OIG challenges industry to come up with an upgraded statistical sampling tool

CMS handles more than a trillion dollars in Medicare and Medicaid claims every year. Because not every claim can be scrutinized, statistical sampling is essential for effective oversight of these claims. The current sampling tool, RAT-STATS, was originally designed by the HHS Office of Inspector General (OIG) to give nonexperts a robust method for selecting statistically valid samples. It is the primary statistical tool for OIG’s Office of Audit Services. Although OIG does not require the use of RAT-STATS, many providers download the software and use it in their efforts to fulfill the claims review requirements for corporate integrity agreements or provider self-disclosure protocol.

The OIG has recently announced the launch of the Simple Extensible Sampling Tool Challenge (Challenge) to develop the foundation for an upgraded version of RAT-STATS. According to the OIG, while the current version of RAT-STATS is well validated, its user interface can be difficult to navigate and the underlying code makes the software costly to update. Therefore, the OIG needs a new, modern version of the software that is easy to use and can be extended in a cost-effective manner.


The RAT-STATS software was originally created in 1978 and has gone through several upgrades since then. Unlike a full statistical package that attempts to answer all types of questions for a wide range of users, RAT-STATS serves as a streamlined solution to handle the specific task of developing valid statistical samples and estimates within the health care oversight setting.

For example, an OIG investigator may pull a simple random sample in order to estimate damages for a provider suspected of fraud. RAT-STATS then generates valid pseudo-random numbers and outputs all of the information needed to replicate the sample. Once the investigator finishes reviewing the sample, he or she can then enter the results into RAT-STATS to get the final statistical estimate. While the investigator may need some basic training in statistics, they do not need the same level of expertise as would be required to navigate the many options available in a full-service statistical or data analysis package.

The Challenge

In order to complete the Challenge participants must create a software package that replicates the operation of four of the functions of the original RAT-STATS software: (1) single stage random numbers;
(2) unrestricted attribute appraisal; (3) unrestricted variable appraisal; and (4) stratified variable appraisal.

Teams of one or more members can participate in this Challenge. Each team must have a captain. Individual team members and team captains must register in accordance with the registration process set forth in the Federal Register notice.  The team captain is to serve as the corresponding participant
with OIG about the Challenge and to submit the team’s Challenge entry. While the OIG will notify all registered Challenge participants by email of any amendments to the Challenge, the team captain is expected to keep the team members informed about matters germane to the Challenge.

Submissions must meet all of the 20 rules and requirements outlined in the Federal Register notice. The technical specifications behind the four RAT-STATS functions along with 10 test datasets are available on the OIG website.

The Challenge began on September 28, 2016. The submission period runs from September 28, 2016, to May 15, 2017. The judging period runs from September 28, 2016, to June 15, 2017. A winner will be announced no later than July 1, 2017. The grand prize is $25,000.


Voters split on ACA, but most say Rx drug costs are unreasonable

The majority of Americans—including Democrats, Republicans, and independents—support several policy changes to control the cost of prescription drugs, according to a September 2016 Kaiser Family Foundation (KFF) Health Tracking Poll. The poll found, however, that Americans remain divided on whether the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) is working well, with 47 percent reporting an unfavorable view and 44 percent reporting a favorable one.

Drug costs

According to a KFF press release, the poll, taken between September 14 and 20, 2016, found that 77 percent of Americans view drug costs as unreasonable, up from 72 percent in an August 2015 poll, and only 21 percent seeing drug costs as reasonable. Despite these findings, the poll found that 73 percent of Americans say paying for their drugs is easy and 26 percent say it is difficult to pay for their drugs. The poll also found that the majority of Americans favor the following policies:

  • 82 percent favor allowing the federal government to negotiate with drug companies to get a lower price on medications for people on Medicare;
  • 78 percent favor limiting the amount drug companies can charge for high-cost drugs for illnesses like hepatitis or cancer;
  • 66 percent favor creating an independent group that oversees the pricing of prescription drugs;
  • 86 percent favor requiring drug companies to release information to the public on how they set drug prices; and
  • 71 percent favor allowing Americans to buy prescription drugs imported from Canada.

The poll, however, also found that only 47 percent of Americans favor eliminating drug advertisements and 42 percent favor encouraging people to buy lower cost drugs by requiring them to pay a higher share if they choose a similar, higher cost drug.

Views of the ACA

Not surprisingly, the poll found that a Democrats largely support the ACA, Republicans largely oppose it, and independents lean unfavorable. When asked if the health insurance marketplace in their own state is working well, 48 percent said it was, while 43 percent said it was not. However, when asked if the marketplaces were working well nationally, the percent responding no grew to 49 percent.

The poll also asked an interesting question regarding the public’s awareness of the uninsured rate under the ACA. When asked if the uninsured rate was at an all-time high or low, only 26 percent knew it was at an all-time low, while 21 percent thought it was at an all-time high. Thirty-eight percent of Democrats and those who thought favorably of the ACA were aware of that the uninured rate was at an all-time low. Only 17 percent of Republicans and those who thought unfavorably of the ACA were aware that the uninsured rate was at an all-time low. Twenty-seven percent of independents were aware that it was at an all-time low.

Voting factors

Finally, in polling completed after the first presidential debate, 67 percent of voters say the candidate’s plan to address the future of the ACA is very important. The percentage of voters who say the candidate’s plan to address the following factors is important to their vote is as follows:

  • the cost of health insurance premiums (60 percent);
  • the cost of health insurance deductibles (55 percent);
  • prescription drug prices (51 percent);
  • the number of uninsured Americans (43 percent);
  • the ongoing opioid epidemic (43 percent); and
  • the Zika virus outbreak (26 percent).

Are employer wellness programs under attack by the EEOC?

Many employers or their group health insurance plans offer wellness programs to promote healthier lifestyles for their employees. These employer wellness programs (EWPs) often involve medical questionnaires, health risk assessments (HRAs), and weight, cholesterol, glucose and blood pressure screenings. Some employer and group health insurance plans offer financial and other types of incentives to participating employees or to those who achieve certain targeted health outcomes.

Until 2014, it seems to have been clear sailing for employers on the EWP front as long as they complied with certain federal nondiscrimination provisions. In 2014, however, the U.S. Equal Employment Opportunity Commission (EEOC) starting filing lawsuits against employers alleging that their EWPs were not voluntary as required by Title I of the Americans with Disabilities Act (ADA). While the courts have uniformly ruled in favor of the employers in these cases, the EEOC, nevertheless, proceeded to propose new regulations under the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA) that imposed new standards and ignored an existing ADA “safe harbor” provision for bona fide employer benefit plans. Despite both Congressional concerns and numerous industry comments asking the EEOC to align its new ADA and GINA final rules with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191) and the HIPAA privacy and security breach notification requirements, with which employers had worked so hard to comply, the final rules made no concessions to these concerns.

This White Paper first examines the federal law applicable to EWPs, the recent court challenges by the EEOC, the new ADA and GINA final rules, and the status of proposed legislation to void the rules. It closes by providing the results of a Q&A session with industry experts and advice on what employers should do to ensure that their EWPs pass muster with the new EEOC rules, both applicable on January 1, 2017.

Read further, “Are employer wellness plans under attack by the EEOC?

FDA warns 55 retailers about e-cigarette, e-liquid, and cigar sales to minors

Warning letters for selling newly regulated tobacco products, such as e-cigarettes, e-liquids, and cigars, to minors have been issued by the FDA’s Center for Tobacco Products against 55 tobacco retailers. The announcement of these warning letters comes approximately one month after the August 8, 2016 effective date of the Final rule (81 FR 28973, May 10, 2016) extending the FDA’s authority over all tobacco products, and making it illegal to sell e-cigarettes, cigars, hookah tobacco, and other newly regulated tobacco products to anyone under age 18 in person and online, and requiring retailers to check the photo ID of anyone under age 27 (see FDA clears the air, ‘deems’ e-cigarettes, hookah tobacco, cigars worthy of regulation, Health Law Daily, May 10, 2016).

Before the Final rule, there were no federal regulations prohibiting retailers from selling e-cigarettes, hookah tobacco, or cigars to people under age 18. The Final rule contains the following restrictions:

  • not allowing products to be sold to persons under the age of 18 years (both in person and online);
  • requiring age verification by photo ID;
  • not allowing the selling of covered tobacco products in vending machines (unless in an adult-only facility); and
  • not allowing the distribution of free samples.

The warning letters were issued after compliance checks of major retail chains, tobacco specialty stores and online retailers found that minors were able to purchase some of the newly regulated tobacco products in a variety of youth-appealing flavors, including bubble gum, cotton candy, and gummy bear. The results from compliance check inspections of tobacco retailers are available in a searchable retailer inspection database. The database lists which inspected retailers received a warning letter, a civil money penalty, a NTSO, or were found to have no observable violations.

The FDA usually issues warning letters to brick-and-mortar retailers as well as online retailers and manufacturers the first time a tobacco compliance check inspection reveals a violation of the federal tobacco laws. Failure to promptly and adequately correct all violations and ensure compliance with all applicable laws and regulations may lead to FDA enforcement actions, including civil money penalties and no-tobacco-sale orders (NTSOs).

Under applicable compliance and enforcement rules, the FDA may pursue a NTSO against retailers that have a total of five or more repeated violations of certain restrictions within 36 months. Retailers are prohibited from selling regulated tobacco products at the specified location during the period of the NTSO. Retailers who receive an NTSO complaint from the FDA may either enter into a settlement agreement with the agency that results in a final order issued by the administrative law judge (ALJ) or choose to go to a full hearing before an ALJ.