Kusserow on Compliance: HHS OIG reports on identified improper payments

In its Semi-Annual Report for 2017, the OIG announced that improper payments reported in the HHS financial statements have demonstrated a steady increase over the last several years. In FY 2016, HHS reported estimated improper payments of more than $96 billion. During the first half of 2017, the OIG issued a number audits that identified improper payments for a variety of reasons.

Eligibility Determinations

  1. Express Lane Eligibility. Under the express lane eligibility option, which allows States to expedite and simplify enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) by relying on findings from other agencies’ eligibility determinations, the OIG estimated that improper Medicaid payments on behalf of potentially ineligible beneficiaries totaled $284.1 million. CHIP payments for potentially ineligible beneficiaries totaled $10.6
  2. Payments after death. Medicare and Medicaid continued to make improper payments on behalf of beneficiaries who are deceased. During this reporting period, the OIG found that Florida did not always stop making capitation payments to Medicaid managed care organizations (MCOs) after a beneficiary’s death, resulting in more than $26 million in
  3. Incarcerated beneficiaries. The OIG continued its work reviewing inappropriate payments for incarcerated beneficiaries, recently reporting that CMS has not taken steps to recoup $34 million in potentially improper payments made on behalf of incarcerated

Improper Payments for Medical Devices and Services

  1. Chiropractic Services. Based on the OIG’s sample results, the agency estimated that $358.8 million (82 percent) of $438.1 million paid by Medicare for chiropractic services was
  2. Room and Board Costs Associated with HCBS Waiver Program Payments. State Agencies claimed at least $176 million in unallowable Medicaid reimbursements for services under the HCBS waiver
  3. Cochlear Devices. Medicare spent $2.7 million inappropriately for cochlear devices (hearing aid devices) that were replaced without cost to the hospital or

The OIG also reported that it has a body of work looking at situations where providers billed for goods and services at higher rates than allowed by program regulations. In this reporting period, the OIG looked at how a hospital’s reporting of inaccurate wage data affected Medicare payments for hospital services.

 

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 © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Summary of OIG fraud and abuse actions first half of 2017

The HHS OIG issued their Semi-Annual report for first half of fiscal year (FY) 2017 and summarized key accomplishments, significant problems, abuses, deficiencies, and investigative outcomes relating to the administration of HHS programs and operations that were disclosed during the reporting period. The following summarizes reported statistical accomplishments.

Criminal Actions (468). OIG reported 468 criminal actions against individuals or entities that engaged in crimes against HHS programs and 461 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters.  During the first half of FY 2017, OIG reported expected investigative recoveries of over $2.04 billion.

Health Care Strike Force (152 Criminal Actions). The Health Care Fraud Strike Force teams brought charges against 45 individuals or entities, 152 criminal actions, and $267 million in recoveries through investigations.

State Medicaid Fraud Control Units (MFCUs) (1,564 Criminal Actions).  The OIG has oversight responsibility for MFCUs and administers grants that provide federal funding for their operations. There are 50 MFCUs (in 49 States and the District of Columbia) totaled almost $259 million. The MFCUs employed 1,965 individuals. MFCUs reported 18,730 investigations, of which 15,509 were related to Medicaid fraud and 3,221 were related to patient abuse and neglect, including misappropriation of patients’ private funds. The cases resulted in criminal charges or indictments involving 1,721 individuals, including 1,249 for fraud and 472 for patient abuse and neglect. In total, 1,564 convictions were reported in FY 2016, of which 1,160 were related to Medicaid fraud and 404 were related to patient abuse and neglect. Civil judgments and settlements for FY 2016 totaled 998, and monetary recoveries in civil cases totaled over $1.5 billion. During this reporting period, OIG special agents partnered with MFCUs in conducting joint investigations on 714 criminal cases.

Program Exclusions (1,422). During this semiannual reporting period, OIG excluded 1,422 individuals and entities from Medicare, Medicaid, and other federal health care programs. Most of the exclusions resulted from convictions for crimes relating to Medicare or Medicaid, for patient abuse or neglect, or as a result of license revocation. OIG is also responsible for reinstating providers who apply and have met the requirements of their exclusions.

Sanction Authorities and Other Administrative Actions (1,504).  OIG sanctions include the exclusion of individuals and entities from federal health care programs and the imposition of CMPs for submitting false and fraudulent claims to a federal health care program or for violating the Anti-kickback statute, the Stark law, or the Emergency Medical Treatment and Labor Act (EMTALA), also known as the patient dumping statute. During this semiannual reporting period, OIG imposed 1,504 administrative sanctions in the form of program exclusions or administrative actions for alleged fraud or abuse or other activities that posed a risk to federal health care programs and their beneficiaries.

Civil Monetary Penalties Law (CMPL) ($26 million0. The CMPL authorizes OIG to impose administrative penalties on and assessments against a person who, among other things, submits, or causes to be submitted, claims to a federal health care program that the person knows, or should know, are false or fraudulent. In addition to administrative penalties and assessments, OIG can also exclude individuals for engaging in conduct prohibited by the CMPL. During this semiannual reporting period, OIG concluded cases involving more than $26.3 million in CMPs and assessments.

Self-Disclosure Programs ($23 million). Health care providers, suppliers, or other individuals or entities subject to CMPs can apply for acceptance into the Provider Self-Disclosure Protocol, a program created in 1998, to voluntarily disclose self-discovered evidence of potential fraud. During this semiannual reporting period, self-disclosure cases resulted in more than $23 million in HHS receivables.

 

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 © 2017 Strategic Management Services, LLC. Published with permission.

CMS moves ahead with new Medicare cards

CMS is moving forward with its fraud prevention initiative to remove Social Security numbers from Medicare cards. New cards issued under the program will omit the Social Security numbers of Medicare beneficiaries and, instead, use a unique, randomly-assigned number called a Medicare Beneficiary Identifier (MBI). The new cards will be shipped by CMS beginning April 2018.

Transition

The MBI will be based upon the Health Insurance Claim Number (HICN) currently used on Medicare cards. The use of an MBI in place of a Social Security number is designed to reduce both identity theft and the illegal use of Medicare benefits. The MBI will allow providers to identify beneficiaries using secure access tools. To ensure a smooth transition, there will be a 21-month overlap period where either the MBI or the HICN will be effective for looking up a beneficiary. As part of the transition, beneficiaries will be instructed how to safely and securely destroy their existing Medicare and keep their MBI confidential. The new cards will have no impact on the benefits beneficiaries receive.

Identify theft

The new Medicare card initiative was brought upon by requirements contained in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10). The initiative is important in light of the increase in the occurrence of identity theft. Between 2012 and 2014, identify thefts among individuals 65 and older increased from 2.1 million to 2.6 million. According to CMS, two-thirds of identity theft victims report a direct financial loss.

ACA changes contributed to slow in health care expenditures, study finds

Despite conventional wisdom that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has done little to address high growth in health care costs, national health expenditures have grown at historically low rates in recent years, according to a brief by the Urban Institute and Robert Wood Johnson Foundation. The slower growth is related in part to the recession and slow economic recovery, but changes associated with the ACA also seem to have contributed. Analysts predict that these factors will likely cause the slower growth rates to persist into the future.

In February 2017 CMS estimated that national health expenditures grew 4.3 percent annually from 2010 to 2015, lower than its original forecast of 6.5 percent (see CMS actuary releases 2016-2025 health care expenditure projections, Health Law Daily, February 16, 2017). Current estimates of growth in each component of spending for 2010 to 2015 are lower than the original forecast—from 5.8 percent to 4.5 percent for Medicare, from 9.9 percent to 6.5 percent for Medicaid, and from 6.6 percent to 4.4 percent for private insurance.

The report attributed the slower growth to the 2007 to 2009 economic recession and slow recovery, unexpectedly low inflation, increased employer offerings of high-deductible insurance plans, cost-containment efforts within state Medicaid programs, and Medicare policies unrelated to the ACA. The ACA probably also contributed to low spending growth—for example, Medicare payment reductions to hospitals and other providers, the reduction in Medicare Advantage payments, and the managed competition structure of the marketplaces, which were reflected in the 2010 forecast.

Other ACA-related factors not in the original forecast that might have helped slow spending growth include adjustments to ACA Medicare payments, which reduced the number of Medicare hospital days, outpatient visits, skilled nursing facility days, and advanced imaging procedures between 2010 and 2014. Lower Medicare payment rates might also have had spillover effects on other payers. In addition, Medicare policies such as financial penalties for hospital readmissions could have changed provider practice patterns for patients of other payers.