Kusserow on compliance: OIG report on Medicare payments for clinical diagnostic lab tests

The OIG analyzed claims data for lab tests that CMS paid under Medicare’s Clinical Laboratory Fee Schedule, under Medicare Part B. Effective this year, CMS replaced payment rates with new rates for clinical diagnostic laboratory tests. This was the first reform in three decades to Medicare’s payment system for lab tests. Congress mandated that the OIG monitor Medicare payments for lab tests and the implementation and effect of the new payment system for those tests. The OIG concluded the new payment system for lab tests took for this year has resulted in significant changes to the Medicare payment rates for lab tests. The OIG used the data collected to date as a benchmark against which to measure the effects of changes to the payment system when new data from 2018 become available. The OIG report provided the fourth set of annual baseline analyses of the top 25 lab tests. The OIG identified the top 25 tests based on Medicare payments in 2017 and found:

  • In 2017, Medicare paid $7.1 billion for Part B lab tests, at about the same level for last 4-years.
  • The top 25 tests totaled $4.5 billion, 64 percent of the total and about the same rate for prior years.
  • A total of 50,000 labs received payment in 2017 and three labs received $1.1 billion, 15 percent of the total payments.
  • The top 25 tests were similarly concentrated among a few labs: 1 percent of labs received 55 percent of all Medicare payments for the top 25 lab tests in 2017.

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: GAO calls for strengthening oversight of Managed Care organizations

Medicaid is a major commitment of federal and state budgets, with total estimated expenditures of $596 billion in fiscal year 2017—expenditures that rival the budget of the Department of Defense. States are permitted wide latitude in the design and implementation of their program. The resulting diversity of the program and its size make the program particularly challenging to oversee at the federal level. The Government Accountability Office (GAO), in testimony before Congress, reported last year that they estimated about $37 billion in improper payments that accounted for about 26 percent of government-wide improper payments. The GAO testimony called for increased oversight of Medicaid providers and managed-care plans, and was critical of the Obama administration’s lax auditing of Medicaid insurers as millions joined the rolls through expansion. During the same hearing, the CMS Administrator responded by reporting the structure of expansion with the 90 percent match and an open-ended entitlement is an incentive for the states to spend more and more.

 

Highlights of GAO recommendations to CMS

  1. Add to clearly establish approval criteria and review processes to ensure supplemental payments of around $50 billion a year are identified and accounted for by states when setting future payment rates.
  2. Ensure demonstrations do not increase federal costs and properly conduct evaluations to increase significant savings and better informed policy decisions.
  3. Improve the Transformed Medicaid Statistical Information System to improve program oversight and collect complete and comparable data from all states.
  4. Conduct a fraud risk assessment and implement a risk-based antifraud strategy for Medicaid.
  5. Increased collaboration with the states is needed to help reduce improper payments.

 

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: CMS increases audits to address Medicaid fraud and abuse

In efforts to prevent Medicaid fraud and reduce improper payments, CMS is in the process of implementing eight “new or enhanced” program integrity initiatives and strategies to address reported billions in improper Medicaid payments. These initiatives include target auditing of selected state programs and known vulnerabilities. The stated aim is to promote transparency and accountability. The CMS announcement noted that Medicaid spending has risen more than 26 percent in the three years leading up to 2017, from $456 to $576 billion. A significant part of the increase was as result of states expanding their Medicaid programs under the Patient Protection and Affordable Care Act (ACA). Most of this increase was covered by the federal government, with its share rising 38 percent, from $263 billion to $363 billion, over the same three-year period. CMS efforts include evaluating the impact of this expansion on program integrity. The announced new initiatives followed a Senate hearing that lambasted CMS, reporting that Medicaid pays out $37 billion a year of improper payments, an increase of 157 percent since 2013.  The new initiatives will be designed to address previously identified activities that harmed Medicaid’s program integrity, and address problems identified by the GAO and OIG and include:

  1. Targeted audits of certain state MCOs. CMS will review financial reports from MCOs in targeted states to ensure they match actual claims experience.
  2. New audits of beneficiary eligibility. States that had OIG reviews of Medicaid beneficiary eligibility will have follow-up determinations reviewed by CMS.
  3. Claims and provider data optimization. CMS will validate the quality and completeness of state-provided data in the Transformed Medicaid Statistical Information System (TMSIS) using data analytics and other techniques to improve data quality and to flag potential problems that require further investigation.
  4. Data analytics pilots. CMS will use analytics and other IT tools on state-provided data to optimize state data to identify areas that need additional investigation.
  5. Provider screening on an opt-in basis. CMS will pilot a plan to screen Medicaid providers on behalf of states, in the belief that centralizing this process will improve efficiency and coordination across Medicare and Medicaid. This, in turn, should reduce state and provider burden, and address one of the biggest sources of error as measured by the Payment Error Rate Measurement (PERM) program.
  6. State-federal data sharing and collaboration. CMS is giving states access to the SSA’s master file of death records to help with managing provider enrollment.
  7. Publicly report state performance. The Medicaid scorecard will indicate how well states perform on certain measures pertaining to their Medicaid programs. This scorecard will include the state’s “integrity performance measures,” such as PERM.
  8. Provider education to reduce improper payments. CMS will bolster education efforts for Medicaid providers to reduce billing errors, including targeting comparative billing reports and provider-facing tools currently in development.

 

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: Congressional hearing on Medicare fraud

The HHS Deputy Inspector General for Audit Services provided Congressional testimony related to Medicare fraud and began by noting that Medicare spending $700 billion annually on behalf of 59 million beneficiaries has grown to the point where it is more than 15 percent of all federal spending. With increasing number of beneficiaries and rising health care costs, it is estimated that Part A Trust Fund will be depleted by 2026; and spending for Medicare Part B will grow by more than 8 percent over the next 5 years, outpacing the U.S. economy. Medicare and Medicaid improper payments reported by HHS was $90 billion a year with two thirds involving Medicare fee-for-service payments due to errors associated with insufficient or no documentation. Although improper payments may occur in all types of health care, home health, skilled nursing facility (SNF), and inpatient rehabilitation facility (IRF) are areas of particular concern, representing 33 percent of the overall estimated improper payment rate for Medicare fee-for-service.

Responding to this high level of improper payments, the OIG is using advanced data analytics help the agency more effectively assess risk and pinpoint oversight efforts. The OIG uses data analytics to analyze millions of claims and billions of data points. At the macro level, the OIG analyzes data patterns to assess fraud and other types of risk across Medicare services, provider types, and geographic locations to prioritize our work and more effectively deploy our resources. At the micro level, the OIG uses data analytics, including near- real-time data, to identify potential fraud suspects for more in-depth analysis and to efficiently target investigations. OIG enforcement efforts involve a three-pronged approach that focuses on prevention, detection, and enforcement. The CMS’s Fraud Prevention System (FPS) was cited as serving an important tool with data analytics and predictive analytics for fraud-detection.  Once suspected fraud is identified, the OIG investigate the facts and pursue enforcement to hold perpetrators accountable and recover misspent taxpayer dollars.

 

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.