Kusserow on Compliance: HHS OIG annual report on Medicaid Fraud Control Units

Medicaid Fraud Control Units (MFCUs) are funded jointly by each state and the federal government. Federal funding is administered by the HHS Office of Inspector General (OIG) with each receiving approximately 75 percent of its total expenditures from the federal government. In fiscal year (FY) 2015, combined federal and state expenditures for the MFCUs totaled approximately $251 million.

Statistical results from 2015 MFCU investigations

  1. 1,553 convictions
  2. 731 civil settlements
  3. $744 million in criminal and civil recoveries
  4. 71 percent of convictions involved fraud
  5. 29 percent of convictions involved abuse or neglect
  6. Half of fraud cases involved unlicensed providers
  7. Personal care services attendants accounted for 439 convictions (or 65 percent of all fraud convictions)
  8. 40 percent of all abuse or neglect convictions were nurse aides, with 160 convictions
  9. 117 drug diversion cases were 8 percent of convictions and $4.4 million in recoveries
  10. All MFCUs reported civil settlements or judgments, ranging from 3 to 69 per Unit
  11. 731 civil settlements and judgments
  12. 279 (38 percent) civil settlements involved pharmaceutical manufacturers
  13. 54 settlements and judgments involved retail and wholesale pharmacies
  14. On average MFCUs recovered almost $3 for every dollar spent

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 © 2016 Strategic Management Services, LLC. Published with permission.

Mylan calculated profitability using 37.5% tax it doesn’t pay

Mylan is being met with yet more derision after a profitability analysis released by the company to the Securities and Exchange Commission (SEC) revealed that its profits are calculated after factoring in a U.S. tax rate that is much higher than the actual rate—which the Washington Post reports is nearly nothing.

When Mylan CEO Heather Bresch appeared before the House Committee on Oversight and Government Reform to address the pen’s price increases, she claimed that the company receives about $100 of profit from each sale of the $608 EpiPen® 2-Pak (see Mylan CEO highlights EpiPen® access improvement efforts before House committee, Health Law Daily September 22, 2016). The SEC’s profitability analysis revealed that Mylan includes a 37.5-percent tax rate when calculating its net product profitability.

According to the Washington Post, Mylan relocated its headquarters to the Netherlands, which reduced its tax rate. In 2015, the company’s overall tax rate was 7 percent in 2015, but an independent tax expert reported that the U.S. tax rate is actually close to zero. Mylan argued that standard profitability analyses include tax for the jurisdiction reviewed. Representative Elijah Cummings (D-Md) expressed Congress’s skepticism over the numbers provided, and noted that Mylan has until Friday, September 30, 2016, to give Congress files that will allow the government to determine the company’s actual profits.

HHS prescribes regulations for opioid addiction treatment reports

Medical practitioners who treat up to 275 patients in an office-based setting must provide various information to assist HHS in complying with newly established regulations regarding medication assisted treatment (MAT) of opioid use disorders. In an advance release of a Final rule set to publish in the Federal Register September 27, 2016, HHS requires information related to: (1) a practitioner’s annual caseload of patients to be reported monthly; (2) the number of patients provided behavioral health services and referred to behavioral health services; and (3) the features of the practitioner’s diversion control plan.


Buprenorphine is used in MAT to help people reduce or quit their use of heroin or other opiates, such as pain relievers like morphine. Unlike methadone treatment, which must be performed in a highly structured clinic, buprenorphine is the first medication to treat opioid dependency that is permitted to be prescribed or dispensed in physician offices, significantly increasing treatment access.

HHS had increased access to MAT in an office-based setting by allowing eligible physicians to request approval to treat up to 275 patients if certain conditions are met in a previous Final rule titled “Medication Assisted Treatment for Opioid Use Disorders” (81 FR 44712, July 8, 2016) (MAT rule). The MAT rule had originally proposed requirements to ensure that patients received the full array of services that comprise evidence-based MAT and minimize the risk that the medications provided for treatment are misused or diverted (see Proposal could push up patient limit for opioid abuse treatment, Health Law Daily, March 29, 2016).

HHS also made changes to the original proposed reporting requirements based on earlier comments by adding a requirement proposing that practitioners provide reports to the Substance Abuse and Mental Health Services Administration (SAMHSA) to maintain their approval to treat up to 275 patients in a supplemental Notice of Proposed Rulemaking (SNPRM) (81 FR 44576, July 8, 2016). The purpose of the reporting requirements is to help HHS assess practitioner compliance with the additional responsibilities of practitioners who are authorized to treat up to the highest patient limit.

Reporting requirements

HHS recognized that asking practitioners to calculate and report average monthly caseload of patients receiving buprenorphine-based MAT each year could be could be burdensome and changed this reporting requirement in the Final rule. The revised text requires practitioners to report annual caseloads of patients by month. By seeking information on the annual caseload of patients by month, HHS noted that an appropriate balance between collecting valuable information needed to assess compliance with the rule and avoiding undue burden to practitioners would be struck.

In addition, the reporting requirement has been revised to request the practitioner report on the number of patients provided behavioral health services and referred to behavioral health services. By seeking information on the number of patients that were provided services and referred for behavioral health services will meet the needs of assessing compliance of the MAT rule.

HHS modified the third reporting requirement, which required that the practitioner report on the features of their diversion control plan, by striking requirements related to reporting the number of patients who: (1) completed a buprenorphine course of treatment; (2) were referred to a less intensive level of care; (3) no longer wished to take buprenorphine; or (4) no longer taking buprenorphine for reasons not listed.

Beyond scope

HHS declined to address comments requesting higher patient limits, access to buprenorphine, or SAMHSA audit practitioners to ensure compliance with the MAT rule because the comments did not relate directly to the reporting requirements of the SNPRM.

United Nations: Superbugs a serious threat to human health, food supply

The Heads of States of the United Nations (UN) recently came together to recognize and commit to combating the threats posed by superbugs. Antimicrobial resistance (AMR)–a broader term than antibiotic resistance–includes bacteria, viruses, parasites, and fungi that develop resistance against medicines that were previously able to cure them. Secretary-General Ban Ki-moon said AMR poses “a fundamental, long-term threat to human health, sustainable food production and development.” At the High-Level Meeting on Antimicrobial Resistance, the UN sought to get and keep strong commitments to address AMR from national, regional, and international political groups.

Global action plan

Last year, the UN World Health Organization (WHO) published the Global Action Plan on Antimicrobial Resistance. The action plan outlines five objectives:

  • to improve awareness and understanding of AMR through effective communication, education, and training;
  • to strengthen the knowledge and evidence base through surveillance and research;
  • to reduce the incidence of infection through effective sanitation, hygiene, and infection prevention measures;
  • to optimize the use of antimicrobial medicines in human and animal health; and
  • to develop the economic case for sustainable investment that takes account of the needs of all countries and to increase investment in new medicines, diagnostic tools, vaccines, and other interventions.

The High-Level Meeting built on and emphasized the importance of achieving the action plan’s objectives.

FAO action plan

In advance of the High-Level Meeting, the Food and Agricultural Organization of the UN (FAO) pledged to help countries develop strategies for tackling the spread of AMR in their food supply chains. It released its own action plan to address AMR specifically in food and agriculture:

  • improving awareness of AMR issues among farmers and producers, veterinary professionals and authorities, policymakers, and food consumers;
  • building national capacities for surveillance and monitoring of AMR and antimicrobial use (AMU) in food and agriculture;
  • strengthening governance related to AMU and AMR in food and agriculture; and
  • promoting good practices in food and agricultural systems and the prudent use of antimicrobials.

Threat of AMR

According to the UN, AMR poses a huge threat. WHO Assistant Director-General and Special Representative for AMR Keiji Fukuda explained how deadly AMR is to humans: “By 2050, estimates indicate more people could die from antibiotic resistant infections than those who currently from cancer. . . . almost 10 million people would die from infections because they couldn’t be treated anymore.” Another effect on human life is less direct, but no less of a threat. Fukuda said that sustainable food supplies–and the availability of food for the growing global population–depend heavily on antibiotics used to treat sick animals and to prevent the spread of diseases.

Andrew Gurman, M.D., President of the American Medical Association (AMA), applauded the UN’s declaration of AMR as a danger. He said, “The AMA will continue to do its part to educate physicians on the importance of antibiotic stewardship in the inpatient and outpatient settings and provide them with the latest tools to help alleviate uncertainty when prescribing antibiotics.”