Kusserow on Compliance: OIG reports 2016 mid-year work plan update: Items completed, revised, & removed

The HHS Office of Inspector General (OIG) released a mid-year update on its 2016 Work Plan that summarizes new and ongoing reviews and activities it plans to pursue with respect to HHS programs and operations during the current fiscal year and beyond. This report includes those items that have been completed, postponed, or canceled. The following list those items related to Medicare and Medicaid. It is worth reviewing to determine whether the outcomes noted have any effect on the current compliance office work plan. Details can be found in the Work Plan.

Items in the 2016 Work Plan Completed

  • Medicare Did Not Pay Select Inpatient Claims for Bone Marrow and Stem Cell Transplant Procedures in Accordance with Medicare Requirements
  • Hospices Inappropriately Billed Medicare Over $250 Million for General Inpatient Care
  • CMS Has Not Performed Required Closeouts of Contracts Worth Billions
  • National Background Check Program for Long-Term-Care Employees: Interim Report
  • Enhanced Enrollment Screening Process for Medicare Providers: Early Implementation Results.
  • Part B Payments for 340B Purchased Drugs

Revised Work Plan Items

  • Consumer Operated and Oriented Plan Loan Program—CO-OP Conversion of Start-up Loans and CMS Monitoring Activities
  • CMS Oversight of Eligibility Determinations at State-Based Marketplaces
  • Medical Loss Ratio

Work Plan Items Removed

  • Analysis of Generic Price Increases Compared to Price Index

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

 

Medicaid work requirements may be counterproductive, undo reform efforts

An analysis of proposed changes to state Medicaid programs, which include restructuring funding and implementing a work requirement, suggests that eligibility and access to health care would be diminished. The Center on Budget and Policy Priorities (CBPP) believes that such a requirement would not result in much long-term employment gain and argued that families in programs imposing a work requirement are more likely to end up in deep poverty, with neither assistance nor wages.

Work requirements

The CBPP researched programs with work requirements and found that although employment increased modestly in the short-term, work requirement programs had the same or lower employment compared to programs without such requirements at the five-year mark. The portion of those with incomes below half of the poverty line, known as deep poverty, ended up rising in seven of 11 programs studied that had work requirements. This resulted in many participants ending up with no cash assistance and no employment.

Those who can work, do

The CBPP found that three-fourths of non-elderly and child Medicaid enrollees live in a family where at least one person works. In California, for example, Medicaid covers 10 percent of the population that works full time, and 20 percent of those employed part time. The report also indicated that states providing supportive employment services to those with disabilities have been successful in helping enrollees find and keep jobs.

CBPP’s analysis finds that many Medicaid enrollees do not work because they have health or family-related barriers to maintaining employment. These barriers include a role as a primary caregiver, behavioral health issues, limited education, and a criminal history. In 2012, the unemployment rate for those experiencing mental illness hovered at 17.8 percent, but the National Alliance for Mental Illness (NAMI) estimated that many could be successfully employed if they received supportive services. CBPP believes that it would be difficult work programs to identify those who could not work in order to exempt them from work requirements.

Counterproductive

The CBPP found that the work requirement would target unemployed parents or those with the aforementioned barriers to working. Losing coverage due to the inability to work would result in loss of access to primary and preventive care gained under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Hospitals would lose payment for treating the newly covered in states that have expanded Medicaid, and enrollees who are obtaining care that may ultimately better their chances of obtaining and sustaining employment could lose access to that care.

Highlight on Michigan: Medicaid expansion did not cause crowding

The expansion of Michigan’s Medicaid program—the Healthy Michigan Plan—did not impede access to care, according to a University of Michigan Health System study. Despite concerns that new rules and growth would be detrimental to those signed up for both the Healthy Michigan Plan and private insurance, according to the study, there was no significant increase in wait times for either group. In addition to not hindering access, expansion improved access for some individuals. For Healthy Michigan enrollees, the odds of getting an appointment increased in the first year of expansion.

Earlier research

The study, published in the American Journal of Managed Care (AJMC), is an extension of an earlier study that examined primary care appointment availability and wait times for new patients with Medicaid and private insurance before and 4 months after Michigan’s Medicaid expansion on April 1, 2014. In those first four months, the researchers found an initial increase in primary care appointment availability for new Medicaid patients and no lengthening of wait times.

Study

The subsequent study—like the earlier research—used a simulated patient or “secret shopper” method. Trained research staff called a random sample of primary care practices, before and after Medicaid expansion, to request a new patient appointment. Wait times were calculated as the difference between the date of the call and the appointment date. The study evaluated 295 clinics.

Appointment availability

The percentage of clinics accepting new Medicaid patients increased from 49 percent, before expansion, to 55 percent 12 months after expansion. The availability of appointments for privately insured individuals fell from 88 percent of clinics before expansion to 86 percent after expansion. The number of Medicaid appointments scheduled with non-physician providers increased from 8 percent before expansion to 21 percent 12 months after expansion. For individuals with private insurance, the proportion of appointments scheduled with non-physician providers increased from 11 percent before expansion to 19 percent 12 months after expansion.

Wait times

For clinics accepting Medicaid patients, median wait times remained stable over the first year of Michigan’s Medicaid expansion. For those with private insurance, median wait times increased from 7 to 10 days in the first year after expansion. Additionally, median new patient wait times were within two weeks. According to the study, 95 percent of new patient wait times satisfied the Health Michigan Law’s requirement that Health Michigan beneficiaries have access to an initial day primary care appointment within 90 days of enrollment.

Conclusion

Medicaid expansion in Michigan had a largely positive impact on patient access to care. With the exception of small increases in wait times for some privately insured individuals, the Health Michigan Program served to improve, rather than hinder, the likelihood and timeliness of care. The researchers concluded that increases in appointment availability for new Medicaid patients was likely attributable to increases in the number of non-physician appointments. As such, the study recommended that future research should examines other team-based approaches—like the use of non-physician appointments—to further improve primary care access.

 

Theranos lab in California shut down, fined for immediate jeopardy

Due to a number of serious deficiencies rising to the level of immediate jeopardy, the Theranos, Inc., laboratory located in Newark, California, lost its Clinical Laboratory Improvement Amendments of 1988 (CLIA) certificate and faces civil money penalties (CMPs) and the cancellation of its approval to receive Medicare and Medicaid payments for laboratory payments. In a July 7, 2016 letter, CMS notified Theranos of sanctions the agency was imposing against the lab. Theranos accepted full responsibility for the problems at the Newark lab and announced its plan to “work non-stop to resolve the issues identified,” promising that its top priorities are patient safety and quality.

Theranos, a company founded by a 19-year-old Stanford dropout who became the youngest female billionaire in the United States, made its name on reinventing blood testing. It was lauded for finding a way to run multiple tests from a single drop of blood, rather than multiple vials’ worth. The concept promised to revolutionize phlebotomy, making testing faster, more accurate, and much less expensive. Questions about the company arose in the year, however, when a Wall Street Journal investigation listed concerns about whether its tests were reliable. In April 2016, a New York Times article noted that the Department of Justice and the Securities and Exchange Commission were separately investigating the company based on issues raised by the WSJ.

CMS conducted a recertification and complaint survey at Theranos in late 2015; based on the survey, CMS found that the Newark laboratory was out of compliance with five CLIA Condition-level requirements and numerous CLIA Standard-level requirements. The agency provided Theranos with a statement of deficiencies and its finding of immediate jeopardy to patient health and safety, and requested immediate action to remove the jeopardy and bring unmet Condition-level requirements into compliance. Theranos responded to the statement of deficiencies, but CMS determined that the lab’s submission did not constitute a credible allegation of compliance and acceptable evidence of correction for the deficiencies cited. Theranos was given the opportunity to submit evidence as to why sanctions should not be imposed; however, CMS again found no credible allegation of compliance or acceptable evidence for correction of deficiencies.

CMS imposed sanctions on Theranos as follows:

  • revocation of the laboratory’s CLIA certificate effective September 5, 2016;
  • limitation of the laboratory’s CLIA certificate for the specialty of hematology effective July 15, 2016;
  • CMP in the amount of $10,000 per day for each day of noncompliance effective July 12, 2016, accruing until all cited deficiencies have been corrected and the laboratory is in compliance with all Condition-level requirements or the laboratory’s CLIA certificate is limited, whichever occurs first;
  • directed portion of a plan of correction effective July 12, 2016;
  • suspension of the laboratory’s approval to receive Medicare or Medicaid payments for services performed for the specialty of hematology on or after July 15, 2016; and
  • cancellation of the laboratory’s approval to receive Medicare or Medicaid payments for all laboratory payments effective September 5, 2016.

Theranos may request a hearing before a Departmental Appeals Board (DAB) administrative law judge within 60 days of the date of CMS’ letter; cancellation of all Medicare payments, however, is effective September 5 regardless of whether a hearing is requested. Upon revocation of the laboratory’s CLIA certificate, it will not be permitted to perform any testing, regardless of whether the laboratory charges for the testing. Lastly, the Newark lab’s owners and operators, including the lab director, are prohibited from owning or operating or directing a laboratory for at least two years from the date of revocation of the CLIA certificate.

The company noted that its other lab, located in Scottsdale, Arizona, is in CLIA compliance, but if the Newark lab’s CLIA certificate is revoked, the Arizona lab would also cease to operate.