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).

Claims

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.

Errors

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.

Recommendations

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.

 

Objections

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.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Will the AHCA affect Medicaid’s nonelderly adults with disabilities?

The changes to Medicaid under the American Health Care Act (AHCA), as approved by the House Energy and Commerce Committee, carries potential implications for the nearly seven million nonelderly adults with disabilities currently covered under Medicaid, according to a Kaiser Family Foundation (KFF) issue brief. KFF’s issue brief describes how the AHCA would change Medicaid and offers insight on its potential effect upon nonelderly adults with disabilities by examining the type of insurance nonelderly adults with disabilities have, how they qualify for Medicaid, what their characteristics are, what services they receive from Medicaid, and how much Medicaid spends on the disabled.

The AHCA would change Medicaid in three major ways: (1) it would change Medicaid’s financing structure to a per capita cap, resulting in an estimated $880 billion reduction in federal Medicaid spending from 2017 to 2026, according to the Congressional Budget Office (CBO cost estimate of AHCA) (see CBO: Republican plan saves billions as 24M lose coverage, Health Law Daily, March 14, 2017); (2) it would repeal the enhanced federal matching funds for Patient Protection and Affordable Care Act’s (ACA, section 2001) (P.L. 111-148) enrollees as of January 1, 2020, except for those enrolled by December 31, 2019, who do not have a break in eligibility of more than one month; and (3) it would end the enhanced federal matching funds for Community First Choice (CFC) (ACA, section 2401), which provides attendant care services for people with disabilities, as of January 1, 2020 (see ‘American Health Care Act’ earns first stamp of approval, Health Law Daily, March 9, 2017).

Here is a summary of the KFF findings:

  • Type of health insurance. Thirty-six percent of nonelderly adults with disabilities are working for pay compared to 77 percent of those without disabilities. Among those who are working, 64 percent have access to employer-sponsored health insurance, compared to 68 percent of nondisabled workers. Thirty-one percent of nonelderly adults with disabilities have Medicaid, compared to 10 percent of those without disabilities. Only 41 percent have private insurance, compared to 74 percent of those without disabilities.
  • How do they qualify for Medicaid? KFF found that some nonelderly adults with disabilities are eligible for Medicaid through the ACA’s Medicaid expansion and some through a disability-related pathway based on both their low income and functional limitations.
  • Nearly 85 percent of nonelderly adults with disabilities have incomes below 200 percent of the federal poverty level (FPL) ($24,120 per year for an individual in 2017). Fifty-seven percent are white, 23 percent black, 16 percent Hispanic, and 3 percent Asian. About one-third of those enrolled in Medicaid have three or more functional limitations, which is more than two and one-half times the rate for those disabled who are privately insured and more than double the rate of those who are uninsured.
  • What services do they receive from Medicaid? Through Medicaid, nonelderly adults with disabilities have access to regular preventive care as well as medical care for illnesses and chronic conditions. States must provide certain minimum services for adults, such as inpatient and outpatient hospital, physician, lab and x-ray, and nursing home services. States also can choose to provide a broad range of optional services, including prescription drugs, physical therapy, private duty nursing, personal care, rehabilitative services, and case management. Most home and community-based services (HCBS) are also provided at the option of the state.
  • ACA expansion options. Section 2001 of the ACA offered states the option to expand Medicaid to nearly all nonelderly adults with income up to 138 percent of the FPL. As of 2017, 32 states have adopted the expansion. Section 2401 of the ACA created the CFC option to provide attendant care services and supports with a 6 percent enhanced federal matching funds. Eight states elected this option as of 2016. Section 2402 of the ACA also allowed states (17 as of 2015) to offer HCBS through the section 1915(i) option ( Sec. Act §1915(i)), which allows states to serve people with functional limitations that do not yet rise to an institutional level of care. Section 2703 of the ACA also created the Medicaid health homes option, which enables states (22 as of 2016) to provide care coordination services for people with chronic conditions at a 90 percent enhanced federal match for the first two years.
  • How much does Medicaid spend on people with disabilities? As of 2011, people with disabilities accounted for 15 percent of total Medicaid enrollment but 42 percent of program spending. Per enrollee spending for people with disabilities totaled $16,643 in 2011, more than five times higher than for adults without disabilities ($3,247) and nearly seven times higher than for children without disabilities ($2,463). One-half of states spend between $15,000 and $19,999 per enrollee for people with disabilities, and another third of states spend between $20,000 and $34,999 per enrollee for people with disabilities.

KFF believes that the AHCA’s per capita cap and elimination of the enhanced federal financing under the ACA expansion will put the states under budgetary pressures due to a reduction in Medicaid funds. It believes that these budgetary pressures may result in the limitation of Medicaid services for recipients, including the nonelderly disabled. KFF believes that careful consideration of the AHCA implications is warranted.

AHCA’s Patient and Stability Fund would benefit large states, study finds

Large states and states with fewer insurers offering coverage in the individual and small group markets could receive the most money under the American Health Care Act’s (AHCA) Patient and State Stability Fund, according to a study by Avalere. The AHCA, which consists of two bills that came out of the House Ways and Means and Energy and Commerce Committees, is touted as an effort to repeal and replace the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148).

Bill

Section 132 of the Ways and Means bill would add title XXII to the Social Security Act to create the Patient and State Stability Fund. The Fund would provide funding for the states and District of Columbia from 2018 through 2026 for eligible states to do any of the following:

  • provide financial assistance to high-risk individuals who do not have employer health insurance to enroll in health insurance coverage in the state’s individual market;
  • provide incentives for entities to enter into agreements with the state to help stabilize health insurance premiums in the health insurance market;
  • reduce the cost for providing coverage in the individual and small group markets;
  • promote participation in the individual and small group markets and increase available insurance options;
  • promote access to preventive services, dental care, and certain services for individuals with mental or substance abuse disorders;
  • provide payments to providers for the provision of health care services as specified by the Administrator; and
  • provide assistance to reduce out-of-pocket costs for individuals enrolled in health insurance coverage in the state.

Funding

The bill would appropriate $100 billion over 10 years to provide allocations to states. According to Avalere, the first 85 percent of the funds would be distributed based on the share of the state’s insurance claims as a percentage of the nation, so states that have more people with insurance and higher medical costs could receive more funding that states lower overall enrollment and spending.

The remaining 15 percent would be distributed to states that have seen an increase in the number of low-income uninsured from 2013 to 2015 or have fewer than three insurers offering coverage in their exchange in 2017.

Distribution among states

According to Avalere, the allocation methodology could result in states like California, Florida, and New York receiving the most money North Carolina, Arizona, Alabama, Oklahoma, and South Carolina could receive disproportionately high amounts of money due to the lack of health insurance participation on their markets in 2017.

The funding levels “vary widely” on a per capita basis compared to the state’s individual market enrollment in 2015, Avalere concluded. They range from $1,830 in the District of Columbia to $220 in Montana.