Kusserow on Compliance: October 2017 Work Plan update

This year, the OIG is updating their annual Work Plan during the year, rather than annually. The Work Plan sets forth various audits and evaluations that are underway or planned during the fiscal year and beyond. The updates will include the addition of newly initiated Work Plan items and removal of completed items. In conducting its work, the OIG assesses relative risks in HHS programs and operations to identify those areas most in need of attention. In evaluating potential projects to undertake, the OIG considers a number of factors, including mandates set forth in laws, regulations, or other directives; requests by Congress, HHS management, or the Office of Management and Budget; top management and performance challenges facing HHS; work performed by other oversight organizations (e.g., GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact. In addition to working on projects that often result in audits, reviews, and reports, the OIG also engages in a number of legal and investigative activities that are separately reported.

5 New Projects Added

  1. Secretary Price’s Use of Chartered Aircraft for Federal Travel. Federal Travel Regulations provide limited instances in which chartered aircraft can be used for official Government business. OIG initiated a review of HHS Secretary Price’s use of chartered aircraft for Federal travel. He subsequently resigned and agreed to payback funds improperly expended.

 

  1. Specialty Drug Coverage and Reimbursement in Medicaid. Medicaid spending on specialty drugs has rapidly increased. There is no standard definition for specialty drugs. They may be expensive; be difficult to handle, monitor or administer; or treat rare, complex or chronic conditions. OIG plans are to determine states’ definitions of, and payment methodologies for, Medicaid specialty drugs and determine how much states paid for specialty drugs; and review strategies that states use to manage specialty drug costs, such as formularies, cost sharing, step therapy, and prior authorization.

 

  1. FDA Oversight of Risk Evaluation and Mitigation Strategies to Address Prescription Opioid Abuse. Opioid abuse and overdose deaths are at epidemic levels in the United States. The FDA has been provided legal authority to require pharmaceutical companies to develop Risk Evaluation and Mitigation Strategies (REMS), when the FDA determines that the risk of using a drug outweighs its benefit. Through the REMS program, the FDA intends to “increase the number of prescribers who receive training on pain management and safe prescribing of opioid drugs in order to decrease inappropriate opioid prescribing.” The OIG will conduct an evaluation on how the FDA determined the need for opioid REMS and determine the extent to which they have held pharmaceutical companies with required opioid REMS accountable for REMS assessments. The OIG also plans to determine the extent to which the FDA has held opioid REMS sponsors accountable for REMS goals to mitigate risks of misuse, abuse, addiction, overdose, and serious complications because of medication errors.

 

  1. Drug Traceability Test. Potentially dangerous drugs, including diverted, counterfeit, and imported unapproved drugs, can enter the supply chain and pose a threat to public health and safety. The Drug Supply Chain Security Act (DSCSA) provides the FDA and others with new tools to prevent the introduction of harmful drugs into the supply chain and to identify and remove them. DSCSA requires trading partners to exchange drug product tracing information when they take ownership of drugs, resulting in a tracing record that the FDA and others can use to investigate suspect and illegitimate drugs. Ensuring that DSCSA’s drug product tracing requirements function as intended will help the FDA respond effectively to potentially harmful drugs in the supply chain. The OIG plans to determine the extent to which selected drugs can be traced from the dispenser back to the manufacturer. This study—part of OIG’s body of work in this area—builds on the OIG’s previous examinations of trading partners’ early experiences exchanging drug product tracing information by testing the accuracy of those tracing records.

 

  1. Review of Medicare Payments for Bariatric Surgeries. Bariatric surgery is performed to treat comorbid conditions associated with morbid obesity. Medicare Parts A and B cover certain bariatric procedures if the beneficiary has (1) a body mass index of 35 or higher, (2) at least one comorbidity related to obesity, and (3) been previously unsuccessful with medical treatment for obesity. Treatments for obesity alone are not covered. The Comprehensive Error Rate Testing program’s special study of certain Healthcare Common Procedure Coding System codes for bariatric surgical procedures found that approximately 98 percent of improper payments lacked sufficient documentation to support the procedures. OIG auditors will review supporting documentation to determine whether bariatric services performed met the conditions for coverage and were supported in accordance with federal requirements.

 

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

Despite uncertainty about ACA most states moving forward with Medicaid expansion

Although the future of Medicaid funding is unclear with the ongoing efforts to repeal and replace the Affordable Care Act (ACA) (P.L. 111-148), many states were still working to expand Medicaid services and benefits, according to a joint Kaiser Family Foundation (KFF) and Health Management Associates (HMA) report. In an annual survey collecting data about Medicaid policies in place or implemented in fiscal year 2017 and policy changes that will be implemented or are being discussed for fiscal year 2018 in each state and the District of Columbia, KFF and HMA noted that some of the biggest changes are occurring in eligibility policies, managed care reforms, and the expansion of benefits.

Eligibility and Premiums

In 2017, seven states made changes to expand Medicaid eligibility and in 2018 another seven are planning to implement eligibility expansions. These changes include eliminating the 5-year bar on Medicaid eligibility for lawfully-residing immigrant children or providing coverage for a new eligibility group of individuals who are chronically homeless, justice-involved, or in need of substance abuse or mental health treatment with an income below 5 percent of the federal poverty level. A few states are looking to make changes to restrict Medicaid eligibility by imposing work requirements and asset tests.

In recent years, many states have made changes to the way Medicaid coverage is handled when beneficiaries are in the criminal justice system. Some states have opted to suspend coverage when someone is incarcerated rather than terminate coverage, as they have done previously, so it is easier to reinstate coverage when the beneficiary is released. Additionally, some states have developed initiatives to work with and train criminal justice employees to assist with Medicaid applications after a person is released.

Managed Care

Twenty-nine of 39 states with risk-based managed care organizations (MCOs) reported that 75 percent or more of their Medicaid beneficiaries were in enrolled in MCOs as of July 1, 2017. Most states carve-out certain services, such as behavioral health services, from their MCO contracts. In 2017 at least six states took steps to carve in behavioral health services into their MCO contracts and ten states reported plans to work toward carving in behavior health services in 2018. Twenty-six of the 39 MCO states reported that they would use the funds available for inpatient psychiatric treatment or substance use treatment under the 2016 Medicaid Managed Care Final Rule; however, many states commented that the 15-day limit was too restrictive for the type of treatment that it was meant to cover. Sixteen states in 2017 and 17 states plan in 2018 to include specific initiatives to encourage MCOs that cover LTSS to expand access to home and immunity-based services (HCBS).

Benefits

Twenty-six states reported new or enhanced benefits in 2017 and 17 states plan to add or enhance benefits in 2018. These added benefits include mental health and substance use disorder services, alternative plain therapies, family planning and cancer screenings. Nineteen states reported new or expanded initiatives to expand dental access or improve oral health outcomes in 2017 or 2018. Additionally, 19 states reported initiatives to expand the use of telehealth in 2018 or 2019. For 2018, 22 states reported plants to adopt or expand initiatives such as patient-centered medical homes or accountable care organizations in an effort to encourage integrated care. Fourteen states in 2017 and 13 states plan in 2018 to report expansions and additions to the HCBS programs, including personal supports, supported employment, home delivered and medically tailored meals among others.

Although most states are continuing to look ahead to expand Medicaid benefits and eligibility, almost all states are still concerned about the negative fiscal consequences that they would face in the proposed limits on federal Medicaid spending. Medicaid directors from the 32 ACA Medicaid expansion states reported the states would not be able to continue providing coverage for expansion population, or the coverage would be at a substantial risk, if the ACA federal match was terminated.

Expiration of federal funding threatens state CHIP programs

In light of the fact that federal funding for the Children’s Health Insurance Program (CHIP) expired on September 30, 2017, the Kaiser Family Foundation (KFF) analyzed the impact upon states and potential outcomes. Without an extension of federal funding for CHIP, KFF reported that states have or will run out of federal CHIP funding and may face budget shortfalls for CHIP, which covered 8.9 million children in 2016.

According to KFF under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) the enhanced federal funding matching rate was further increased by 23 percent. With this, the CHIP federal matching rate ranged from 88 percent to 100 percent. Because nearly all the states included federal funding for CHIP when creating their FY 2018 state budgets, nearly all the states will face a budget shortfall if the federal funding is not extended.

In the absence of an extension of federal funding for CHIP, some states will have to reduce CHIP coverage. States that have CHIP-funded Medicaid expansions must maintain the underage under the ACA “maintenance of effort” requirement, leaving state costs to increase in the face of lower federal Medicaid match rate. However, states with separate CHIP coverage are not required to maintain it, and states may freeze enrollment or discontinue CHIP coverage altogether.

In the short run, states can continue to use federal funding accrued through the September 30 expiration. Eleven states reported that they would run out of federal funding for CHIP by the end of FY 2017, and at least one state reported that their funding would be depleted at the expiration date. By redistribution of unspent CHIP funds, the Centers for Medicare and Medicaid Services (CMS) was able to provide enough additional funding to allow that state to maintain coverage without a budget shortfall through October. CMS was also able to provide redistributed funds to several other states that were close to running out of funds.

In order to address the expected states’ budget shortfalls, Congress is working on legislation for continued funding. Both the Senate and the House have reported bills out of committee to provide an extension of federal funding for CHIP. The bills from the House and Senate contain many of the same provisions, including a five-year extension for federal funding of CHIP and a transition down from the enhanced 23 percent match provided by the ACA. However, the House bill includes some additional provisions not included in the Senate bill. Both bills still need to be debated and voted upon by the full House and Senate, and if both are passed, Congress will have to reconcile the difference between the two bills.

Narrow MA networks reduce cost at what price?

More than one-third (35 percent) of Medicare Advantage enrollees were in “narrow” network plans, which insurers create to greater control the costs and quality of care provided to enrollees in the plan. According to a Kaiser Family Foundation (KFF) report, the size and composition of Medicare Advantage provider networks is particularly important to enrollees when they have an unforeseen medical event or serious illness. As of 2017, 19 million of the 58 million people on Medicare are enrolled in a Medicare Advantage plan, yet KFF noted that little is known about their provider networks.

Accessing this information may not be easy for enrollees and comparing networks could be especially challenging. The report noted that beneficiaries could face significant costs if they unknowingly went out-of-network. In addition to the differences across plans, the report discussed questions for policymakers about the potential for wide variations in the healthcare experience of Medicare Advantage enrollees across the country.

Findings

KFF examined data from 391 plans, offered by 55 insurers in 20 counties, which accounted for 14 percent of all Medicare Advantage enrollees nationwide in 2015. In addition to the narrow network plans, Medicare Advantage networks included less than half (46 percent) of all physicians in a county, on average. The network size also varied greatly among Medicare Advantage plans offered in a given county.

For example, while enrollees in Erie County, NY had access to 60 percent of physicians in their county, on average, 16 percent of the plans in Erie had less than 10 percent of the physicians in the county while 36 percent of the plans had more than 80 percent of the physicians in the county. Access to psychiatrists was more restricted than for any other specialty. Medicare Advantage plans had 23 percent of the psychiatrists in a county, on average; 36 percent of plans included less than 10 of psychiatrists in the county. Some plans provided relatively little choice for other specialties as well—20 percent of plans included less than 5 cardiothoracic surgeons, 18 percent of plans included less than 5 neurosurgeons, 16 percent of plans included less than 5 plastic surgeons, and 16 percent of plans included less than 5 radiation oncologists.

Conversely, broad network plans tended to have higher average premiums than narrow network plans, and this was true for both HMOs ($54 versus $4 per month) and PPOs ($100 versus $28 per month).

KFF noted that CMS should consider strategies to improve the quality of information available to current and prospective Medicare Advantage enrollees. For instance, accurate, up-to-date provider directories to inform beneficiaries as they choose plans, along with the agency’s proposal to review all Medicare Advantage networks at least every three years.