Kusserow on Compliance: OIG reports concern and interest in billing for ventilators

The HHS Office of Inspector General (OIG) issued a report to CMS expressing concerns about the recent substantial increase in Medicare billing for noninvasive pressure support ventilators (coded as E0464). The agency analyzed Medicare claims data on noninvasive multimodal ventilators, CPAP devices, RADs, and related supplies from 2009 through 2015 and found an increase of 85 times over this period of time. The OIG noted that ventilator technology has evolved so that it is possible for a single device to treat numerous conditions by operating in several different modes—e.g., basic continuous positive airway pressure (CPAP) mode, respiratory assist device (RAD) mode, and traditional ventilator mode. Medicare covers ventilators and RADs for similar respiratory diagnoses, but the selection of the appropriate device is based on the severity of the beneficiary’s condition. RADs are covered for beneficiaries with less severe conditions, whereas ventilators are covered for more severe conditions. CPAP devices are covered for the treatment of obstructive sleep apnea.


  1. The OIG could not find a reasonable explanation for the increase.
  2. A large proportion of the beneficiaries with E0464 ventilators had recently switched to these devices from using a CPAP device or RAD.
  3. Emergence of this multimodal device, when combined with Medicare coverage and payment policies that favor reimbursement for ventilators, appear to create incentives for suppliers to provide and bill for a ventilator when the device is actually being used as a RAD or CPAP device.
  4. Increased billing trend is being driven primarily by three national suppliers that have rapidly expanded their market share and that accounted for 54 percent of the nationwide growth in ventilator claims from 2012 to 2015.
  5. There has been a dramatic shift in the use of ventilators to treat respiratory conditions rather than neuromuscular conditions.
  6. Medicare also paid $25 million for E0464 ventilator claims with indicators of inappropriate billing (e.g., billing for multiple devices or billing to treat obstructive sleep apnea).

The OIG called upon CMS to monitor the providers with the largest market shares of ventilator beneficiaries or exploring the causes and implications of the shift in diagnoses on ventilator claims, as well as have increased contractor reviews (both prepayment and postpayment) of ventilator claims for improper payments. The results of this report will result in closer scrutiny of these claims and it also may increase interest in future audits and investigations in this area, particular those national suppliers that dominate the market.

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.

Primary care reform efforts showing progress

Four out of seven regions shared in savings with CMS and nearly 95 percent of all practices met quality of care requirements in the second year of CMS’ Comprehensive Primary Care (CPC) initiative. CPC is a multi-payer program launched by the Center for Medicare and Medicaid Innovation (CMMI) in October 2012 to advance primary care by paying clinicians to deliver accessible, comprehensive, and coordinated care in seven regions across the country. Throughout 2015, CPC generated $57.7 million in gross savings in Medicare Part A and Part B expenditures, which was equivalent to the $58 million paid in care management fees to the practices involved. More than half of the participating CPC practices will also receive a share of over $13 million in earn shared savings. According to CMS, the results reflect the work of 481 practices that served over 376,000 Medicare beneficiaries and more than 2.7 million patients overall in 2015.

Four of the seven regions participating in CPC – the states of Arkansas, Colorado, and Oregon, and the Greater Tulsa region in Oklahoma – realized net savings and will share in those savings with CMS; the savings generated in these four regions covered the net losses in the other three CPC regions. In addition to the Medicare savings, CPC practices had lower than expected hospital admission and readmission rates, as well as favorable performance on patient experience.

Gross savings nearly doubled from the first performance year in 2014; practices in four regions were eligible to receive shared savings, compared to one region in 2014. CMMI’s Comprehensive Primary Care Plus (CPC+) will begin on January 1, 2017, with 14 selected regions.

Quality measures

CMS included electronic clinical quality measures (eCQM) for the first time in Medicare shared savings determinations for CPC. CMS noted that these practices with eCQM also exceeded national benchmarks; the eCQM data are recorded in the electronic health record in the routine course of clinical care, enabling real time quality improvement efforts.

The majority of CPC practices that reported eCQM surpassed the median national performance for 10 out of 11 eCQMs in the measure set, with 97 percent of CPC practices successfully reporting nine eCQMs.

CPC initiative

CPC is the largest test of advanced primary care in U.S. history, exploring the potential of primary care clinicians redesigning practices to deliver better care to patients, as well as supporting physicians’ ability to innovate and deliver care to meet patients’ needs and preferences.

Kusserow on Compliance: Self-disclosures to the OIG continue to result in settlements

The HHS Office of Inspector General (OIG) announced an update on self-disclosures reporting that settlements from that process have exceeded $500 million since the inception of the program in 1998. Health care providers, suppliers, or other individuals or entities subject to Civil Monetary Penalties are encouraged to use the OIG Provider Self-Disclosure Protocol, to voluntarily disclose self-discovered evidence of potential fraud. It gives providers the opportunity to avoid the costs and disruptions associated with a government-directed investigation and civil or administrative litigation.

Settlements are posted on the OIG Website that show amounts through this process most often range between a quarter and a half million dollars, with many under $100,000. However there are some significantly larger settlements in the millions of dollars. By far the large settlement came last year with Kroger Co., who agreed to pay $21,523,047 for (1) employment of 14 excluded individuals; and (2) filling prescriptions written by 84 excluded prescribers. It is also a reminder that the most common self disclosure involves parties on the OIG List of Excluded Individuals and Entities (LEIE). The lesson to be learned from this is to ensure ongoing screening of employees, health care professionals, contractors and vendors, as called for by the OIG. However, many times organizations that do screen frequently are not sufficiently trained to identify and confirm those that may appear on the LEIE. Sometimes this is as the result of slightly different spelling of names, transposition of first and surnames, etc. As such, it pays to train people in resolving potential hits, or use a service that will do it for you.

Guidance on the Provider Self-Disclosure Protocol can be found on the OIG website. The “principal purpose” of this program is making available “guidance to health care providers that decide voluntarily to disclose irregularities in their dealings with federal health care programs.” They accept on submissions relevant to the False Claims Act, the anti-kickback statute, and claims pertaining to excluded individuals. The OIG places emphasis on organizations to undergo a full internal investigation before disclosure submission and providing detailed findings to the OIG. Self-disclosure may be submitted online or by written submissions by mail to the OIG.

Disclosure Benefits

  1. No Corporate Integrity Agreement (CIA)
  2. Lower multiplier (1.5 times single damages)
  3. CMS suspending “the obligation to report overpayments” for those self disclosed
  4. Reduced the time a case is pending to less than 12 months.

The OIG leaves it to the provider to ensure the conduct in violation of federal criminal, civil, or administrative laws ended at the time of disclosure, or that corrective action is undertaken within 90 days of submission to the protocol. They must conduct a review to estimate the improper amount received from a federal healthcare program when reporting a submission of improper claims to the protocol. Damage estimation must be either a review of claims submitted or a random sample of affected claims (the random sample must be accompanied by a copy of the sampling plan). This is a critical step and must be done correctly by experts.

Meet Before Self Disclosing

  • Ensure reportable has ended before disclosure.
  • Corrective actions taken to correct underlying problem and prevent future non-compliance.
  • Waiver of any statute of limitations defenses pertaining to OIG administrative actions.
  • “Must acknowledge that the conduct is a potential violation” and “explicitly identify the laws that were potentially violated.”

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.

AHA’s motion calls for end of appeals backlog litigation

The American Hospital Association filed on October 14, 2016, a motion for summary judgment formally requesting mandamus relief instructing the Secretary of HHS to comply with mandatory statutory deadlines and clear the backlog of pending Medicare claims appeals. In the motion, the AHA agrees that the backlog cannot be cured overnight, but that “the Secretary has treated difficulty as an excuse for inaction.”

Motion for summary judgment

The AHA requests that that court order the Secretary to implement three sets of solutions for the backlog: (1) offer reasonable settlements to broad groups of Medicare providers and suppliers; (2) delay repayment of at least some subset of disputed Medicare claims and toll the accrual of interest on those claims for waiting times beyond the statutory maximums; and (3) impose financial penalties on recovery audit contractors (RACs) for poor outcomes at the administrative law judge (ALJ) level. The AHA claims that the Secretary has the authority to implement each reform to target the existing backlog of appeals and reduce the number of future appeals. The motion also gives the option for the Secretary to offer and implement proposals of her own that would have at least a significant effect on reducing the backlog and minimizing its impact in the interim.

Procedural history

The AHA, Baxter Regional Medical Center, Covenant Health, and Rutland Regional Medical Center (Medicare providers) asked the court to issue a writ of mandamus to compel HHS to process their long-pending Medicare claim-reimbursement appeals in accordance with statutory timelines. In December 2014, the D.C. district court declined to intervene to resolve the backlog of Medicare reimbursement appeals, stating that “the waiting game must go on.” Although the court agreed that HHS had violated its statutory obligations and reasoned that Recovery Audit Contractors (RAC) audits may have been worsening the problem, the court determined that it was not in a position to address the massive and growing administrative backlog because the problem required cooperation between Congress and HHS.

In February 2016, however, the D.C Court of Appeals revived the case and sent it back to the district court because the backlog of delays had gotten worse. At that time, the Court of Appeals instructed the district court that “in all likelihood,” it should order HHS to comply with the appeals deadlines if HHS or Congress failed to make meaningful progress toward solving the problem within a reasonable period of time. The court pointed to the close of the next appropriations cycle (September 30, 2016) as the deadline for resolution. In response, the Secretary asked the district court to stay the proceedings until September 30, 2017, to allow HHS to move forward on various efforts designed to tackle the backlog of reimbursement appeals. The D.C. district court denied HHS’ request to delay further proceedings in the case, holding that the Secretary’s proposals to reduce the claims review backlog and comply with statutory review deadlines would not result in meaningful progress.