Kusserow on Compliance: CMS issues final rule on affiliation disclosure requirements for the provider enrollment process

CMS issued a final rule on September 10 that sets forth requirements mandating providers and suppliers who submit an application for enrollment or revalidation for Medicare, Medicaid, or the Children’s Health Insurance Program (CHIP) disclose current or previous (up to five years) affiliations with a provider or supplier who has uncollected debt; has been or is subject to a payment suspension under a federal health care program; has been excluded from participation from Medicare, Medicaid, or CHIP; or has had billing privileges denied or revoked. CMS said a history of bad actors trying to escape the ramifications of inappropriate or fraudulent behavior by re-entering the program in some capacity, and/or shifting their activities to another enrolled Medicare provider or supplier with which they are affiliated, provided the motivation for the rule. In addition to furnishing the disclosure information, the provider must submit: (a) an organizational diagram identifying all of the entities listed in this section and their relationships with the provider and with each other; and (b) if the provider is a skilled nursing facility, a diagram identifying the organizational structures of all of its owners.

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 LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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

CVS-Aetna merger approved, subject to divestiture of PDP business

The federal district court in the District of Columbia has concluded that the proposed consent judgment allowing the merger of CVS Health Corporation and Aetna, Inc. is in the public interest. The merger may go forward under the condition that CVS divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. The court considered objections to the merger raised by industry, consumers, and states, and concluded that the divestiture will effectively remedy the harm to the PDP market and will not be rendered ineffective due to the proposed judgment’s failure to address effects in markets adjacent to the PDP market (U.S. v. CVS Health Corporation, September 4, 2019, Leon, R.).

In response to the proposed merger between CVS and Aetna, the United States simultaneously filed a complaint and a proposed consent judgment in 2018. Under the terms of the proposed consent judgment, CVS would divest Aetna’s individual Medicare prescription drug plan (PDP) business to WellCare Health Plans, Inc. A number of parties including members of industry, consumer groups, and state regulatory bodies (amici) opposed the proposed consent judgment and filed briefs stating their concerns. As part of its review under the Tunney Act, the court conducted a hearing with witnesses from parties and amici.

The court concluded that the proposed consent judgment is in the public interest, although it did reject the government’s assertion that the court may only consider harms alleged in the complaint. The amici briefs raised three primary objections to the merger. First, that Aetna’s divestiture to WellCare will not effectively remedy the harm to the PDP market, because the divestiture leaves the PDP market overly concentrated and WellCare will not be as strong a competitor in the PDP market as Aetna was. On this point, the court found the evidence from CVS and the Government to be more persuasive. That evidence included testimony that the PDP market is already highly competitive, because plans can be easily compared, and the market is only moderately concentrated. The moderate concentration in the PDP market has neither prevented WellCare from competing in the market, nor prevented price competition from driving premium prices down, in recent years.

Amici also argued that the proposed final judgment’s failure to address effects in markets adjacent to the PDP market will undercut the effectiveness of the divestiture remedy and harm the public. For example, CVS could raise the price of its pharmacy benefit manager (PBM) services when selling the services to health insurance competitors. Such an action could threaten the success of the proposed divestiture remedy because WellCare, which both competes against CVS in the PDP market and contracts with CVS for PBM services, would be vulnerable to such a tactic. But CVS presented more persuasive evidence that substantially undermines this theory. Rival PBMs try to underbid CVS and CVS’s PBM oftentimes competes against its own customers because health insurance companies can move PBM services in house if they consider CVS’s price for contract services too high. That evidence strongly suggests that, if CVS were to raise its PBM prices, customers like WellCare could simply switch to a less expensive PBM or stop contracting for those PBM services altogether.

Finally, amici argued that the proposed final judgment without modification will harm HIV and AIDS patients in need of affordable, quality healthcare. But the court concluded that the record did not establish that the judgment will likely result in CVS gaining the ability to steer patients away from their current healthcare providers (such as the AIDS Healthcare Foundation). The Foundation uses a different PBM and maintains its own pharmacies, therefore it is unlikely that CVS will be likely to steer patients away from the Foundation.

In the Department of Justice press release announcing the settlement, Assistant Attorney General Makan Delrahim of the Antitrust Division expressed pleasure with the decision, noting that the judgment provides a “comprehensive remedy” that “protects seniors and other vulnerable customers of individual PDPs from the anticompetitive effects that would have occurred if CVS and Aetna had merged their individual PDP businesses.”

American Antitrust Institute (AAI) statement. “AAI strongly disagrees with the merits of the court’s opinion,” said AAI President Diana Moss. “On most points, the court simply accepted piecemeal evidence introduced by the DOJ and CVS. The opinion discounts the showing by amici that the remedy will fail to preserve competition in PDP markets and that the merger raises significant vertical concerns ignored by the DOJ in its complaint. The opinion’s statement that ‘[N]otwithstanding CVS’s significant market share, the evidence showed that CVS must compete vigorously to retain its PBM customers’ is divorced from sound economics.”

National review of Medicaid opioid prescribing not yet feasible

The Office of Inspector General (OIG) has determined that limitations of the national Medicaid claims database, the Transformed Medicaid Statistical Information System (T-MSIS), makes a national review of opioid prescribing in Medicaid unfeasible. The system cannot yet identify all at-risk beneficiaries and providers, the OIG reported (OIG Report, No. OEI-05-18-00480, August 2019).

The OIG assessed the completeness of variables necessary to identify beneficiaries at risk of opioid misuse or overdose and the National Provider Identifiers (NPIs) of providers that ordered and dispensed opioids. According to the report, states were missing data necessary for a national review. Some states did not require NPI to be collected. Others included NPI in their data but incorrectly submitted the data or were unable to transmit the data to T-MSIS because of outdated systems. Without a provider NPI, it is not possible to identify all providers who may be overprescribing opioids and take appropriate action, or to identify providers for investigations of fraud, waste, or abuse, the OIG found.

Identification of beneficiaries can be impeded because a Medicaid beneficiary can have multiple IDs within a state or across states. If a beneficiary does have multiple IDs, prescriptions dispensed to the IDs would appear to be for multiple persons rather than one person. The OIG noted in the report that without a unique beneficiary ID, it is not possible to identify all at-risk beneficiaries in need of opioid-related treatment and conduct proper monitoring of services to protect beneficiaries from inadequate coordinated care.

States also have failed to report diagnoses codes for all services despite being required to do so. Without a diagnosis code, it is not possible to exclude all patients with cancer diagnoses for whom higher doses of opioids may be appropriate or to identify patients’ medical conditions to determine medical necessity for services.

The OIG noted in the report that in August 2018, CMS that all states were submitting T-MSIS data and that CMS was prioritizing T-MSIS data quality. According to the OIG, CMS indicated it would have research files available in 2019. CMS currently has been working with states to improve the quality of data submissions.

Recommendations

The OIG recommended that CMS strive to ensure that individual beneficiaries can be identified at a national level using T-MSIS. CMS should address instances in which a single beneficiary has more than one Medicaid ID within a state. CMS also should prioritize state reporting of prescriber NPIs and issue guidance to clarify the requirements for diagnosis codes.

Kusserow on Compliance: OIG’s planned work for home health agencies

Home Health Agencies (HHAs) remain one of the top enforcement priorities for the DOJ and HHS Office of Inspector General (OIG). Considerable OIG investigative resources are devoted to HHA fraud. However, the OIG auditors and evaluators are also focusing on HHA waste and abuse. For example, in May 2019, the OIG released several audit reports related to HHAs, including those for EHS Home Health, Excella Home Care, Great Lakes Home Health, and Metropolitan Jewish Home Care. The OIG found a number of deficiencies, including beneficiaries who were not homebound that were able to ambulate without assistance and perform home exercises, or had only a partial episode (wound healed). In addition, in many cases, documentation was not provided or did not support services. To continue its efforts in this area, the OIG has added several planned audits and evaluations related to HHAs, including the following:

  1. OIG will review supporting documentation to determine whether home health claims with 5 to 10 skilled visits in a payment episode, in which the beneficiary was discharged home, met the conditions for coverage and were adequately supported as required by federal guidance.

 

  1. Recent OIG reports disclosed high error rates at individual HHAs, consisting primarily of beneficiaries who were not homebound or who did not require skilled services. So, the OIG will continue its efforts regarding whether home health claims were paid in accordance with federal requirements.

 

  1. Using data from the CMS’s Comprehensive Error Rate Testing (CERT), the OIG plans to identify the common characteristics of “at risk” HHA providers that could be used to target pre- and post-payment review of claims.

 

  1. The OIG will review Medicare Part A payments to HHAs to determine whether claims billed to Medicare Part B for items and services were allowable and in accord with federal regulations. Generally, certain items, supplies, and services furnished to patients are covered under Part A and should not be separately billable to Part B. the OIG has previously found noncompliance with these Medicare billing requirements.

 

  1. The OIG will compare HHA survey documents to Medicare claims data to look for evidence of patients omitted from HHA-supplied patient information from select recertification surveys using Medicare claims 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.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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