Kusserow on Compliance: OIG 2017 work plan highlights

As compliance officers prepare their work plans for 2017, it is worth remembering those matters of current interest to the HHS Office of Inspector General (OIG) that are reflected in its 2017 Work Plan. The OIG’s plan outlines new and ongoing reviews of HHS programs and operations and timeframes for completion.  The OIG reviews various providers, including hospitals, nursing homes, and home health services.  Items in the Work Plan of particular significance include the following:

  • incorrect medical assistance days claimed by hospitals (addressing risk of overpayment under the Medicare disproportionate share hospital payments);
  • case review of inpatient rehabilitation hospital patients, not suited for intensive therapy;
  • inpatient psychiatric facility outlier payments;
  • Medicare costs associated with defective medical devices;
  • unreported incidents of abuse and neglect in skilled nursing facilities;
  • skilled nursing facility reimbursement;
  • review of hospice compliance with Medicare requirements;
  • Medicare payments for transitional and chronic care management;
  • Medicare Payments for Service Dates After Individuals’ Date of Death;
  • Centers for Medicare & Medicaid Services (CMS)’ implementation of the Quality Payment Program;
  • Medicare Part D rebates for drugs dispensed by 340B pharmacies;
  • Medicaid overpayment reporting and collections; and
  • CMS oversight and issuer compliance in ensuring data integrity for the Affordable Care Act (ACA) Risk Adjustment Program.

Tom Herrmann, J.D., a retired OIG executive who was intimately involved in past OIG Work Plan development, advises compliance officers to closely review the entire OIG Work Plan, as it telegraphs issues that have come to the OIG’s attention as potential problem areas warranting close examination. The results of such reviews often lead to proposed legal and regulatory changes.  They also may trigger additional audits, evaluations, and investigations. Examining the Work Plan items that may relate to their organizations in detail is an opportunity for compliance officers to get ahead of the power curve, rather than behind it.  The fact is that one of the purposes of publishing the OIG Work Plan is to encourage health care entities to engage in such self-examination and program improvement.

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.

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

DOJ announces New Jersey Medicare and Virginia Medicaid fraud schemes

The U.S. Department of Justice (DOJ) announced that (1) a New Jersey woman has pled guilty in a $1 million Medicare fraud scheme that deceived seniors into unnecessary DNA tests, and (2) three Bristol, Virginia individuals have been indicted for fraudulently billing over $350,000 to Virginia Medicaid for services under the Virginia Medicaid Intellectual Disability (ID) waiver program that were not provided.

New Jersey fraud

Sheila Kahl, 44, admitted that she wrongfully accessed protected health information (PHI) and paid kickbacks to healthcare professionals on behalf of a Medicare fraud scheme involving a purported non-profit, The Good Samaritans of America. Sentencing is scheduled for March 14, 2017.

A DOJ press release from the District of New Jersey, based on the criminal information and court statements, alleged that from July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, of Point Pleasant, New Jersey and others used. The Good Samaritans of America as front to present information about genetic testing to seniors in low-income housing projects.

In order to convince senior citizens to submit to genetic testing, Rehfuss allegedly used fear-based tactics, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. Rehfuss also allegedly claimed that the genetic testing allowed for “personalized medicine.”

Rehfuss was previously charged on December 2, 2015. The pending criminal complaint against Rehfuss contains mere allegations, and he is considered innocent unless and until proven guilty.

Virginia fraud

A grand jury, sitting in the Western District of Virginia, charged Deborah Branch, 64, Melissa Harr, 49 and Bryan Harr Sr., 40, with one count of health care fraud, one count of conspiracy to commit health care fraud, and two counts of wire fraud.

According to a DOJ press release from the Western District of Virginia, the indictment alleged that Melissa and Bryan Harr Sr., hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and qualifies for services paid for by Virginia Medicaid, under the Virginia Medicaid’s ID waiver program. Branch was allegedly paid through two different Virginia Medicaid contractors.

The indictment further alleged that from January 2010 until September 2015, Branch submitted time sheets claiming she was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in getting paid for work she did not do, Branch allegedly paid the Harrs approximately $200 every two weeks. Virginia Medicaid paid out $350,641.02 to two different Virginia Medicaid contractors, Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions), based on Branch’s time sheets, of which $207,854.43 was paid to Branch.

Kusserow on Compliance: Drifting into corporate integrity agreements is dangerous

Compliance Officers are well aware of impending Corporate Integrity Agreements (CIAs) as cases move through investigations and settlements with the Department of Justice (DOJ) and HHS Office of Inspector General (OIG).  This lead time permits time to prepare for meeting obligations. Consultants with extensive experience in this area offer some thoughts and suggestions to avoid making costly mistakes, or failing to meet CIA deadlines.

  • Suzanne Castaldo, J.D., has assisted many organizations in meeting CIA terms and makes the point that, “When a matter falls into an investigation by the DOJ and OIG, legal counsel takes over to resolve the matter. After the case is settled with the DOJ, they continue to work with the OIG on terms and conditions for the CIA.  The result often catches the organization and their Compliance Officers, executive leadership, and Board about the full scope of what needs to be done in the 120 days following agreement.”
  • Tom Herrmann, J.D., had a number of years at the OIG coordinating with the DOJ, developing settlement agreements, and appointing monitors, as well as working as an Independent Review Organization (IRO) with more than a dozen organizations. He urges “Compliance Officers or organizations moving to DOJ settlement and OIG to not sit back and wait for an agreement to be negotiated.   They should be in communication with their legal counsel to understand what is being discussed in terms of timing and obligations and begin maneuvering with plans to meet the obligations that will be in the CIA.”
  • Carrie Kusserow, who worked as both a Compliance Officer and a consultant in meeting corporate integrity agreement (CIA) obligations, agrees, in that, “When CIAs are signed, most Compliance Officers and their executive leadership are often surprised by the implications of what has been agreed; and ill prepared to meet the terms and stringent timelines that are included in them. They wake up and begin to focus on the real scope of what has been agreed in the CIA.  Suddenly they find they begin to understand the scope of their commitment and begin racing the clock to accomplish all that to which they have agreed.  Frequently this leads to mistakes and delays in trying to do all that is required within strict timeframes established that include securing the Independent Review Organization, as well as Compliance Experts for the Board.  All this is the backdrop to preparing the first report to the OIG.  The last thing any organization needs is to fail in meeting obligations at the outset of a CIA.”
  • Steve Forman, CPA, who also has extensive experience both in leading IRO teams as well as being a Board appointed Compliance Expert for three organizations, observed that “There is little by way of excuse for Compliance Officers, leadership and the Board not being adequately prepared for what is coming in terms of a CIA. Compliance Officer should, at the first sign that there will be a settlement with the government begin their homework and preparation, by reviewing recent CIAs posted on the OIG website.   CIAs follow a pattern, granted that terms and conditions evolve, it does so slowly.  All a Compliance Officer needs to do is find a CIA with factual similarity to their situation; and then read the terms and apply them to their own organization.  By doing this, they will know how much time they will have to do certain things.”
  • Al Bassett, J.D., who has more than 20 years’ experience in providing compliance advisory services, adds, “Many of the tasks that will be required under a CIA can and should be undertaken well in advance of an agreement. It is foolish to wait until a CIA is signed.  The race is on once a case is moving to the DOJ, not OIG.  In many cases this provides a year or more of advance preparation to meet what will likely be included in the CIA in terms of being able to evidence compliance program effectiveness. It is important that organizations realize that CIAs are no longer just focused upon substantive issues that led to the problem that are monitored by an IRO.  Recent CIAs have turned their attention to compliance and certifications.  Compliance standards are set forth and there are mandated certifications by the executive leadership, including the Compliance Officer, along with members of the Board.  Board certifications have also led to mandates to engage in addition to an IRO, a Compliance Expert to assist and give advice to boards to prepare them to personally certify the compliance program.  Knowing this, the Compliance Officer should be working in overdrive, before any settlement, in preparing to meet what is needed to evidence compliance program effectiveness.”
  • All of the experts agreed that it is strongly advisable for Compliance Officers to begin looking for qualified experts to fill the roles of an IRO and Compliance Expert. They underscore this as a very serious responsibility, for once selected, they are likely to have that role for up to five years.  Although there are many who would like to fill those roles, finding the right qualified experts will take some time and weeding.  Far too many organizations find themselves rushed on finding the right experts and are forced to settle on lesser qualified parties.  A bad selection can result in many additional unnecessary burdens, higher costs, and increased problems with the OIG.  The best advice given is to find an organization with experience in these roles with many CIAs.  They will know what needs to be done and not learn on the engagement at the expense of the organization.  They also will be known by, and have experience and credibility with, the OIG.

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

MA and Part D benefit administration not always straightforward

Although the idea that private insurers can be more efficient than the government in offering health plans may be a matter of opinion, over 17 million Medicare beneficiaries have taken “advantage” of the option by enrolling in Medicare Advantage (MA). At the American Health Lawyers Association (AHLA) Fundamentals of Health Law conference, Thomas Barker, partner at Foley Hoag LLP, noted that MA enrollment has steadily increased over the past 10 years. Medicare Part D coverage is also an important benefit for those taking outpatient medications. Despite beneficiaries’ reliance on these programs, administration of the benefits still has some kinks.

Medicare Advantage

MA plans are available to those entitled to Part A or eligible to enroll in Part B. MA plans are required to offer all original Medicare benefits, but may implement their own cost-sharing and benefit designs as long as they are actuarially equivalent to original Medicare. For example, original Medicare only covers skilled nursing care under Part A if the beneficiary has been in an inpatient hospital for three days prior to nursing facility admission. Most MA plans do not impose this rule.

MA plans are required to implement the same cost sharing for four particular categories: chemotherapy administration, renal dialysis, skilled nursing care, and “other benefits specified by CMS” (of which there are none to date). Congress reasoned that this would provide for predictability in benefit design.

Local and national coverage decisions

Original Medicare may not pay for items and services that are not reasonable and necessary for diagnosis or treatment. CMS issues national coverage decisions on reasonableness and necessity of certain therapies and technologies, which apply to MA plans. If a national coverage decision has not been issued for a certain item or service, local CMS contractors have the power to issue their own decisions. Barker explained that this is when MA plan design starts to get complicated.

If an MA plan is only operating in a regional market, it must apply the local coverage decisions. However, if multiple markets are covered, the MA plan has the option of applying the coverage decision even to enrollees who are outside of the decision’s jurisdiction. In cases where no decision has been issued, nationally or locally, MA plans have some discretion. Although CMS has not clarified its position, Barker interprets the available information to mean that MA enrollees are entitled to the same benefits as original Medicare beneficiaries living in their area. Yet at the same time, CMS seems to give MA plans some discretion to use the medical necessity criteria of other local plans or develop their own evidence-based criteria.

Part D

Medicare Part D is completely offered through private plans, which are extremely competitive (compared to MA plans’ requirement to bid against an established benchmark). Part D operation also differs from MA due to the increased flexibility in benefit design. Although there is a statutorily established design, fewer than 10 percent of Part D enrollees are in such a plan. Almost all plans offer a different coverage design that is actuarially equivalent to the standard benefit. Most commonly, these plans have no deductible and have a three-tiered cost-sharing amount as opposed to coinsurance.

Beneficiaries who choose to enroll in Part D are entitled to “coverage of covered Part D drugs.” Although the definition is basic, some challenges have emerged. The drug must be FDA approved and only dispensed pursuant to a prescription, can be a vaccine and insulin, can be used for a “medically-accepted indication,” and must not be expressly excluded from coverage or covered by Parts A or B. Although Part B covers some drugs, such as those that are physician-administered, CMS contractors can make differing determinations over whether a Part B-covered drug is usually self-administered. This results in some drugs covered under Part B in some jurisdictions and under Part D in others.

The “medically-accepted indication” phrase in the statute has also presented some challenges. Barker noted that this entire issue turns on grammar as much as it does administrative law. After establishing that the drug must be prescribed and FDA approved, it says “and such term includes…any use of a covered Part D drug for a medically accepted indication.” In a relevant lawsuit, a physician prescribed a drug approved as a fertility drug to treat a rare form of ovarian cancer. Although there was compendia support, it would not have met the “medically accepted indication” definition and the Part D plan denied coverage. The court rejected the government’s argument that the phrase “and includes” is definitional, finding that reading the phrase as illustrative was more logical. Therefore, according to the court, a Part D drug does not have to be prescribed for a medically accepted indication in order to be covered.