof

Investigation(FBI)andfoundthatoverall,5percentofnursingfacilityemployees

hadatleastonecriminalconviction. Fortyfourpercentofemployeeswithcriminal

convictionscommittedcrimesagainstpropertysuchasburglary,shoplifting,and

writingbadchecks.Mostconvictionsoccurredpriortoemployment.Wefoundthat

theFBIsrecordsdonotcontaininformationonwhetherthevictimofacrimewasa

nursingfacilityresidentandthereforecannotbeusedbythemselvestodetermine

whetheraconviction

disqualifies

an

individual

from

nursing

facility

employment.

WealsofoundthatmostStatesrequired,and/ornursingfacilitiesreported

conducting,sometypeofbackgroundcheck.

ThePatientProtectionandAffordableCareActof2010(AffordableCareAct)

requirestheSecretaryofHHStocarryoutanationwideprogramforStatesto

conductnationalandstatewidecriminalbackgroundchecksfordirectpatientaccess

employeesofnursingfacilitiesandotherproviders. Statesmayparticipateinthe

nationalbackgroundcheckprogrambyenteringintoagreementswiththeSecretary.

InlightofthebackgroundcheckprogramthattheAffordableCareActcreated,we

recommended

that

CMS

develop

background

check

procedures,

including

(1)

clearly

definingtheemployeeclassificationsthataredirectpatientaccessemployeesand

(2)workingwithparticipatingStatestodevelopalistofconvictionsthatdisqualify

anindividualfromnursingfacilityemploymentundertheFederalregulationand

timeframesinwhicheachconvictionbarstheindividualfromemployment. CMS

agreedwithourrecommendation. NursingFacilitiesEmploymentofIndividualsWith

CriminalConvictions. OEI070900110. FullReport
http://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-07-09-00110.pdfhttp://oig.hhs.gov/oei/reports/oei-07-09-00110.pdfhttp://oig.hhs.gov/oei/reports/oei-07-09-00110.pdfhttp://oig.hhs.gov/oei/reports/oei-07-09-00110.pdfhttp://oig.hhs.gov/oei/reports/oei-07-09-00110.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdfhttp://oig.hhs.gov/oei/reports/oei-02-09-00202.pdf


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OtherMedicareServices

Medicare > PartAandPartB > OutpatientTherapyServices

QuestionableBillingforMedicareOutpatientTherapyServicesMedicaresperbeneficiaryspendingonoutpatienttherapyservicesinFloridas

MiamiDadeCountywasthreetimesthenationalaveragein2009.

Weidentified20highutilizationcountiesthathad,in2009,(1)thehighestaverage

Medicarepaymentperbeneficiaryand(2)morethan$1millionintotalMedicare

paymentsforoutpatienttherapy.WeanalyzedMiamiDadeCountyseparatelyfrom

theother19countiesbecauseithadthehighestaverageMedicarepaymentsper

beneficiaryamongthehighutilizationcountiesandthehighesttotalMedicare

paymentsforoutpatienttherapyin2009.Medicaresperbeneficiaryspendingon

outpatienttherapyservicestothe19otherhighutilizationcountiesasagroupwas

72percent

greater

than

the

national

average.

We

found

that

for

five

of

six

questionablebillingcharacteristicsthatmayindicatefraud,MiamiDadeslevels

wereatleastthreetimesthenationallevels. Theother19countiesalsoexhibited

questionablebilling.Asagroup,theother19countieshadatleasttwicethenational

levelsforfiveofthesixquestionablebillingcharacteristics.

WerecommendthatCMS(1)targetoutpatienttherapyclaimsinhighutilization

areasforfurtherreview,(2)targetoutpatienttherapyclaimswithquestionable

billingcharacteristicsforfurtherreview,(3)reviewgeographicareasandproviders

withquestionablebillingandtakeappropriateactionbasedonresults,and(4)revise

thecurrenttherapycapexceptionprocess. CMSconcurredwiththe

recommendations.Questionable

Billing

for

Medicare

Outpatient

Therapy

Services.


Medicare > PartAandPartB >MedicalEquipmentandSupplies > DiabeticTestingStrips


MedicareMarketSharesofMailOrderDiabeticTestingStripsWefoundthatsupplierssubmittedclaimsforatleast75typesofmailorderdiabetic

testingstripsduringthe3monthperiodendingDecember2009.Weprojectedthat

2typesaccountedforapproximately26percentoftheMedicaremailordermarket

share,7typesaccountedforapproximately50percent,and19typesaccountedfor

approximately81

percent.

Section154(d)(3)(B)oftheMedicareImprovementsforPatientsandProvidersAct

(MIPPA)requiresOIGtocompletethisreviewtodeterminemarketsharesof

diabetictestingstrips.MIPPArequiresthatfutureroundsofCompetitiveBidding

Programcontractsformailorderdiabetictestingstripsbeawardedtosupplierswho

provideatleast50percent,byvolume,ofalltypesofmailorderdiabetictesting

strips(theMIPPA50percentrequirement). Ourfindingsmayhelpindetermining


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whetherfutureroundsofsuppliersmailorderdiabeticteststripbidscomplywith

theMIPPA50percentrequirement. Ourreportprovidedthedatarequestedby

MIPPAbutdidnotmakerecommendations.MedicareMarketSharesofMailOrder

DiabeticTestingStrips. OEI041000130. FullReport

Medicare>Part

A

and

Part

B

>Medical

Equipment

and

Supplies

>Blood

Glucose

Test

Strips

and

Lancets

MedicareClaimsforHomeBloodGlucoseTestStripsandLancetsWeestimatedthatabout$169.7millioncouldhavebeensavedforCY2007had

controlsbeeninplaceatfourMedicareadministrativecontractorstoensurethat

claimsforbloodglucoseteststripsand/orlancetscompliedwithcertainMedicare

documentationrequirements.

MedicarePartBcoversteststripsandlancetsthatphysiciansprescribefordiabetics.

Medicareutilizationguidelinesallowupto100teststripsand100lancetsevery

monthfor

insulin

treated

diabetics

and

every

3months

for

non

insulin

treated

diabetics.Additionalrequirementsapplyforreimbursementsofclaimsfor

quantitiesofteststripsandlancetsthatexceedtheutilizationguidelines(referredto

ashighutilizationclaims).

TohelpachievepotentialsavingsfortheMedicareprograminthefuture,we

recommendedthatthecontractors(1)implementsystemeditstoidentifyhigh

utilizationclaimsforteststripsand/orlancetsandworkwithCMStodevelopcost

effectivewaysofdeterminingwhichclaimsshouldbefurtherreviewedfor

compliancewithMedicaredocumentationrequirements;(2)implementsystemedits

toidentifyclaimsforteststripsand/orlancetsthathaveoverlappingservicedates

forthesamebeneficiary;and(3)enforceMedicaredocumentationrequirementsfor

claimsforteststripsand/orlancetsbyidentifyingdurablemedicalequipment(DME)

supplierswithahighvolumeofhighutilizationclaims,performingprepayment

reviewsofthosesuppliers,andreferringthemtotheOIGorCMSforfurtherreview

orinvestigationwhennecessary. Followingarethecontractornamesandaudit

reporttitlesandnumbersforourreviews.

NationalGovernmentServices,Inc. ReviewofMedicareClaimsforHomeBloodGlucoseTestStripsandLancetsDurableMedicalEquipmentMedicareAdministrative

ContractorforJurisdictionB.A090800044. FullReport

CIGNAGovernmentServices,LLCandPalmettoGovernmentBenefitsAdministrators,LLC. ReviewofMedicareClaimsforHomeBloodGlucoseTestStrips

andLancetsDurableMedicalEquipmentMedicareAdministrativeContractorfor

JurisdictionC.A090800045. FullReport


NoridianAdministrativeServices,LLC. ReviewofMedicareClaimsforHomeBloodGlucoseTestStripsandLancetsDurableMedicalEquipmentMedicareAdministrative

ContractorforJurisdictionD.A090800046. FullReport
http://oig.hhs.gov/oei/reports/oei-04-10-00130.pdfhttp://oig.hhs.gov/oei/reports/oei-04-10-00130.pdfhttp://oig.hhs.gov/oei/reports/oei-04-10-00130.pdfhttp://oig.hhs.gov/oei/reports/oei-04-10-00130.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800046.pdfhttp://oig.hhs.gov/oas/reports/region9/90800045.pdfhttp://oig.hhs.gov/oas/reports/region9/90800044.pdfhttp://oig.hhs.gov/oei/reports/oei-04-10-00130.pdf


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PartBPrescriptionDrugs

Medicare > PartAandPartB > PartBPrescriptionDrugs > PaymentCalculations


MedicarePaymentsforNewlyAvailableGenericDrugsMedicareanditsbeneficiariescouldhavesavedanestimated$111millionhad

paymentamountsreflectedactualsalespricesduringtheinitialperiodinwhich

16genericdrugsbecameavailable.

Thepotentialsavingsaccountfor25percentoftotalexpendituresforthedrugs

duringthesameperiod.Wefoundthatduringtheperiodofinitialgeneric

availability,genericversionsofthesedrugswerebeingadministeredordispensed

tobeneficiaries,butMedicarewasstillpayingbrandprices.Manufacturersare

requiredtosubmitaveragesalesprice(ASP)datatoCMSwithin30daysafterthe

closeofeachquarter,andthosedataareusedtocalculatethepaymentamountsfor

thefollowing

quarter.

As

aresult,

there

is

atwo

quarter

lag

between

the

point

at

whichdrugsalesoccurandwhenthepaymentamountsreflectthosesales. Thislag

isespeciallyproblematicwhennewlyavailablegenericdrugsenterthemarket

becausetheirASPsareoftensubstantiallylowerthantheirbrandcounterparts;

however,paymentamountsremainatthehigherbrandlevelfortwoquartersor

more.AccordingtotheFoodandDrugAdministration(FDA),26ofthe48brand

onlydrugswiththehighestPartBexpendituresin2008couldhavefirstgeneric

versionsapprovedinthenextseveralyears,meaningthatthevulnerabilityposedby

thetwoquarterlaglikelywillcontinuetogrow.

WerecommendedthatCMSworkwithCongresstorequiremanufacturersoffirst

genericsto

submit

monthly

ASP

data

during

the

period

of

initial

generic

availability.

ThiscouldsubstantiallyreducethetwoquarterlagandmakeMedicarepayment

amountsmorereflectiveofmarketprices. IfCMSfindsthistobeaneffectivemeans

foralleviatingthefinancialimpactofthetwoquarterlag,itcouldconsiderrequiring

monthlyASPsubmissionsforallPartBcovereddrugs. CMSdidnotconcurwith

ourrecommendation,citingpotentialproblemswithmanufacturerprice

submissionsandincreasedadministrativeburdensunderaproposedmonthlyASP

reportingrequirement.Wemaintainthatthesavingsfromareducedreimbursement

lagmayoutweighanyissuesinvolvedwithimplementingamonthlyASPreporting

system.MedicarePaymentsforNewlyAvailableGenericDrugs. OEI030900510.

Full

Report


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Medicare > PartAandPartB > PartBPrescriptionDrugs > PaymentCalculations

ComparisonofAverageSalesPricesandAverageManufacturerPrices:ImpactonMedicareReimbursementofPartBPrescriptionDrugs

TheSocialSecurityAct,1847A(d),requiresOIGtocompareASPstoaverage

manufacturersprices

(AMP)

and

notify

the

Secretary

of

HHS

if

the

ASP

for

a

particulardrugexceedsthedrugsAMPbyathresholdof5percent. Ifthe5percent

thresholdismet,pursuanttosection1847A(d)(3)(A),theSecretarymaydisregardthe

ASPforthedrugwhensettingreimbursementandshallsubstitutethepayment

amountwiththelesserofeitherthewidelyavailablemarketpriceor103percentof

theAMP.AlthoughCMShasyettomakeanychangestoPartBdrugreimbursement

asaresultofthereviews,theagencypublishedaproposedruleat75Fed.Reg.

40040,40259(July13,2010)thatspecifiedcircumstancesunderwhichAMPbased

pricesubstitutionswouldoccur. However,theagencyoptednottofinalizetheprice

substitutionpolicyfromtheproposedrule. SomeofOIGspreviousreports

comparingASPs

and

AMPs

have

contained

recommendations,

which

we

continue

to

support.Wedidnotmakeadditionalrecommendationsinthereportsbelow.

FirstQuarter2010: ImpactonThirdQuarter2010.Weidentified38HCPCScodeswithASPthatexceededAMPbyatleast5percentinthefirstquarterof

2010. Ofthese,13hadcompleteAMPdata(i.e.,AMPdataforeverydrug

productthatCMSusedtoestablishreimbursementamounts). Ifreimbursement

amountsforall13codeswithcompleteAMPdatahadbeenbasedon103percent

oftheAMPsduringthethirdquarterof2010,weestimatethatMedicare

expenditureswouldhavebeenreducedbyabout$988,000inthatquarteralone.

IfCMSsproposedpricesubstitutionpolicyhadbeenineffect,reimbursement

amountsfor

10

of

the

13

drugs

with

complete

AMP

data

would

have

been

reduced,resultinginestimatedsavingsof$840,000inthethirdquarterof2010.

WecouldnotcompareASPsandAMPsfor68HCPCScodesbecauseAMPdata

werenotsubmittedforanyofthenationaldrugcodes(NDC)thatCMSusedto

calculatereimbursement.Manufacturersfor23percentoftheseNDCshad

Medicaiddrugrebateagreementsandwerethereforegenerallyrequiredto

submitAMPs. OIGwillcontinuetoworkwithCMStoevaluateandpursue

appropriateactionsagainstthosemanufacturersthatfailtosubmitrequireddata.

ComparisonofFirstQuarter2010AverageSalesPricesandAverageManufacturer

Prices: ImpactonMedicareReimbursementforThirdQuarter2010. OEI031000440.

FullReport


SecondQuarter2010: ImpactonFourthQuarter2010.Weidentified25HCPCScodeswithASPsthatexceededAMPsbyatleast5percentinthesecondquarter

of2010. Ofthese,10hadcompleteAMPdata(i.e.,AMPdataforeverydrug

productthatCMSusedtoestablishreimbursementamounts). Ifreimbursement

amountsforall10codeswithcompleteAMPdatahadbeenbasedon103percent

oftheAMPsduringthefourthquarterof2010,weestimatethatMedicare
http://oig.hhs.gov/oei/reports/OEI-03-10-00440.pdfhttp://oig.hhs.gov/oei/reports/OEI-03-10-00440.pdfhttp://oig.hhs.gov/oei/reports/OEI-03-10-00440.pdfhttp://oig.hhs.gov/oei/reports/OEI-03-10-00440.pdfhttp://oig.hhs.gov/oei/reports/OEI-03-10-00440.pdf


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expenditureswouldhavebeenreducedby$713,000inthatquarteralone.We

couldnotcompareASPsandAMPsfor54HCPCScodesbecauseAMPdatawere

notsubmittedforanyoftheNDCsthatCMSusedtocalculatereimbursement.

Manufacturersfor16percentoftheseNDCshadMedicaiddrugrebate

agreementsandwerethereforegenerallyrequiredtosubmitAMPs. OIGwill

continueto

work

with

CMS

to

evaluate

and

pursue

appropriate

actions

against

thosemanufacturersthatfailtosubmitrequireddata. ComparisonofSecond

Quarter2010AverageSalesPricesandAverageManufacturerPrices: Impacton

MedicareReimbursementforFourthQuarter2010. OEI031100030.

FullReport

Medicare > PartAandPartB > PartBPrescriptionDrugs > InhalationDrugs

QuestionableBillingforBrandNameInhalationDrugsMedicarepaymentstoSouthFloridasuppliersfortheinhalationdrugbudesonide

werereduced

by

almost

half

after

Medicare

implemented

autilization

edit

for

the

druginSeptember2008.However,thedecreaseswereoffsetbypaymentsforthe

inhalationdrugarformoterol(forwhichtherewasnoedit),whichthenmorethan

doubledwithin6months.MedicarepaidSouthFloridasuppliersforupto10times

moreunitsofarformoterolthanweredistributedforsaleinthegeographicarea.

Thesubstantialdifferencebetweenthesalesdataprovidedbyarformoterols

manufacturerandtheclaimsdataforSouthFloridasupplierssuggeststhatthese

supplierswerebillingfordrugsthatmaynothavebeenactuallypurchased.

WerecommendedthatCMS(1)requireDMEcontractorstoimplementutilization

edits

in

high

fraud

areas

as

soon

as

Medicare

begins

paying

for

a

brand

name

drug,

(2)monitorutilizationchangesamongbrandnameinhalationdrugs,(3)strengthen

initialclaimreviewprocessestofocusonpreventionofimproperpayments,and

(4)performsitevisitsandrequestdocumentationtosupportbudesonideand

arformoterolbillingsfromtheSouthFloridasuppliersthatwewillreferforfurther

review. CMSconcurredwithourrecommendations;however,theconcurrencewith

ourfirstrecommendationincludedthecaveatthatcertainprocedures,suchas

developingandissuingalocalcoveragedetermination,wouldneedtobefollowed

beforeimplementingedits. QuestionableBillingforBrandNameInhalationDrugsin

SouthFlorida. OEI030900530. FullReport

Medicare > PartAandPartB > PartBPrescriptionDrugs >HospitalBasedOutpatientPrescription

Drugs


PaymentforDrugsundertheHospitalOutpatientProspectivePaymentSystem

WefoundthatMedicarepaymentswere31percenthigherthanacquisitioncosts

amongrespondinghospitalsthatparticipateinthePublicHealthServiceActsection


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340Bdrugpricingprogram(340BProgram)and1percenthigherthanacquisition

costsamongrespondingnon340Bhospitalsforselectedseparatelypayabledrugs.

The340BProgram,whichisoverseenbytheHealthResourcesandServices

Administration(HRSA),wascreatedtoassistentitiesthatprovideservicesto

disproportionatelylowincome,uninsured,andunderinsuredpopulationsandallow

themtopurchasedrugsatreducedprices. Underthe340BProgram,pharmaceutical

manufacturersagreetochargeatorbelowstatutorilydefinedprices,knownasthe

340Bceilingprices,forcertainsalestocertaincoveredentities.

ThehospitalOutpatientProspectivePaymentSystem(OPPS)wasimplementedto

payhospitalsforPartBoutpatientservicesincluding,butnotlimitedto,certain

PartBcovereddrugs. TheOPPSpaymentfordrugsisgenerallydividedintotwo

categories:separatelypayabledrugsandpackageddrugs. Formorethanhalfofthe

selecteddrugs,Medicarepaymentsexceedednon340Bhospitalacquisitioncosts.

Fortheremainingdrugs,Medicarepaymentswerebelowaveragenon340B

acquisition

costs

by

between

0.6

and

11

percent.

This

report

did

not

contain

recommendations. PaymentforDrugsUndertheHospitalOutpatientProspective

PaymentSystem. OEI030900420. FullReport

MedicarePartAandPartBAdministration

Medicare > PartAandPartB > Administration > ProgramIntegrity > PaymentSuspensions


UseofPaymentSuspensionstoPreventInappropriateMedicarePaymentsWefoundthatCMSusedpaymentsuspensionsin2007and2008almostexclusively

asatool

to

fight

fraud,

though

the

sanction

is

available

in

overpayment

circumstancesshortoffraud,andthatCMSsguidanceonpaymentsuspensionsto

itscontractorshasincompleteorinconsistentrequirements. Inparticular,guidance

lacksspecificityintermsofthetypesofinformationthatitscontractorsshould

submitwitharequestforasuspension,aswellasindescribingthecircumstancesin

whichanextensionispermitted.

Afterwecollecteddataforthisevaluation,theAffordableCareActestablishednew

provisionsforpaymentsuspensions. TheAffordableCareActstatesthata

providerspaymentsmaybesuspendedbasedonacredibleallegationoffraud,

unlessthereisgoodcausenottosuspendsuchpayments. Thestatutealsorequires

CMSto

consult

with

OIG

in

determining

whether

acredible

allegation

of

fraud

exists. OnSeptember23,2010,CMSissuedproposedregulationsat75Fed.Reg.

58204,58239(Sept.23,2010)fortheseprovisions. Infinalizingtheregulationsand

developingrelatedguidance,CMScouldalsoaddresstheinconsistenciesthatthis

reportidentified. Thereportdidnotcontainrecommendations. TheUseofPayment

SuspensionsToPreventInappropriateMedicarePayments. OEI010900180. FullReport
http://oig.hhs.gov/oei/reports/oei-03-09-00420.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00420.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00420.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00420.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00180.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00180.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00180.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00180.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00180.pdfhttp://oig.hhs.gov/oei/reports/oei-03-09-00420.pdf


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Medicare > PartAandPartB > Administration > ProgramIntegrity

MedicareandMedicaidFraudandAbuseTraininginMedicalEducationDespitelackofaFederalrequirement,44percentofmedicalschoolsand68percent

ofinstitutionsofferingresidencyandfellowshipprogramsreportedproviding

instructionto

students

and

participants

on

compliance

with

Medicare

and

Medicaid

fraudandabuselawsin2010.

Almostallthemedicalschoolsandinstitutionsofferingresidencyandfellowship

programsthatwereviewedexpressedinterestinreceivingOIGprovided

instructionalmaterialsrelatingtoMedicareandMedicaidfraudandabuse.Most

respondentsexpressedinterestspecificallyinmoreinformationaboutthecivilFalse

ClaimsAct(FCA),theantikickbackstatute,andthephysicianselfreferralstatute.

Accordingly,OIGdecidedto(1)prepareeducationalmaterialsappropriatefor

medicalschoolsandinstitutionsofferingresidencyandfellowshipprograms,

(2)

distribute

the

materials

to

those

medical

schools

and

institutions

that

sponsor

residencyandfellowshipprograms,and(3)seekfeedbackfromthemedicalschools

andinstitutionsofferingresidencyandfellowshipprogramsonwaystoimprovethe

materials.MedicareandMedicaidFraudandAbuseTraininginMedicalEducation.


Medicare > PartAandPartB > Administration > QualityImprovementOrganizations


QualityImprovementOrganizationsFinalResponsestoBeneficiaryComplaints

Ourreview

covering

August

1,

2008,

through

December

31,

2009,

showed

that

most

QualityImprovementOrganizations(QIO)responsestobeneficiarycomplaintsare

meetingapplicablestandardsandCMSsadditionalcriteriathatapplywhenthe

involvedpractitionersprovideconsentfordisclosure.

CMScontractswithQIOs,which,amongotherresponsibilities,reviewwritten

complaintsfromMedicarebeneficiariesaboutthequalityofcarethebeneficiaries

receivedand,attheconclusionofsuchreviews,sendtothebeneficiariesfinal

responsessummarizingthefindingsofthereviews.Wefoundthatofthe120QIO

finalresponsestoMedicarebeneficiariescomplaintsthatwereviewedindetail,

116metrequirements.However,wefoundthatQIOsdonotobtainconsentfor

disclosurefrom

almost

half

of

the

practitioners

involved.

Medicare

regulations

allowpractitionerstorefusetogiveconsenttotheQIOsreleaseofinformationin

finalreportsthatidentifythem.Wemadenorecommendationsbasedonthis

review. QualityImprovementOrganizationsFinalResponsestoBeneficiaryComplaints.

http://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdfhttp://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdfhttp://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdfhttp://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00620.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00620.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00620.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00620.pdfhttp://oig.hhs.gov/oei/reports/oei-01-09-00620.pdfhttp://oig.hhs.gov/oei/reports/OEI-01-10-00140.pdf


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Medicare > PartAandPartB > Administration > ProgramInegrity > ErrorProneProviders

UseofMedicareFeeforServiceErrorRateDataToIdentifyandFocusonErrorProneProviders

AlthoughMedicarepaymentcontractorsdevelopedcorrectiveactionsbasedon

availableerror

rate

data,

they

typically

did

not

focus

on

error

prone

providers

for

reviewandcorrectiveaction.

UsingthereportederrorratedatafromtheHospitalPaymentMonitoringProgram

andtheComprehensiveErrorRateTesting(CERT)programforfiscalyears(FY)2005

through2008,weidentified740errorproneproviders. Theseprovidersaccounted

forasignificantportionofthetotaldollarsinerrorinthesampledyears. Focusing

onerrorproneprovidersforcorrectiveactionandrepaymentofimproperpayments

couldimprovetheeffectivenessofCMSseffortstoreduceimproperpayments.

WerecommendedthatCMS(1)useavailableerrorratedatatoidentifyerrorprone

providers,(2)

require

error

prone

providers

to

identify

the

root

causes

of

claim

errorsandtodevelopandimplementcorrectiveactionplans,(3)monitorprovider

specificcorrectiveactionplans,and(4)shareerrorratedatawithitscontractorsto

assistinidentifyingimproperpayments. CMSconcurredwithour

recommendations. CentersforMedicare&MedicaidServicesUseofMedicareFeefor

ServiceErrorRateDataToIdentifyandFocusonErrorProneProviders.


Medicare > PartAandPartB > Administration > ProgramIntegrity >Hotline

ComplaintsReceivedThroughthe1800HHSTIPSHotlineOurreviewrevealedthatasofMarch2010,CMShadresolvedorclosed

administratively88percentofthecomplaintsitreceivedduringthefirst6monthsof

2008fromthe1800HHSTIPShotline. CMSandcontractorstaffreportedtheneed

forwrittenguidanceforprocessinghotlinecomplaints.

WerecommendedthatCMS(1)issuewrittenguidancetoitsownstaffand

contractorstaffforprocessinghotlinecomplaintsand(2)upgradeitsinformation

systemforprocessingcomplaints. CMSconcurredwithourrecommendations.

CMSsProcessingofComplaintsReceivedThroughthe1800HHSTIPSHotline.


Medicare > PartAandPartB > Administration > ProgramIntegrity > In

Office of Inspector General Semiannual Report To Congress Spring 2011l

Documents