Kusserow on Compliance: GAO calls for CMS to mitigate program risks in managed care

·       Medicaid enrollment in managed care rose in three years from 35 to 55 million beneficiaries

·       $170 billion Medicaid managed care is half of total federal Medicaid expenditures

·       CMS is not doing enough to ensure accuracy in payments

 

Congress called for the Government Accountability Office (GAO) to conduct a study of the Payment Error Rate Measurement (PERM), which  measures the accuracy of capitated payments for managed care, including CMS’s and states’ oversight. Driving this inquiry was the rapid growth of Medicaid managed care enrollment, which increased by 56 percent in three years, jumping from covering 35 million beneficiaries to 54.6 million beneficiaries. Federal Medicaid managed care expenditures last year were $171 billion, almost half of the total for Medicaid. The GAO focused on weaknesses in oversight, given the recent rapid growth. The GAO reviewed program integrity risks reported in 27 federal and state audits and investigations over a five year period; federal regulations and guidance on the PERM; and the CMS’s Focused Program Integrity Reviews. The GAO also contacted program integrity officials in the 16 states with a majority of 2016 Medicaid spending for managed care. The GAO found:

  1. Ten of 27 federal and state audits and investigations identified about $68 million in overpayments and unallowable MCO costs, not accounted for by PERM estimates.
  2. Another investigation resulted in a $137.5 million settlement.
  3. CMS does not have a process to track managed care overpayments and cannot determine whether states considered those overpayments when they set capitation rates.
  4. CMS is not doing enough to ensure that states are adequately paying managed Medicaid companies and that the plans are making correct payments to providers.
  5. The managed care component of the PERM neither includes a medical review of services delivered to enrollees, nor reviews of MCO records or data.
  6. CMS and states have updated regulations, focused reviews, and used federal program integrity contractors’ audits of managed care services, however, some of this is only recent, and it may not fully address risks across all states.
  7. CMS does not ensure identification and reporting of overpayments to providers and unallowable costs by MCOs.

The GAO called for CMS to consider and take steps to mitigate the program risks that are not measured in the PERM, such as overpayments and unallowable costs. Such an effort could include actions such as revising the PERM methodology or focusing additional audit resources on managed care. The GAO also recommended CMS expedite the release of planned guidance and requirements for states to report to the CMS overpayments made between managed-care providers and plans.

 

 

 

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: DOJ Policy for continued antitrust enforcement DOJ

At the American Bar Association’s Anti-Trust in Healthcare Conference, Deputy Attorney General Barry Nigro provided a wide ranging presentation regarding DOJ efforts to combat rising health care fraud. He noted that, in 2016, health care spending in the United States accounted for $3.3 trillion, or $10,348 per person—approximately 18 percent of Gross Domestic Product (GDP). At this level of spending, the economy can ill afford fraudulent activity to increase the cost of health care. Inasmuch as health care involves critical care, it means the DOJ is giving it a higher priority. DOJ is continuing to give this area a priority that includes rigorous investigation and prosecution of those engaged in Medicare provider fraud and price gouging by drug makers. The DOJ will carry on with questioning mergers and potential collusion among health systems and payers. This includes market allocation agreements, price fixing, and naked market allocation. Some of the topical areas covered in his address included the following:

  1. Criminal prosecutions related to price fixing and market allocation agreements
  2. Parties circumventing generic drug regulations
  3. Market allocation and no-poach agreements
  4. Limitations on exemptions and immunities from anti-trust laws
  5. Continued reliance on the Clayton Antitrust Act
  6. Urging states to consider negative effect on competition when passing laws
  7. Support for certificate of need provisions
  8. Urging states to consider laws that impose occupational licensing requirements
  9. Professionals being able to advertise receiving board certification to patients

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Staffing of interim compliance officers

Serious risks arise when there is a gap in compliance officers. Not having someone managing the day to day compliance program is begging for problems. Filling a gap by having someone designated to manage the program until a permanent replacement is found is a bad idea. They likely will do as little as possible in an area they don’t know or could be expected to recognize and address problems in a timely and professional manner. Currently, on average, it takes a minimum of 3 to 5 months to find and bring on board a permanent replacement; and that is far too long to leave the program without active professional management. One solution to consider is using an expert as an interim compliance officer. Managed correctly, it can provide high-value service that is cost effective. Depending on the size and complexity of an organization, an expert may be able to manage the day-to-day operation and deal with emerging compliance issues at less than full time.

Kash Chopra, JD, MBA, has provided highly experienced and knowledgeable consultants as temporary and interim compliance officers to fill a compliance officer gap. Interim compliance officers can make significant improvements for any compliance program in a relatively short order. She noted among the benefits an interim compliance officer expert can bring to an organization is an objective assessment on the status of the program without being invested in any prior decisions. This added value of providing an independent compliance program effectiveness evaluation is a real bonus and this value by itself should save the cost of the engagement. Incorporating this in the terms of a temporary compliance officer engagement can produce the added benefit of gaining an independent assessment of the status of the program by outside experts that are independent. They can provide a road map action plan for the permanent office to improve program effectiveness. As far as the day-to-day management of the program, interim compliance officers bring the expertise in knowing how to respond to identified problems, as well as educating the Board and executive leadership on changes in the regulatory and enforcement environment. Her final advice on the use of the interim compliance officers is to remember that they are temporary compliance officers serving for a period of time until a permanent replacement can be found. As such, the agreement should set time frames of 60 to 90 days with the option to extend on a month to month basis.

For more information about engaging compliance experts to serve as Interim Compliance Officers, Chopra can be reached at KChopra@strategicm.com or (703) 535-1413.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Exit interviews as a compliance communication channel

Tom Herrmann, JD, had served in a senior capacity with the Office of Counsel to the Inspector General (OIG) at HHS. He pointed out that the OIG, in its compliance guidance, calls for the development of effective lines of communication with employees as very important to the successful implementation of a compliance program and the reduction of any potential for fraud, abuse and waste. This include implementation and use of hotlines (including anonymous hotlines), e-mails, written memoranda, newsletters, and other forms of information exchange to maintain these open lines of communication. One significant channel of communication is the use of exit interviews to debrief departing employees prior to their departure. A major factor influencing the advancement of exit interviews in connection with compliance programs has been the rise in the number of “whistleblowers.” Most of these come from people reporting on an organization they had recently left.  As such, there is great value in debriefing those departing the job that includes asking question about any observed violations of law, regulation, Code of Conduct, or policies. Optimally, an exit interview process should be done in time to permit possible remedial actions before they leave employment.  He has found that exit interviews can also be useful in avoiding other costly litigation involving unlawful harassment, discrimination, safety violations, etc.  It is very important to keep a record of the interviews conducted and responses.

Carrie Kusserow has been developing, enhancing and monitoring exit interview programs for over 15 years. She noted that many organizations conduct employee exit interviews (also called exit surveys) to gather data for improving working conditions and retaining employees. This has been common in human resource management for generations and this type of communication can be useful in taking actions to correct deficiencies, reduce turnover, identify potential compliance-related problems, and maintain a productive work environment. However, exit interviews may also be used to alert an organization to company compliance issues, potential whistle-blowers, or quality of care issues. At a minimum, an exit interview should include compliance program oriented questions that relate to compliance education, policies, anonymous reporting procedures, and attitudes towards the compliance program. The following are examples:

  1. How effective was your training on the compliance program, Code of Conduct and policies?
  2. Were you trained on how to report concern and problems confidentially or anonymously?
  3. Did you believe that those reporting compliance issues would be protected from retaliation?
  4. Are you aware of any ethical or compliance issues; and if so did you report them?
  5. How could the company strengthen its message regarding ethics and compliance?
  6. Is everyone in the work force treated fairly?
  7. Do you believe management fully supports the compliance program?
  8. Are you leaving due to any compliance concerns about your job or work environment?
  9. Are you aware of any improper or illegal conduct in the workplace? If so, who and what?
  10. Have you reported compliance issues or concerns that are unaddressed? If so, explain.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2018 Strategic Management Services, LLC. Published with permission.