Kusserow on Compliance: OIG warns board of consequences for failing to meet compliance oversight responsibilities

CIAs are rapidly changing with additional provisions that include Board members

Upcoming webinar will address the full range of changes in CIAs

At the Health Care Compliance Association (HCCA) conference just concluding, the HHS Office of Inspector General (OIG) warned that in working out terms and conditions of a Corporate Integrity Agreement (CIA), the OIG will look for evidence of whether the Board was actively involved in oversight of the compliance program. If it determines that the Board was derelict in meeting its fiduciary responsibilities, the OIG will consider that a contributing factor that led to the need for government intervention. The weaker the Board oversight, the more stringent the requirements that are placed on the Board in the settlement agreement. In cases where the OIG finds that the Board has not been providing the proper oversight of the compliance program, the OIG will add mandates for personal certifications of Board members regarding the compliance program that includes mandated certifications by individual Board members on the effectiveness of the program. To ensure that Boards are attentive to this responsibility, the OIG may require the Board to engage a Compliance Expert to assist in meeting the Board’s obligations and the report made part of each Annual Report filing. These provisions place a heavy personal burden on Boards. Furthermore, CIAs often include a stipulated penalty for non-compliance with deadlines, as well as $50,000 penalties for each false certification that may also implicate the False Claims Act.

For 20 years, the OIG has been calling for a “top-down” compliance program, beginning at the Board level, that includes issuing White Papers, such as “Practical Guidance for Health Care Governing Boards on Compliance Oversight,” and emphasizing holding Boards more accountable for proper oversight of compliance within organizations. Language from these pronouncements about Board obligations and use of Compliance Experts is now included in CIAs.

Tips for Compliance Officers

  1. Review OIG “White Papers” and new CIAs to lean what the OIG considers as best practices for boards
  1. Educate and warn the Board on their fiduciary obligations and personal consequences for failing to meet them.
  1. Suggest the Board include someone who is “compliance literate” that knows what questions to be asked and assess program effectiveness (e.g., compliance officer experience or a compliance consultant).
  1. Provide the Board with solid evidence concerning the operation of the compliance program, such as engaging a Compliance Expert to assess and evaluate the program and providing the Board with evidence of an active program and identifying opportunities for improvement.

Register now to attend a free webinar on Thursday, April 6, 2017 titled “Compliance Accountability: Lessons Learned from Implementing Corporate Integrity Agreements” and presented by Thomas Herrmann, JD, former Chief of the Litigation Branch for the OIG and Appellate Judge for Medicare Appeals, along with Carrie Kusserow, MBA, CHC, CHPC, CCEP, who has 15 years’ experience as a compliance officer and consultant. Both are experts on compliance programs, as well as meeting the terms and obligations of Corporate Integrity Agreements.

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.

HHS Inspector General testifies about management challenges

HHS Inspector General Daniel R. Levinson discussed management challenges relating to data and technology use, administration of grants and contracts, and safety and quality of care before Congress at a March 9, 2017, hearing.  Levinson testified before the House Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies about the need to both leverage and protect data, address vulnerabilities in grant program oversight, and improve quality of care and safety in various HHS programs. The Inspectors General of the Departments of Labor and Education and the Social Security Administration also testified at the hearing.

Levinson discussed the need to use data to enhance decision-making, despite issues arising from technical barriers, complex privacy and security laws, financial considerations, and other issues. He noted that neither HHS nor state agencies have complete or accurate data required to ensure that only trustworthy Medicaid providers enter the system, and noted that systems must allow HHS to identify problems before issuing inappropriate payments and engaging in “pay and chase” activities.  The OIG ranked Medicaid program oversight, including that related to improper payments and program integrity, as the second greatest management challenge facing HHS at the end of 2016.

The Inspector General also noted that grant- and contract-awarding agencies within HHS lack efficient methods for sharing information about “problematic grantees,” and consequently reduce HHS’ overall ability to assess applicant risks. Levinson also encouraged HHS to work with states to investigate program integrity activities for programs receiving federal funds to ensure that they are complying with all requirements. He noted that Child Care and Development Fund (CCDF) block grant recipients, for example, do not always meet background screening requirements for caregivers and that states do not always perform necessary program integrity activities with respect to grant recipients.

Finally, Levinson discussed the need to improve quality of care and safety.  He identified areas in which the Indian Health Service (IHS) must improve quality care in IHS hospitals, encouraged HHS to work with states to ensure that children covered by Medicaid receive required medical and dental services, and highlighted opportunities to reduce patient harm in institutional settings and with respect to hospice care. He also noted the challenges of combatting the opioid epidemic.

Levinson concluded by encouraging HHS to “redouble its efforts to implement pending OIG recommendations,” and referred representatives to the OIG’s Compendium of Unimplemented Recommendations, most recently updated in April 2016.

Florida hospital improperly billed Medicare almost $300,000 over two years

For over two years, University of Florida Health Jacksonville did not comply with Medicare billing requirements, due to inadequate billing controls. The noncompliance resulted in overpayments of at least $273,000, according to an audit by the HHS Office of the Inspector General (OIG).


The 695-bed not-for-profit hospital submitted 11,134 inpatient claims during the audit period (January 2013 through September 2014). Medicare paid the hospital $167 million on those claims. The OIG audit evaluated 1,305 inpatient claims that were potentially at risk for billing errors. From those claims, the OIG selected a random sample of 154 paid claims, totaling $1,964,826. Although the OIG determined that the hospital complied with billing requirements for the majority of the claims (133), the audit revealed that the hospital failed to comply with Medicare billing requirements for 21 claims, resulting in a net overpayment of $63,881 for the audit period. Based upon the sample, the OIG extrapolated that the hospital improperly received overpayments of at least $273,346 between January 2013 and September 2014.


For 19 of the 154 claims, the hospital billed incorrect diagnosis-related group (DRG) codes. For example, in one case, the hospital submitted a claim with a secondary diagnosis code 599.0 (urinary tract infection), despite the fact that the patient’s medical record indicated the patient had no signs or symptoms of a urinary tract infection. In other words, the hospital had no basis to assign code 599.0. The hospital attributed the billing mistakes to human error. The noncompliance related to the DRG codes accounted for the vast majority of the errors and led to net overpayments of $47,165.

When a patient is discharged from an acute care hospital and readmitted to the same hospital on the same day for symptoms related to the prior stay, the hospital is required to combine the original and subsequent stay into a single claim. The OIG determined that for 2 of the 154 audited claims, the hospital incorrectly billed Medicare for related discharges and readmissions that occurred on the same day. The hospital attributed the improper billing to human error.


The OIG recommended that the hospital:

  • refund the estimated $273,346 in overpayments to the Medicare program;
  • identify and return similar overpayments; and
  • strengthen billing and coding controls to ensure future compliance.



The hospital objected to the findings regarding 11 of 21 inpatient claims. Additionally, although the hospital acknowledged that human error contributed to the 10 other errors, there was “no evidence to support systemic coding or billing concerns.” The hospital also challenged the OIG’s authority to extrapolate a payment error rate.



Kusserow on Compliance: OIG reports Medicaid Fraud Control Units results for 2016

The HHS Office of Inspector General (OIG) is the designated Federal agency that oversees state Medicaid Fraud Control Units (MFCUs). It issued a report on their statistical results for 2016. MFCUs are charged with investigating and prosecuting patient abuse or neglect in nursing homes and hospitals, as well as in assisted living facilities. Seventy-five percent of MFCU funding comes from the federal government. The OIG administers the grant to each of the units, sets performance standards, reviews each state’s program, provides technical assistance identify best practices, and collects and analyzes statistics. There are MFCUs in 49 states and the District of Columbia with funding of $258,698,147. With a staffing of 1,965 investigators, auditors, and attorneys, they investigated 15,505 fraud cases and another 3,221 abuse and neglect cases. This resulted in 1,564 criminal convictions and 998 civil settlements. They also achieved a total $1,876,532,842 in monetary recoveries with $368,498,733 from criminal actions, $1,225,709,487 in civil settlements, and $282,324,622 from other actions.  MFCUs most often work their own cases without assistance from other agencies. The OIG works a lot of cases with the MFCUs and in 2016, these cases resulted in 312 indictments, 348 criminal actions, and 222 civil actions. These Medicaid cases–some of which also involved Medicare–resulted in almost $3 billion dollars in expected recoveries.

The results of individual units can be found in the OIG report, along with a more detailed statistical breakdown of data. For comparison in results, the OIG issued a detailed report for 2015, noting that the MFCUs achieved 1,553 convictions, 731 civil settlements and judgments, and $744 million in criminal and civil recoveries. In this report, the OIG provided a detailed breakdown of the types of cases and trending data.

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.