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.

Subscribe to the Kusserow on Compliance Newsletter

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: OIG 2017 Work Plan projects relating to hospitals

The OIG released the 2017 Work Plan that summarizes new and ongoing reviews and activities they plans to pursue.  They removed items that were completed, postponed, or canceled, as well as those “Revised” items.  The major focus of the OIG is on the programs of CMS, which include Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).  These programs account for more than 80 percent of HHS’s budget with total Federal program spending of $986 billion for FY 2016.  Medicare alone accounted for approximately $595 billion, which includes inpatient hospital, skilled nursing, home health, hospice, and physician services payments, as well as incentive payments for adopting health information technology, such as electronic health records (EHRs). CMS uses Medicare Administrative Contractors to administer Medicare Part A and Medicare Part B and to process claims for both parts for more than 37 million people and approximately $371 billion in payments. In addition, Medicare expended over $85 billion in Part D benefit payments in CY 2015, serving over 41 million beneficiaries. The following projects are those related to hospital.


  1. Hyperbaric oxygen (HBO) therapy. Determine whether Medicare payments related to HBO outpatient claims were reimbursed in accordance with Federal requirements.


  1. Incorrect Medical Assistance Days Claimed by Hospitals. Determine whether Medicare administrative contractors properly settled Medicare cost reports for Medicare disproportionate share hospital payments in accordance with Federal requirements.


  1. Inpatient Psychiatric Facilities. Determine whether such facilities complied with Medicare documentation, coverage, and coding requirements for stays that resulted in outlier payments.


  1. Inpatient rehabilitation (rehab) hospitals. Assess a sample of rehabilitation hospital admissions to determine whether the patients participated in and benefited from intensive therapy; and identify reasons patients were not able to participate and benefit from therapy.


  1. Intensity-modulated radiation therapy (IMRT). Determine whether the payments were made in accordance with Federal requirements.


  1. Outpatient Outlier Payments for Short-Stay Claims. Determine the extent of potential Medicare savings if hospital outpatient stays were ineligible for an outlier payment.


  1. Comparison of Provider-Based and Freestanding Clinics. Determine the difference in payments made to the clinics for similar procedures; and assess the potential impact on Medicare and beneficiaries of hospitals’ claiming provider-based status for such facilities.


  1. Reconciliations of Outlier Payments. Determine whether CMS performed necessary reconciliations in a timely manner to enable Medicare contractors to perform final settlement of the hospitals’ associated cost reports, as well as whether the Medicare contractors referred all hospitals that meet the criteria for outlier reconciliations to CMS.


  1. Hospitals’ Use of Outpatient and Inpatient Stays Under Medicare’s Two-Midnight Rule. Determine how hospitals’ use of outpatient and inpatient stays changed under Medicare’s two-midnight rule by comparing claims for hospital stays in the year prior to and the year following the effective date of that rule; and the extent to which the use of outpatient and inpatient stays varied among hospitals.


  1. Medicare Costs Associated with Defective Medical Devices. Identify the costs to Medicare resulting from additional use of medical services associated with defective or recalled medical devices.


  1. Payment Credits for Replaced Medical Devices That Were Implanted. Determine whether Medicare payments for replaced medical devices were made in accordance with Medicare requirements.


  1. Medicare Payments for Overlapping Part A Inpatient Claims and Part B Outpatient Claims. Determine whether outpatient claims billed to Medicare Part B for services provided during inpatient stays were made in accordance with Federal requirements.


  1. Selected Inpatient and Outpatient Billing Requirements. Determine hospitals’ compliance with selected billing requirements and recommend recovery of overpayments. Focus will be on those hospitals with claims that may be at risk for overpayments.


  1. Duplicate Graduate Medical Education Payments. Assess the effectiveness of preventing duplicate payments for DGME costs; and any appropriate payments.


  1. Indirect Medical Education Payments. Determine whether the IME payments were calculated properly.


  1. Outpatient Dental Claims. Roll up the results of our audits of Medicare hospital outpatient payments for dental services to provide CMS with cumulative results and make recommendations for any appropriate changes to the program.


  1. Nationwide Review of Cardiac Catheterizations and Endomyocardial Biopsies. Review Medicare payments to hospitals nationwide for outpatient RHCs and endomyocardial biopsies performed during the same patient encounter.


  1. Payments for Patients Diagnosed with Kwashiorkor. Roll up the results of our audits of Medicare hospital payments for kwashiorkor to provide CMS with cumulative results and make recommendations for any appropriate changes to the program.


  1. Review of Hospital Wage Data Used to Calculate Medicare Payments. Review hospital controls over the reporting of wage data used to calculate wage indexes for Medicare payments.


  1. CMS Validation of Hospital-Submitted Quality Reporting Data. Determine the extent to which CMS-validated hospital inpatient quality reporting data are accurate and complete.


  1. Long-Term-Care Hospitals Adverse Events in Postacute Care for Medicare Beneficiaries. Identify factors contributing to these events and determine the extent to which the events were preventable.


  1. Hospital Preparedness and Response to Emerging Infectious Diseases. Describe hospitals’ efforts to prepare for the possibility of public health emergencies resulting from emerging infectious disease threats; review use of HHS resources; and identify lessons and challenges faced by hospitals as they prepare to respond to emerging infectious disease threats.

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.

Will the ACA be repealed under President-elect Trump?


On January 20, 2017, Donald J. Trump (R) will be sworn in as the president of the United States; the Republican Party will retain its majority in both the House of Representatives and Senate, but will fall short of the 60-member Senate majority required to break a filibuster. President-elect Trump campaigned on the promise to repeal and replace the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), President Obama’s signature health care reform law.

Trump’s plan

In a position paper, Trump laid out his plan for health care, which will include:

  • complete repeal of the ACA;
  • permitting the sale of health insurance across state lines;
  • allowing individuals to fully deduct health insurance premium payments from tax returns;
  • enabling all Americans to make tax-free contributions to health savings accounts (HSAs);
  • requiring price transparency from all health care providers;
  • changing the Medicaid structure from a federal-state partnership to a block-grant system;
  • removing barriers to free-market entry for drug providers; and
  • reforming mental health programs and institutions.

The plan also calls for obtaining health care savings by enforcing immigration laws and increasing the employment rate to decrease enrollment in the Children’s Health Insurance Program (CHIP). Most of these proposals are similar to House Speaker Paul Ryan’s (R-Wis) plan for replacing the ACA (see Ryan proposes ‘A Better Way’ to repeal Obamacare, Health Reform WK-EDGE, June 29, 2016).

Without a supermajority in the Senate, the Trump Administration could potentially face a filibuster on its health care plans; that obstacle, however, may be overcome by use of the reconciliation process. Earlier this year, H.R. 3762—a bill repealing the ACA’s coverage subsidies, tax credits, Medicaid expansion provisions, individual and employer mandate penalties, and the medical device and health insurance taxes—made it to Obama’s desk before being vetoed (see Bill to repeal portions of the ACA heads to the President’s desk, Obama veto imminent, Health Reform WK-EDGE, January 13, 2016; Message in a veto: President says ACA stays put, Health Reform WK-EDGE, January 13, 2016).

Effects of Trump plan on uninsurance rate and federal spending

Under the ACA, the uninsurance rate in the U.S. has dropped to 8.6 percent, the lowest level on record (see White House celebrates ACA, Republicans refuse to join party, Health Reform WK-EDGE, October 26, 2016). The Congressional Budget Office (CBO) estimated that 22 million people would lose health insurance if H.R. 3762 became law (see Senate’s ACA repeal would reduce deficits by $474B, Health Reform WK-EDGE, December 16, 2015).

In a different report, the CBO found that repealing the ACA would first increase the federal deficit, but later begin to reduce the deficit while leaving individuals with higher premium costs (see Can health care spending be reduced while improving effectiveness?, Health Reform WK-EDGE, September 28, 2016). Similarly, Ryan’s “A Better Way” plan is estimated to reduce overall insurance coverage from ACA projections while decreasing the deficit (see ‘A Better Way’ would lead to quick gains but lower overall insurance coverage, Health Reform WK-EDGE, August 31, 2016).

The nonpartisan Committee for a Responsible Federal Budget analyzed Trump’s plan and determined that if it were implemented, the uninsurance rate would double; it also found that the Medicaid block-grant proposal lacked sufficient detail to estimate whether it would maintain current spending levels or save hundreds of billions of dollars.

Ongoing developments

In the coming weeks and months, Wolters Kluwer and Health Reform WK-EDGE will continue to provide in-depth analysis and coverage of ACA-related developments. Stay tuned for the practical tips and reliable guidance you’ve come to expect.