Kusserow on Compliance: OIG testimony highlights opioid crisis actions

Gary Cantrell, HHS OIG Deputy Inspector General for Investigations, testified before a Senate Special Committee hearing on enforcement activities currently underway to combat the opioid crisis. He provided key policy recommendations to address the crisis. Opioid fraud encompasses a broad range of criminal activity from prescription drug diversion to addiction treatment schemes. Many of these schemes can be elaborate, involving complicit patients or beneficiaries who are not ill, kickbacks, medical identity theft, money-laundering, and other criminal enterprises. Some schemes also involve multiple co-conspirators and health care professionals such as physicians, nonphysician providers, and pharmacists. These investigations can be complex and often involve the use of informants, undercover operations, and surveillance. The OIG provided critical support in the establishment of the new Opioid Fraud and Abuse Detection Unit established by the Attorney General to focus on opioid-related health care fraud. This collaboration led to the selection of 12 judicial districts around the country where OIG has assigned Special Agents to support 12 prosecutors identified by the DOJ to focus solely on investigating and prosecuting opioid-related health care fraud cases.

The OIG collaborates with a number of HHS agencies, including CMS and the Agency for Community Living (ACL), on fraud- and opioid-related initiatives to educate providers, the industry, and beneficiaries on the role each one plays in the prevention of prescription drug and opioid-related fraud and abuse. The OIG is engaging ACL’s Senior Medicare Patrol and State Health Insurance Assistance Program through presentations on the prevention of fraud, waste, and abuse. The OIG is also working with the DEA to provide anti-fraud education at numerous Pharmacy Diversion Awareness Conferences held across the United States, which are designed to assist pharmacy personnel with identifying and preventing diversion activity.

OIG currently has numerous opioid-related audits or evaluations underway that address:

  • questionable prescribing patterns in Medicaid;
  • Medicaid program integrity controls;
  • Medicare program integrity controls in the prescription drug benefit;
  • CDC’s oversight of grants to support programs to monitor prescription drugs;
  • FDA’s oversight of opioid prescribing through its risk management programs;
  • SAMHSA’s oversight of opioid treatment program grants;
  • beneficiary access to buprenorphine medication-assisted treatment; and
  • opioid prescribing practices in the Indian Health

In the OIG’s data brief entitled Opioids in Medicare Part D: Concerns about Extreme Use and Questionable Prescribing and other reports, the OIG noted the following:

  • 60,000 individuals died from drug overdoses in 2016, of which two-thirds involved opioids
  • The CDC reported 75 percent new heroin users having abused prescription opioids prior to using heroin.
  • One in three Medicare Part D beneficiaries received opioids (14.4 million beneficiaries)
  • 500,000 beneficiaries received high amounts of opioids
  • 90,000 beneficiaries were at serious risk of opioid misuse or overdose for receiving extreme amounts of opioids and those who appeared to be “doctor shopping”
  • 70,000 beneficiaries received extreme amounts of opioids
  • 22,308 beneficiaries appeared to be doctor shopping for more opiods
  • 400 prescribers had questionable opioid prescribing for beneficiaries at serious risk
  • Prescribers with questionable billing wrote 265,260 opioid prescriptions for beneficiaries at serious risk at a cost under Part D for $66.5 million

The OIG is planning to release a new data brief on opioid use in Medicare Part D as a follow-up to a previous data brief, Opioids in Medicare Part D: Concerns About Extreme Use and Questionable Prescribing (OEI-02-17-00250) to: (1) determine the extent to which Medicare Part D beneficiaries received high amounts of opioids; (2) identify beneficiaries who are at serious risk of opioid misuse or overdose; and (3) identify prescribers with questionable opioid prescribing patterns for these beneficiaries.  In conjunction with this, they will release an analysis toolkit to assist the public and private sector in analyzing prescription drug claims data.  It will provide steps for using prescription drug data to analyze patients’ opioid levels and identify those at risk of opioid misuse or overdose or who appear to be doctor shopping.

The OIG has made numerous pending recommendations to improve HHS programs to better protect beneficiaries at risk of opioid misuse or overdose, including:

  • Restrict certain beneficiaries to a limited number of pharmacies or prescribers, implementing the new lock-in authority.
  • Require plan sponsors to report to CMS all potential fraud and abuse and any corrective actions they take in response; and provide guidance on how Part D sponsors identify and investigate these matters.
  • Improve Medicaid CMS does not have complete and accurate data needed to effectively oversee the Medicaid program, including opioids. OIG call for CMS to establish a deadline for when national T-MSIS data will be available for multistate program integrity efforts.

 

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.

Study finds weak results for outcomes-based drug contracts

There is no evidence that outcomes-based pharmaceutical contracts lead to less spending or higher quality health care, according to a study conducted by the Commonwealth Fund. The limited impact of outcomes-based reimbursement may be due to the fact that the reimbursement model is only used for a small subset of drugs which offers limited metrics to evaluate the model’s effectiveness. The Commonwealth Fund suggested that voluntary testing and more rigorous evaluation could lead to better understanding of outcomes-based pharmaceutical reimbursement.

Outcomes-based

Following the trend towards value-based reimbursement in health care, some pharmaceutical manufacturers and private payers have made a push towards an outcomes-based pricing model in the prescription drug market. Outcomes-based models attach rebates and discounts to the health care outcomes observed in the patients who receive certain drugs. The purported goal of such arrangements is to improve the value of pharmaceutical-based care by paying more for drugs that work and less for drugs that do not. The reimbursement model appeals to manufacturers and payers as a means to increase the scope of formularies and coverage while reducing prices.

Restrictions

The outcomes-based model is limited by the fact that the model cannot apply to pharmaceuticals that do not have reliable outcomes measurements. Additionally, the outcomes measurements that do exist typically rely on claims data and exclude significant clinical outcomes. In other words, the outcomes-based contracts may not lead to optimized value because the actionable outcomes are limited to those that can be measured. Thus, while outcomes-based pharmaceutical reimbursement has the potential to increase the value of pharmaceutical treatments, greater evaluation of the model’s effectiveness and implementation is necessary to determine its true benefit.

Prescription drug spending in U.S. among highest worldwide

Prescription drug spending in the United States exceeds spending in nine other high income countries, with generic drugs comprising 84 percent of the total pharmaceutical market. Besides the U.S., a Commonwealth Fund issue brief looked at prescription drug spending in Australia, Canada, France, Germany, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom.

Prescription drug spending in U.S. increases in 1990s

According to the Commonwealth Fund review, spending on prescriptions drugs increased substantially in the mid-1990s due largely to the growth of the pharmaceutical industry. For instance, FDA approved drugs were at an all-time high and sales of cancer drugs increased. Additionally, drug spending increased due to the expansion of federal programs such as the Children’s Health Insurance Program, Medicaid, and Medicare.

Prescription drug spending increased by 20 percent over a period of two years during the mid-2000s. The growth was primarily due to introducing many expensive specialty drugs to treat hepatitis C, cystic fibrosis and other conditions. Passage of the Affordable Care Act likely led to such increases as well. U.S. spending on pharmaceuticals surpassed $1,000 per person in 2015 and was 30 percent to 190 percent higher than in the nine other countries. The next countries, behind the U.S., in spending in 2015 were Switzerland with $783, Germany with $686, and Canada with $669.

Reasons U.S. spending on prescription drugs is so high

The Commonwealth Fund offered possible reasons to explain why the U.S. spends so much on prescription drugs, including country population and volume of drugs consumed, drug utilization per person, type and mix of drugs consumed (e.g., generics versus brand-name drugs), and prices at which drugs are sold.

Although the U.S. population is ranked among the largest and has the highest prescription drug spending as a country, spending per capita remains much higher in the U.S. than that of other countries. Higher per person spending is not due to the large population of the U.S., however.

The impact of generic prescription drugs

Generic drugs make up 84 percent of the total U.S. pharmaceutical market, which is a larger share than in all other countries, excluding the U.K., which is tied with the U.S. with 84 percent. Followed by the U.S. are Germany with 81 percent, Netherlands with 71 percent and Canada with 70 percent of the share of generic prescription drugs. Lower prescription drug prices in the other countries reflect more centralized processes for obtaining pharmaceuticals and setting coverage.

Conclusion. Price continues to play a primary factor in the high prices associated with prescription drugs in the U.S. The reasons can be attributed to the fragmented nature of health care delivery and payment, as well as separate negotiation arrangements between drug manufacturers and payers and complicated arrangements for federal and state health programs. Also, the U.S., unlike other countries, allows for greater latitude for monopoly pricing of brand name drugs.

Kusserow on Compliance: August update on OIG Work Plan—four new projects added

The OIG Work Plans set forth various audits and evaluations that are underway or planned during the fiscal year and beyond. In June this year, the OIG announced the adjusting of its Work Plan on a monthly basis, rather than semi-annually as has been done previously to ensure that it more closely align with the work planning process. The updates include the addition of newly initiated Work Plan items and the 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, including responding mandates set forth in laws, regulations, or other directives; and requests by Congress, HHS management, or the Office of Management and Budget.  The following are four new work plan projects added for this year:

  1. Review of the Patient Safety Organization Program (PSO) [OEI-01-17-00420]. The PSO program established federally to work with health care providers to improve the safety and quality of patient care; and created the first and only comprehensive, nationwide patient safety reporting and learning system in the United States. The OIG plans to determine the reach and value of the PSO program among hospitals and will also oversight and challenges of the PSO program.
  2. Duplicate Drug Claims for Hospice Beneficiaries [W-00-17-35802; A-06-17-xxxxx]. Hospice providers are required to render all services necessary for the palliation and management of a beneficiary’s terminal illness and related conditions, including prescription drugs. Medicare Part A pays providers a daily per diem amount for each individual who elects hospice coverage, and part of the per diem rate is designed to cover the cost of drugs related to the terminal illness. The OIG auditors plan to determine whether Part D continues to pay for prescription drugs that should have been covered under the per diem payments made to hospice organizations, following up on previous work performed in this area related to Part D drug claims for hospice benefits under Part A.
  3. Medicare Part B Payments for Psychotherapy Services [W-00-17-35801; A-09-17-xxxxx]. Medicare Part B covers the treatment of mental illness and behavioral disturbances in which a physician or other qualified health care professional establishes professional contact with a patient.  In calendar year 2016, Part B allowed approximately $1.2 billion for these psychotherapy services. The OIG will review Part B payments for psychotherapy services to determine whether they were allowable in accord with Medicare documentation requirements.
  4. Ventilation Devices: Reasonableness of Medicare Payments Compared to Amounts Paid in the Open Market [W-00-17-35803; A-05-xx-xxxxx]. Medicare reimbursement for ventilation devices has risen from $51 million in 2011 to $72 million in 2015. OIG auditors plan to determine the reasonableness of the fee schedule prices that Medicare and beneficiaries pay for ventilation devices compared to prices on the open market to identify potential wasteful spending in the Medicare program.

 

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.