Kusserow on Compliance: CMS continued to pay millions of dollars for incarcerated beneficiaries

A couple years ago the OIG issued a report, followed by a public outcry about Medicare paying claims for incarcerated beneficiaries. The simple fact is that those in custody of a governmental entity are not eligible for Medicare. Last year Congress passed a law mandating CMS to establish policies and implement claims audits to ensure that payments are not made for Medicare services rendered to incarcerated beneficiaries and steps to detect and recoup payments made for instances in which an individual’s incarcerated status is not updated on CMS’s data systems. Under the same law, the OIG was mandated to submit a report to Congress within 18 months of passage, and periodically thereafter, on CMS actions to prevent payments made for incarcerated beneficiaries. The OIG issued an audit report on their evaluation of 2015 CMS policies and procedures and their planned revisions to them. They compared this information against requirements prohibiting payment for Medicare services rendered to incarcerated beneficiaries.

OIG findings

  1. CMS’s is not in full compliance with Medicare requirements.
  2. CMS failed to detect and recoup improper payments on behalf of incarcerated beneficiaries because they turned off its post payment claims edit to identify those claims.
  3. Medicare paid 63,949 claims of 11,786 incarcerated beneficiaries ($34,588,984) CY 2013-2014.
  4. CMS has not taken steps to act on the identified potentially improper payments.
  5. Failure to detect occurred in September 2013 when CMS turned off a post payment claims edit that it had created in April 2013.
  6. CMS planned revisions to its policies and procedures to deny Medicare payments for the same period that SSA suspends its benefits does not comply with the legal mandates.

OIG recommendations

CMS did not concur with the first recommendation listed below but did so for the other two.

  1. Develop and implement a system that allows CMS to collect the information necessary to fully comply with Medicare requirements that prohibit payment for Medicare services rendered to incarcerated beneficiaries and, if necessary, seek the appropriate legislation and funding;
  2. Review the $34.6 million in claims to determine which portion, if any, was not claimed in accordance with Medicare requirements and direct the Medicare contractors to recoup any ensuing improper payments; and
  3. Identify improper payments made on behalf of incarcerated beneficiaries after our audit period and ensure that Medicare contractors recoup those payments.

CMS officials stated that CMS is planning to obtain the dates that SSA uses to suspend benefits and plans to deny Medicare payments for incarcerated beneficiaries for the same periods that SSA suspends its own benefits for the same individuals.

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.

Committee hearing takes a long view at long-term care

Proposals to improve the financing and delivery of long-term care (LTC) were considered at a House hearing held by the Energy and Commerce Committee’s Health subcommittee. The subcommittee heard testimony from experts in the field who addressed the need for accessible LTC as Americans are growing older. In addition to addressing the changing demographic problem, the witnesses testified as to new financing strategies, including new models of LTC insurance. Committee chairman Joe Pitts (R-Pa) noted that the hearing was designed to exam the state of the LTC and to find a viable long-term solution.

Status quo

Congresswoman Doris Matsui (D-Calif) noted that the current financing system relies too heavily on the unpaid labor of 52 million individuals who care for their ailing family members or friends. Matsui also noted that the costs of LTC are placing too great a strain on Medicaid, which is the single largest payer of LTC services. She also made clear that under the current system, despite misconceptions to the contrary, Medicare pays for LTC in very limited circumstances.

An insurable risk

William Scanlon, a Consultant at the West Health Institute and National Health Policy Forum and the former managing director of Health Care Issues as the US General Accounting Office, testified that a financing solution based upon efficiencies found in the delivery or payment process is unlikely to succeed. Scanlon testified that insurance is a solution and that LTC makes sense as an insurable risk because the need for LTC services is not a certainty. He noted that “for persons turning 65 between 2015 and 2019, almost half (48 percent) will have zero LTC expenses before they die.” He explained that an individual benefits more from insurance than by saving for LTC expenses because there is a high probability that all or most of the monies saved in anticipation of LTC expenses would remain unused when the individual dies. Despite the advantages, Scanlon testified that only 3 percent of adults and 11 percent of adults over 65 have a private LTC insurance policy.


Alice Rivlin, Co-Chair of the Long-Term Care Initiative at the Bipartisan Policy Center testified as to four proposals to reform the system. One of those ideas, based upon the notion that LTC should be an insurable risk, is to make private LTC insurance more available and accessible. She also recommended the design of a federal LTC insurance option for individuals with catastrophic costs. She encouraged lawmakers to streamline Medicaid home and community-based care options to encourage effective care in lower cost settings. Her final recommendation was to ensure that working people with disabilities do not lose access to LTC services as their earnings increase.

Insurance models

Anne Tumlinson, the CEO of Anne Tumlinson Innovations LLC and Founder of Daughterhood.org, reiterated the problem of unpaid labor in her testimony, noting that while the U.S. spends $200 billion each year on LTC, the country relies on nearly $500 billion in unpaid family care. To solve the problem, Tumlinson discussed three insurance approaches: comprehensive, front-end, and catastrophic. She explained that each variety of insurance involved certain trade-offs like higher costs and limited coverage. Although she acknowledged that reform would be difficult, Tumlinson told lawmakers “we cannot afford to give up.”

Final Words: Medicare End-of-Life Counseling Coverage

By Kathryn Brown, DePaul University College of Law

Medicare recently announced that starting in 2016 advanced care planning will be covered including discussions that physicians have with their patients regarding the kind of care the patient wants to receive at the end of life. Advanced-care planning, also known as end-of-life counseling, may be legal, medical, practical, psychological, or spiritual in nature. It involves discussing the choices about what kind of help a person will want and need, as well as whether to receive care at home or in an institutional setting. End-of-life counseling often includes making legal decision about wills, advanced directives, and durable powers of attorney. These conversations are vital because a “good death” can have different meanings for different people. Patients commonly hope to have their end-of-life wishes followed, whatever they are, and being treated with respect while dying are common hopes.

While drafting the Affordable Care Act legislation, there were talks of reimbursing physicians for end-of-life counseling; however, the Affordable Care Act ultimately did not include such provision. The Proposed rule was published in July 2015 and received mix responses. One commentator, Betsy McCaughey, a Senior Fellow at the London Center for Policy Research, viewed the Proposed rule as enacting death panels. She stated, “[the rule is] being sold as ‘death with dignity,’ but it’s more like dying for dollars. Seniors are nudged to forego life-sustaining procedures and hospital care to go into hospice.” Others, however, praised the utility of such a rule. Joanne Kenen, a health care journalist, noted that, “with an aging population and growing public awareness that high-tech interventions are often futile at the end of life, doctors have encouraged private insurers to cover advanced-care conversations… Advanced-care doesn’t mean shunning aggressive care or specifying a ‘do not resuscitate’ order. People can also state in their care directives that they want ‘everything done.’” Despite mixed responses, some physicians already provide advanced care planning without compensation and some private insurers already cover advanced care planning.

When faced with end of life decisions, it is important to focus on living the highest possible quality of life. Dr. Diane Meier, Director of the Center to Advance Palliative Care Medicare, reminds that, “at the outset of a serious illness it’s very important to talk with patients and families about what they can expect what is the nature history of this disease course, what is the time frame.” Many individuals, however, do not have these conversations it seems. A recent poll by Kaiser Family Foundation found that about 9 out of 10 people believe doctors should be having end-of-life discussions with their patients; however, only 17 percent of the individuals polled had such conversations. Medicare, which insures 49 million elderly and disabled Americans, is in a prime position to solve this problem. Physicians previously may not have taken the time to have these important conversations because the conversations were not reimbursable. Now physicians are incentivized to take the initiative to discuss end-of-life care options and encourage beneficiaries to consider what kind of care they wish to receive at the end of their life.

These conversations are vital to patient-centered care and to carrying out a patients’ end of life wishes; however, physicians will need to do more than check a box that they had the conversation. Dr. Meier suggests that there should be documentation recording what was discussed and the patient’s wishes. Medicare will also need to implement metrics for measuring the quality and standards for the physician-patient conversations to ensure the conversations provide thoughtful advise and patients properly understand their options. Physicians will likely need education and training on the legal aspects of the end-of-life care decisions because these conversations will likely include the medical aspects of end-of-life care, including whether the individual wishes to die at home, as well as the patient’s legal options, such as creating an advance directive or durable power of attorney. Ultimately, these conversations should increase patient awareness about end-of-life care options and decrease confusion at the end of life because physicians will already know the patient’s wishes. The rule is the starting point for a health care system that will honor the goals and wishes of patients.

Kathryn Brown is a May 2017 J.D. candidate at DePaul University College of Law. Kathryn is a staffer on the DePaul Law Review, a fellow and vice-director of programming for the Jaharis Health Law Institute, and a general staff writer for the Institute’s online publication, E-Pulse. She graduated summa cum laude from St. Ambrose University in 2014 with a bachelor’s degree in political science and a concentration in international politics.

New hearing aid uses lasers, direct eardrum stimulation

Hearing aids have been around since the very end of the 1800s, but surely none of the first users imaged that the devices would eventually use lasers. On September 29, 2015, the FDA approved a new type of hearing aid for marketing that combines laser pulses and direct eardrum stimulation to amplify sound. The EarLens Contact Hearing Device™ (CHD) has received an indication for use in adults with mild to severe hearing impairment.

How does it work?

This device depends on two different parts working in unison. A tympanic membrane transducer (TMT) is placed on the eardrum (non-surgically) while an audio processor sits on the outer ear. The audio processor is connected to an ear tip containing a laser diode, which is placed into the ear canal. When the behind-the-ear (BTE) processor receives external sound waves, it converts them to low electronic signals that are sent to the ear tip. The signals are converted to pulses of light, which shine onto the TMT’s photodetector. The photodetector converts the light back into electronic signals and then transmits the sound vibrations onto the ear drum.

How is it different?

There are already multiple types of hearing aids. Some sit in the ear (ITE), some in the canal (ITC) and some behind the ear.  Older analog hearing aids simply amplified sounds, and some users struggled with them because all sounds were equally amplified by the device’s microphone. Some of these aids are programmable to hold separate settings for various environments, but they are not as sensitive to sounds as digital aids. Digital aids contain a chip that analyzes sounds based on the environment and user’s degree of hearing loss. The microphone amplifies sounds with an adjustment for volume and pitch, as well as feedback.

The EarLens, by contrast, is custom molded to the eardrum. The sounds are amplified by direct stimulation of the eardrum. The FDA believes that this is a new option for amplifying sounds over many frequencies.

Safety and effectiveness

The EarLens was studied over a four-month period for safety and effectiveness. The trials assessed residual hearing stability, amplification gain, and improved word recognition. Users’ ability to hear sentences in background noise with the device was compared to listening without any amplification. After a month of using the device, the 48 subjects experienced word recognition improvement by about a third. They also experienced a significant functional gain in the high frequency range. A maximum of 68 decibels was gained in the 9000-10,000 Hz range, which the FDA notes is not usually achieved with conventional hearing aids. There were some ear canal abrasions experienced, mainly due to the ear tip or forming the impressions. However, no serious adverse events were reported.

Who pays?

Medicare does not cover routine hearing exams or hearing aids. Part B will cover some diagnostic hearing exams if a doctor order these tests (20 percent of the Medicare-approved amount, along with the Part B deductible). Some Medicare Advantage plans may have some sort of hearing coverage. Only a few private insurance companies cover hearing aids, although three states (Arkansas, New Hampshire, and Rhode Island) require coverage for adults. This can be a problem for patients who suffer hearing loss, as prices can range up to thousands of dollars for one aid.

A House bill was introduced in March 2015 (H.R. 1653) proposing to repeal the Medicare hearing aid exclusion. After it was introduced, the Government Accountability Office (GAO) was instructed to study financial aid programs for hearing aids, as well as related examinations for patients suffering hearing loss.