Kusserow on Compliance: Huge fraud schemes involving telemedicine and DME

– Charges against two dozen people involving over $1.2 billion

 – Administrative Action against 130 DMEs submitting $1.7 Billion in claims

The DOJ announced charges against 24 defendants—including the CEOs, COOs, and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies, and three licensed medical professionals—associated with health care fraud schemes involving more than $1.2 billion. CMS and the Center for Program Integrity (CPI) have taken adverse administrative action against 130 DME companies that had submitted over $1.7 billion in claims and were paid over $900 million. The scheme involved payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist, and knee braces that were medically unnecessary.

The DOJ alleges those charged with paying doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. The proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts, and luxury real estate in the United States and abroad. Some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity. The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these Medicare beneficiaries. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders. Finally, the international call center sold the DME orders that it obtained from the telemedicine companies to DME companies, which fraudulently billed Medicare. Collectively, the CEOs, COOs, executives, business owners and medical professionals involved in the conspiracy are accused of causing over $1 billion in loss.

 

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 © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: New OIG Work Plan items

The HHS Office of Inspector General (OIG) recently issued updates to its Active Work Plan (Work Plan). The Work Plan outlines ongoing and planned audits and evaluations for the fiscal year and beyond. Recent additions related to Medicare/Medicaid include the following:

  1. Medicare Part D Rebates Related to Drugs Dispensed by 340B Pharmacies. Drug manufacturers often do not pay for Medicare Part D prescription rebates filled at 340B-covered entities and contract pharmacies because the manufacturer already provides a discount on the drug. The OIG will conduct a study to determine the potential rebate savings if Part B program sponsors and manufacturers could agree on eligible prescriptions filled at 340B pharmacies that receive rebates.

 

  1. Characteristics of Part D Beneficiaries at Serious Risk of Opioid Misuse or Overdose. An OIG data brief found that about 71,000 Medicare Part D beneficiaries were at serious risk of opioid misuse or overdose in 2017. The OIG will study: (1) the characteristics of these beneficiaries, including their demographics and diagnoses; (2) the opioid utilization of these beneficiaries; and (3) the extent to which these beneficiaries have had adverse health effects related to opioids and any overdose incidents.

 

  1. Ensuring Dual-Eligible Beneficiaries’ Access to Drugs Under Part D: Mandatory Review.

Part D plans that meet certain limitations have the discretion to include different Part D drugs and drug utilization tools in their formularies. Under the Affordable Care Act, the OIG conducts an annual study to review the extent to which Part D sponsors’ formularies include drugs commonly used by Medicaid and Medicare Part D beneficiaries.

 

  1. Nursing Facility Staffing: Reported Levels and CMS Oversight. CMS uses the Payroll Based Journal auditable daily staffing data to analyze staffing patterns and populate the staffing component of the Nursing Home Compare website. It aids the public determine the results of health and safety inspections, quality of care at nursing facilities, and staffing. The OIG will issue two reports to: (1) describe nursing staffing levels that facilities report to the Payroll-Based Journal; and (2) examine CMS efforts to ensure data accuracy and improve resident quality of care.

 

  1. Medicare Part B Payments for Podiatry and Ancillary Services. Medicare Part B covers podiatry services for medically necessary treatment of foot injuries, diseases, or other medical conditions affecting the foot, ankle, or lower leg. It does not cover routine foot-care services unless they are: (1) necessary and integral part of otherwise covered services; (2) for the treatment of warts on the foot; (3) in the presence of a systemic condition or conditions; or (4) for the treatment of infected toenails. The OIG will review Part B payments to determine whether podiatry and ancillary services were medically necessary and supported in accordance with Medicare requirements.

 

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 © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Most organizations reported encounters with government authorities

• Most organizations have made disclosures for HIPAA breaches and overpayments
• One third received demand letters
• Other encounters report were with OIG and DOJ

It is widely recognized that regulatory and legal enforcement activities have been increasing over the last few years. The results should be a warning bell to all compliance officers that regulators and enforcement officials are right around the corner, necessitating increased efforts on ongoing monitoring and auditing to mitigate exposure of compliance-related risk areas. In the soon to be released national healthcare “2019 Compliance Benchmark Survey” most respondents reported having encountered issues with government agencies in last five years. Ranking at the top, with nearly two-thirds of the respondents, was disclosure to the HHS Office for Civil Rights (OCR) for breaches of privacy under the Health Insurance Portability and Accountability Act (HIPAA). Over half reported making self-disclosures of overpayments received and addressing audits or investigations by government agencies. One-third reported responding to a demand letter from a government agency or contractor. Serious legal encounters with the government was reported at a much lower level.  One out of five respondents reported self-disclosure to the DOJ, OIG and CMS.  About one out of eight respondents reported their organization being involved in the settlement process with DOJ, self-disclosing to the OIG engagement of sanctioned individuals/entities, and being involved in a settlement process for a corporate integrity agreement (CIA).

The “2019 Compliance Benchmark Survey” report will be available without charge at the upcoming HCCA conference in Boston at Strategic Management Services, Booth 420. 

 

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 © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Measuring culture using compliance benchmark surveys

– Evidencing compliance program effectivenes

– Provides quantifiable compliance program effectiveness metrics

– Internally developed and administered surveys lack credibility

The Sentencing Commission in its Federal Sentencing Guidelines states that businesses must “promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” The OIG in its Compliance Program Guidance for Hospitals noted that “as part of the review process, the compliance officer or reviewers should consider techniques such as…using questionnaires developed to solicit impressions of a broad cross-section of the hospital’s employees and staff.”  Daniel Peake of the Compliance Resource Center explains that a culture survey can identify gaps between the compliance culture that is intended and the one that employees actually experience. Importantly, it can identify whether the investments in the compliance program and employee attitudes and perception are truly aligned.  Surveys of this type can measure employee perceptions regarding the day-to-day management behavior.  However, to be truly useful, the culture survey should be a professionally developed, tested, validated, and independently administered. It would be best if responses to the individual questions can be evaluated, analyzed, and benchmarked against a large universe of organizations that have used the same questions. This permits comparisons to industry peers and national averages. Using the same survey every couple of year can assist in benchmarking and monitoring progress of a compliance program against its own results (i.e., trending historical company survey data). Results from a survey report should provide enormous value in identifying organization strengths as well as opportunities for improvement. This can help ensure the organization is on a track towards creating an organizational compliance culture of the highest quality. It can provide great insights into how effective the compliance program has been in changing and improving the compliance of an organization and signal not only strengths in the compliance program, but areas of potential weakness warranting attention. Culture surveys can measure:

  • beliefs and values that guide thinking and behavior of the workforce;
  • outcomes or the “impact” of compliance program activities;
  • the extent to which individuals and leaders demonstrate commitment to compliance; and
  • the current state of the compliance climate or culture.

 

For more information, contact Daniel Peake at (dpeake@complianceresource.com) (703-236-9854).

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.