Kusserow on Compliance: OIG proposed budget for 2018 cites accomplishments

The HHS OIG submitted their fiscal year (FY) 2018 proposed budget for a total of $359 million that includes $291 million to support oversight of the Medicare and Medicaid programs.  In justifying their request, the OIG reported expected recoveries of more than $5.66 billion for FY 2016 that includes $4.46 billion in investigative receivables and approximately $82 million in CMPs. The OIG’s work also prevents fraud and abuse through industry outreach and guidance and recommendations to HHS to remedy program vulnerabilities. Additionally, OIG reported on its role as a Health Care Fraud and Abuse Control (HCFAC) program participant in returning $5 to the Medicare Trust Funds for every $1 invested in FY 2016. The OIG reported 844 criminal actions against individuals or organizations that engaged in crimes against HHS programs and 708 civil and administrative enforcement actions, including False Claims Act lawsuits filed in Federal district court, and Civil Monetary Penalty (CMP) law settlements. The OIG excluded 3,635 individuals and organizations from participation in Federal health care programs. The OIG is also part of Health Care Fraud Strike Force teams that coordinate operations conducted jointly by Federal, State, and local law enforcement entities that resulted in filing of charges against 255 individuals or entities, 207 criminal actions, and $321 million in investigative receivables.

Over the last five years, the OIG’s expected recoveries have averaged $5.3 billion annually. Changes in the amount of expected recoveries from year to year are due to the particular mix of cases resolved in a given year, as well as continued efforts to work with operating divisions to implement OIG recommendations.

 

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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Billions in ‘transfers of value’ to physicians, hospitals by industry get DOJ attention

In calendar year (CY) 2015, over $7.5 billion in “transfers of value” were made by pharmaceutical companies to physicians and hospitals through the federal Open Payments program, which in turn has caused the Department of Justice (DOJ) to focus on this area while investigating fraud in the health care system. In an HCCA sponsored seminar titled “Sunshine, Open Payments, and Potential Conflicts of Interest,” Senior Compliance Executive C.J. Wolf, M.D., of Healthicity, noted that under the Open Payments program, CMS has now accumulated over 28 million records of transfer of value. Within this vast repository of data, CMS uses it to uncover outliers in payments, and as a result, industry and providers, alike, are very interested in how the open payment system affects their operations.

Open Payments

Under Section 6002 of the Affordable Care Act (ACA), manufacturers must disclose to CMS payments made to physicians and teaching hospitals. Manufacturers and group purchasing organizations must also report ownership and investment interests held by physicians. The HHS Office of Inspector General (OIG) included these aspects into its list of priorities in its 2017 Work Plan, with Medicare and Medicaid payments high on the list (see Focus remains on Medicare, Medicaid payments in 2017 OIG Work Plan, Health Law Daily, November 10, 2016).

The 2017 Work Plan also stressed that the OIG will also determine how much Medicare paid for drugs and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) ordered by physicians who had financial relationships with manufacturers and group purchasing organizations.

Wolf noted the DOJ has taken a keen interest in this area of open payments, as evidenced by actions such as Teva Pharmaceuticals USA, Inc., and its subsidiary IVAX, LLC, agreeing to pay a total of $27.6 million to the federal government and the State of Illinois in a settlement regarding allegations of false billing practices under the False Claims Act (see Teva Pharmaceutical to pay federal and state government $27.6 million to resolve false billing allegations, Health Law Daily, March 11, 2014).

Conflicts of interest

There are 11 payment “categories” that must be reported under the Open Payments program: (1) consulting fees, (2) honoraria, (3) gift, (4) entertainment, (5) food and beverage, (6) travel and lodging, (7) education, (8) charitable contribution, (9) royalty or license, (10) grant, and (11) research.

As part of the transparency initiatives under the ACA, the dollars that physicians receive from industry is reported and documented. Physicians and providers should be aware that these categories touch upon even compensation for serving as faculty or as a speaker for a non-accredited and noncertified continuing education program.

Because the Open Payments program also includes ownership interests that physicians or their immediate family members have in various companies and the data is then made available to the public each year, reporting often is paramount.

Kusserow on Compliance: HHS OIG reports on identified improper payments

In its Semi-Annual Report for 2017, the OIG announced that improper payments reported in the HHS financial statements have demonstrated a steady increase over the last several years. In FY 2016, HHS reported estimated improper payments of more than $96 billion. During the first half of 2017, the OIG issued a number audits that identified improper payments for a variety of reasons.

Eligibility Determinations

  1. Express Lane Eligibility. Under the express lane eligibility option, which allows States to expedite and simplify enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) by relying on findings from other agencies’ eligibility determinations, the OIG estimated that improper Medicaid payments on behalf of potentially ineligible beneficiaries totaled $284.1 million. CHIP payments for potentially ineligible beneficiaries totaled $10.6
  2. Payments after death. Medicare and Medicaid continued to make improper payments on behalf of beneficiaries who are deceased. During this reporting period, the OIG found that Florida did not always stop making capitation payments to Medicaid managed care organizations (MCOs) after a beneficiary’s death, resulting in more than $26 million in
  3. Incarcerated beneficiaries. The OIG continued its work reviewing inappropriate payments for incarcerated beneficiaries, recently reporting that CMS has not taken steps to recoup $34 million in potentially improper payments made on behalf of incarcerated

Improper Payments for Medical Devices and Services

  1. Chiropractic Services. Based on the OIG’s sample results, the agency estimated that $358.8 million (82 percent) of $438.1 million paid by Medicare for chiropractic services was
  2. Room and Board Costs Associated with HCBS Waiver Program Payments. State Agencies claimed at least $176 million in unallowable Medicaid reimbursements for services under the HCBS waiver
  3. Cochlear Devices. Medicare spent $2.7 million inappropriately for cochlear devices (hearing aid devices) that were replaced without cost to the hospital or

The OIG also reported that it has a body of work looking at situations where providers billed for goods and services at higher rates than allowed by program regulations. In this reporting period, the OIG looked at how a hospital’s reporting of inaccurate wage data affected Medicare payments for hospital services.

 

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.

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

Kusserow on Compliance: Summary of OIG fraud and abuse actions first half of 2017

The HHS OIG issued their Semi-Annual report for first half of fiscal year (FY) 2017 and summarized key accomplishments, significant problems, abuses, deficiencies, and investigative outcomes relating to the administration of HHS programs and operations that were disclosed during the reporting period. The following summarizes reported statistical accomplishments.

Criminal Actions (468). OIG reported 468 criminal actions against individuals or entities that engaged in crimes against HHS programs and 461 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters.  During the first half of FY 2017, OIG reported expected investigative recoveries of over $2.04 billion.

Health Care Strike Force (152 Criminal Actions). The Health Care Fraud Strike Force teams brought charges against 45 individuals or entities, 152 criminal actions, and $267 million in recoveries through investigations.

State Medicaid Fraud Control Units (MFCUs) (1,564 Criminal Actions).  The OIG has oversight responsibility for MFCUs and administers grants that provide federal funding for their operations. There are 50 MFCUs (in 49 States and the District of Columbia) totaled almost $259 million. The MFCUs employed 1,965 individuals. MFCUs reported 18,730 investigations, of which 15,509 were related to Medicaid fraud and 3,221 were related to patient abuse and neglect, including misappropriation of patients’ private funds. The cases resulted in criminal charges or indictments involving 1,721 individuals, including 1,249 for fraud and 472 for patient abuse and neglect. In total, 1,564 convictions were reported in FY 2016, of which 1,160 were related to Medicaid fraud and 404 were related to patient abuse and neglect. Civil judgments and settlements for FY 2016 totaled 998, and monetary recoveries in civil cases totaled over $1.5 billion. During this reporting period, OIG special agents partnered with MFCUs in conducting joint investigations on 714 criminal cases.

Program Exclusions (1,422). During this semiannual reporting period, OIG excluded 1,422 individuals and entities from Medicare, Medicaid, and other federal health care programs. Most of the exclusions resulted from convictions for crimes relating to Medicare or Medicaid, for patient abuse or neglect, or as a result of license revocation. OIG is also responsible for reinstating providers who apply and have met the requirements of their exclusions.

Sanction Authorities and Other Administrative Actions (1,504).  OIG sanctions include the exclusion of individuals and entities from federal health care programs and the imposition of CMPs for submitting false and fraudulent claims to a federal health care program or for violating the Anti-kickback statute, the Stark law, or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the patient dumping statute. During this semiannual reporting period, OIG imposed 1,504 administrative sanctions in the form of program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk to federal health care programs and their beneficiaries.

Civil Monetary Penalties Law (CMPL) ($26 million0. The CMPL authorizes OIG to impose administrative penalties on and assessments against a person who, among other things, submits, or causes to be submitted, claims to a federal health care program that the person knows, or should know, are false or fraudulent. In addition to administrative penalties and assessments, OIG can also exclude individuals for engaging in conduct prohibited by the CMPL. During this semiannual reporting period, OIG concluded cases involving more than $26.3 million in CMPs and assessments.

Self-Disclosure Programs ($23 million). Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for acceptance into the Provider Self-Disclosure Protocol, a program created in 1998, to voluntarily disclose self-discovered evidence of potential fraud. During this semiannual reporting period, self-disclosure cases resulted in more than $23 million in HHS receivables.

 

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.