Unlocking Opportunities for Inmates, ACA May Be the Key to Better Health

Over 10 million individuals enter the jail system in the United States each year. Statistically speaking, jail inmates are disproportionately male, people of color and poor.  An article by Maura Ewing, published recently in The Nation, noted that “this population suffers from higher rates of many health problems, including chronic and infectious disease, injuries, mental illness and substance abuse. And people are often at their sickest when detained. Eighty percent of detained individuals with a chronic medical condition have not received treatment in the community prior to arrest.”

Jails can be considered an “emergency room” of sorts, in that individuals often are very sick and require immediate treatment. Once individuals becomes inmates, they may have access to health care that they would never have had before. As these individuals receive treatment and get healthy during their incarceration, many people are realizing that jails offer an opportunity to identify and treat people who might not otherwise seek or have access to healthcare.

The problem, though, is that the treatment inmates receive in jail ends once they are released. According to The Nation, “health records are hard to transfer in and out, leaving patients who have received care prior to arriving in jail with siloed histories, creating inefficient, costly and potentially inconsistent treatment.” Currently, there are very few processes in place to  follow-up care once someone is released.  And the brief average jail stay of approximately three months is not enough time to get the individual on the road to recovery. With 96 percent of these individuals returning to their home communities, the need for continuity of care is stark.

Ewing points out in her article that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) provides a unique opportunity to address this problem. Before the ACA was enacted, 90 percent of those released from prison or jail each year were uninsured. Like many others, former inmates tended to use the ER. However, Ewing contends, “with the ACA’s Medicaid expansion in full swing in twenty-six states and Washington DC, 5.3 million people who are or have been incarcerated are newly eligible for Medicaid. The opportunity for continuity in treatment is palpable, and across the country, a movement is brewing among forward-looking jail administrators and healthcare providers to bridge this gap.”

It is time for the government to step up and ensure that individuals are provided care once they re-enter the community. State governments need to ensure that there is a process in place to transition people to coverage via the state Health Insurance Exchange or state Medicaid program. This will provide individuals with a healthy return to their communities and workforce.


Kusserow’s Corner: House Hearing on Medicare Fraud and Abuse

The U.S. House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on “Medicare Program Integrity: Screening Out Errors, Fraud, and Abuse.” During the hearing, subcommittee members heard testimony from CMS Deputy Administrator and Director of the Center for Program Integrity Dr. Shantanu Agrawal, HHS Office of Inspector General (OIG) Deputy Inspector General for Investigations Gary Cantrell, and Government Accountability Office (GAO) Director of Health Care Kathleen M. King.

CMS Testimony

The CMS testimony revolved around how it is applying three operational principles to guide all of its initiatives: (1) aiming to achieve operational excellence in addressing the full spectrum of integrity causes, in taking swift administrative actions, and in the performance of audits, investigations and payment oversight; (2) providing leadership and coordination in program integrity efforts across the health care system; and (3) focusing on impacting the cost and appropriateness of care across health care programs. Some of CMS’s efforts to reduce fraud, waste and abuse were noted, including: (1) strengthening provider enrollment; (2) ensuring proper and accurate claims payment; (3) facilitating leadership and coordination across the health care system; and (4) improving payment data transparency.

CMS acknowledged the failure to meet its target goal of a reduced improper payment rate for Medicare fee-for-service, and that the improper payment rate had actually worsened over the last fiscal year. CMS noted that it recovered about $19.2 billion in fraudulent payments over the past five years, including $210 million through a new system that uses analytics to probe billing patterns; however, the recovered sum is dwarfed by the size of the problem, projected to be up to $50 billion a year.

The subcommittee cited one news outlet that reported that several doctors who had lost a medical license were still able to bill the Medicare program for millions of dollars. In addition, it noted that at least 14 individuals convicted of FDA-related crimes and debarred by the FDA do not appear to be excluded from the Medicare program; six doctors debarred by the FDA were paid over $1 million in Medicare payments in 2012. Another issue raised in the hearing was that a Medicare card has the patient’s social security number (SSN), creating serious risk of identity theft. Both the GAO and OIG identified fixing this SSN issue as an important step in preventing Medicare fraud.

GAO Testimony

The GAO testimony spoke to their strategies to combat fraud through examining: (1) the ability of CMS’ information system to prevent and detect enrollment of ineligible or fraudulent Medicare providers and suppliers; (2) the possible use of electronic-card technologies; (3) the oversight of program integrity efforts for prescription drugs; and (4) the oversight of certain contractors who conduct post-payment claims reviews. The GAO has focused on the following strategies: (1) provider and supplier enrollment; (2) prepayment and post payment claims review; and (3) addressing identified vulnerabilities. Based upon its work, the GAO recommended:

  • Requiring additional provider and supplier disclosures of information;
  • Establishing core elements for provider and supplier compliance programs as authorized in the Patient Protection and Affordable Care Act (ACA);
  • Increasing use of prepayment edits to help prevent improper payments;
  • Improving oversight of the information systems analysts use to identify claims for post payment, as well as the contractors responsible for the reviews;
  • Implementing mechanisms to resolve vulnerabilities that could cause improper payments; and
  • Removing SSNs from beneficiaries’ Medicare cards to help prevent identify theft.

OIG Testimony

The OIG testimony provided an overview of current health care fraud trends and challenges that impede effective oversight, as well as recommendations on how to address such trends and challenges that could result in billions of dollars being saved, along with a more efficient and effective programs. These included:

  • Providing the OIG with authority to execute federal warrants for the seizure of assets for forfeiture to curb the profitability of healthcare fraud, which will exert a deterrent effect.
  • Removing SSNs from Medicare cards to help protect the personally identifiable information of Medicare beneficiaries.
  • Strengthening the Medicare contractor’s monitoring of pharmacies and its ability to identify for further review of pharmacies with questionable billing patterns.
  • Requiring Part D plans to verify that prescribers have the authority to prescribe.
  • Increasing monitoring of Medicare claims for home health services.
  • Creating a standardized form to ensure better compliance with the face-to-face encounter documentation requirements for home health agencies (HHAs).
  • Implementing the surety bond requirement for HHAs.
  • Monitor hospices that depend heavily on nursing facility residents.
  • Modifying the hospice payment system for care in nursing facilities, seeking statutory authority if necessary.
  • Taking action to provide States with data for identifying overpayments for physician certification statement (PCS) claims when beneficiaries are receiving institutional care paid for by Medicare or Medicaid.
  • Mandating the use of the audit log feature in all electronic health records (EHRs).
  • Working with contractors to identify best practices and develop guidance and tools for detecting fraud associated with EHRs, with specific guidance to address documentation and electronic signatures in EHRs.
  • Amending regulations to require Medicare Advantage and Part D plans to report to CMS, or its designee, their identification of and response to incidents of potential fraud and abuse.
  • Establishing a deadline for when complete, accurate, and timely Transformed Medical Statistical Information System (T-MSIS) data will be available.

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 © 2014 Strategic Management Services, LLC. Published with permission.

Kusserow’s Corner: Senate Aging Committee Reports CMS Failing With Its Contractors

In a series of recent blogs, I have reported on the problem of the multi-year backlog of appeals to administrative law judges (ALJs) that led to the Office of Medicare Hearings and Appeals (OMHA) suspending new cases from being filed. I reported on House hearings on the subject. Now coming from the Senate is a related attack on what appears to them as a system that is not working the way it should.

The Senate Special Committee on Aging released a bipartisan report on Medicare audit programs, including the recovery audit contractors (RACs) that expressed concern that the government’s “strategy to reduce improper payments is actually a strategy aimed more at identifying and recovering improper payments that have already occurred.” They noted a “significant burden is being placed on providers as result of the larger number of audits, many of which may be duplicative.” This is resulting in providers losing millions of dollars that are tied up in appeals because of increasing numbers of Medicare audits. The contractors receive contingency fees of between 9-12.5 percent for their recoveries. A recent OIG report was cited that found providers were successful in 72 percent of the inpatient claims denials that they appealed. Another finding was that most errors identified by the contractors were overruled by ALJs upon appeal. Many from the industry pointed out they won the vast majority of appeals with less than a quarter of the appealed recoveries sustained. In many cases, millions of dollars were withheld during the appeals process. The report also stated that “contractor error rate reduction plans must be overseen more effectively by the CMS.”

The Committee noted that the administration has added considerable manpower over the last several years to investigate cases, increase audits, and analyze more data to fight fraud in the Medicare program, including launching a $77 million technology screening system designed to proactively prevent fraudulent providers from joining the system and prevent bogus claims from being paid in the first place. Despite all these new resources being employed, improper payments within Medicare’s largest sector increased for the first time in five years, jumping from $30 billion to $36 billion. What this means is that improper Medicare payments climbed from 8.5 percent in fiscal year (FY) 2012 to 10.1 percent or $50 billion in FY 2013, despite all efforts by the administration.

The Committee expressed concern that the government’s “strategy to reduce improper payments is actually a strategy aimed more at identifying and recovering improper payments that have already occurred.” It blamed the administration for lax oversight of its confusing maze of private fraud prevention contractors, noting a fundamental flaw in the way certain contractors are paid because they are paid based on the dollar amount of fraud they identify. The Committee made a number of recommendations to CMS:

  • Consolidating post-payment review activities to the maximum extent possible;
  • Considering financial incentives aimed more at the reduction of improper payment rates in a given contractor’s jurisdiction, rather than solely on the amount of improper payments identified;
  • Strengthening its review of contractor error rate reduction plans; and
  • Emphasizing provider education.

In response to the criticisms, CMS reported making changes as it prepares to award a new round of contracts. For example, the contractors won’t be paid their contingency fees until their decisions have been upheld at the second level of the six-stage appeals process.

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’s Corner Newsletter

Copyright © 2014 Strategic Management Services, LLC. Published with permission.

CMS Asked to Exempt Pathologists from EHR’s Meaningful Use Requirements

A letter to CMS Administrator Marilyn Tavenner signed by 88 congressional representatives is asking CMS to grant a significant hardship exception to all eligible pathologists for the full five years allowed by the American Recovery and Reinvestment Act of 2009 (ARRA) (P.L. No. 111-5). Pathologists maintain that is difficult for them to meet the requirements for the electronic health record (EHR) meaningful use incentive program for Medicare and Medicaid since they do not have direct contact with patients and their work products end up in the EHRs of other physicians.

EHR Program

Hospitals and eligible professionals that fail to implement meaningful use of EHRs will be subject to a reduction in their reimbursement. Physicians, including pathologists, are subject to a 1 percent reduction in their reimbursement if they fail to meaningfully use EHR by 2015. The payment reduction will be increased to 2 percent in 2016 and 3 percent in 2017 and each subsequent year. Under stage 2 of the program, eligible professionals will have to demonstrate to CMS that they met 17 core objectives and 3 menu objectives. The stage 2 meaningful use requirements were designed to increase health information exchange between providers and patients. For example, one of the new core objectives is the use of secure messaging to provide patients with health information (see Stage 2 meaningful use requirements released).


In the Final rule implementing stage 2 meaningful use requirements, CMS granted pathologists a hardship exemption for 2015, exempting them from the 1 percent reduction for failing to meaningfully use EHR. In that Final rule, CMS acknowledged that pathologists face significant barriers in meeting the current meaningful use requirements. The ARRA gave CMS the authority to grant hardship extensions for up to five years to eligible professionals that will have difficulty because of the type of work they do in meeting the meaningful use requirements, and that is what these members of Congress are asking of CMS.

Pathologists argued that it would be difficult for them to meet these requirements since they have little contact with patients. “Pathologists use sophisticated computer laboratory systems (LISs) to support the work of analyzing patient specimens and generating test results. These LISs exchange laboratory and pathology data with EHRs,” said Gene N. Herbeck, MD, FCAP and President of the College of American Pathologists (CAP) in a press release. “The EHR meaningful use program overlooks the unique circumstances of pathology practice,” said Kathryn Teresa Knight, MD, FCAP and Chair of the CAP Federal and State Affairs Committee. “CMS has recognized this difference by exempting pathologists from the 2015 [meaningful use] penalty,” said Dr. Knight. “The circumstances have not changed and CMS must further grant pathologists a hardship exemption for the maximum amount of time allowed under current law,” she continued.

Legislative Fix

In addition, the CAP has endorsed a provision of legislation that would reform the sustainable growth rate (SGR) method to update the physician fee schedule which would remove pathologists from eligibility for payment incentives or penalties under the EHR program. That legislation would give the HHS Secretary the authority to create measures and activities to monitor and encourage the use of the EHR under a merit-based payment system that reflects the way pathologists and other physicians that do not have direct interaction with patients, practice medicine.