Kusserow on Compliance: OIG reports on the Senior Medicare Patrol (SMP) program

The OIG issued a report on the 2016 performance data for the Senior Medicare Patrol (SMP) program. It is a little known program for many people designed to empower and assist Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, and abuse through outreach, counseling, and education. SMPs are grant-funded projects of HHS, U.S. Administration for Community Living (ACL). They play a unique role in the fight against Medicare errors, fraud, and abuse. SMP volunteers and staff are viewed as “eyes and ears” in their communities, educating beneficiaries to be the first line of defense; a sort of ‘neighborhood watch” team. Their work involves conducting presentations to groups, exhibit at events, and work one-on-one with Medicare beneficiaries; engaging volunteers to protect elderly person’s health, finances, and medical identity while saving precious Medicare dollars is a cause that attracts civic-minded Americans; and receiving beneficiary complaints and determining whether it may involve fraud, errors, or abuse. When fraud or abuse is suspected, they make referrals to the appropriate state and federal agencies for further investigation.

The OIG used five performance measures pertaining to recoveries, savings, and cost avoidance; and another five performance measures relating to volunteer and outreach activities.  In 2016, there were 53 SMP projects that had a total of 6,126 total active team members who conducted a total of 26,220 group outreach and education events that reached an estimated 1.5 million people.   The projects also had 195,386 individual interactions with, or on behalf of, a Medicare beneficiary.  The projects reported $163,904 in cost avoidance on behalf of Medicare, Medicaid, beneficiaries, and others. Savings to beneficiaries and others totaled $53,449. Expected Medicare recoveries totaled $2,672. Further, two projects provided information to federal prosecutors that resulted in settlements totaling an additional $9.2 million in expected Medicare recoveries. There were no expected Medicaid recoveries.

Compared to 2015, the projects reported much higher amounts for cost avoidance ($163,904, up from $21,533) and somewhat higher amounts of savings to beneficiaries and others ($53,449, up from $35,059). However, the projects reported significantly lower expected Medicare recoveries ($2,672, down from $2.5 million). The projects reported no Medicaid recoveries in either year. Some common examples of suspected Medicare fraud or abuse identified by the SMP include:

  • Billing for services or supplies that were not provided
  • Providing unsolicited supplies to beneficiaries
  • Misrepresenting a diagnosis, beneficiary’s identity, service provided, or other facts
  • Prescribing or providing excessive or unnecessary tests and services
  • Violating the participating provider agreement with Medicare by refusing to bill Medicare for covered services or items and billing the beneficiary instead
  • Offering or receiving a kickback (bribe) in exchange for a beneficiary’s Medicare number
  • Requesting Medicare numbers at an educational presentation or in an unsolicited phone call
  • Routinely waiving co-insurance or deductibles

The OIG noted that the projects may not be receiving full credit for recoveries, savings, and cost avoidance attributable to their work. It is not always possible to track referrals to Medicare contractors or law enforcement from beneficiaries who have learned to detect fraud, waste, and abuse from the projects. In addition, the projects are unable to track the potentially substantial savings derived from a sentinel effect, whereby Medicare beneficiaries’ scrutiny of their bills reduces fraud and errors.

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.

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.

The ACA makes a measureable difference with HIV coverage

People with HIV experienced significant coverage gains under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) as a result of Medicaid expansion, the creation of the health insurance marketplaces, and the elimination of pre-existing condition exclusion. According to a Kaiser Family Foundation (KFF) Issue Brief, as long as the future of the ACA remains uncertain, those access and coverage gains are at risk.

Baseline

To develop a baseline for understanding current access to care for people with HIV, KFF examined multiple variables across the three main pathways for HIV coverage and care: (1) Medicaid, (2) private insurance and the ACA marketplace, and (3) the Ryan White HIV/AIDS program. KFF considered factors like states’ Medicaid expansion status, the number of health insurance issuers per county, and AIDS Drug Assistance Program (ADAP) eligibility levels.

Medicaid 

Prior to the ACA’s Medicaid expansion, most individuals with HIV obtained Medicaid coverage through the disability pathway, meaning that coverage was often not obtained prior to a beneficiary’s development of AIDS. Currently, 62 percent of people with HIV live in a Medicaid expansion state, where care is more likely to be accessible through the income pathway, regardless of disability level. Additionally, 24 states provide Medicaid coverage through the disability pathway above the federally mandated level of 73 percent of the federal poverty level (FPL).

Marketplaces 

In 33 states, where 83 percent of people with HIV live, there are three or more issuers in the ACA marketplace. While five states—Arkansas, Oklahoma, South Carolina and Wyoming—had only one issuer in 2017, some states had several. For example, Wisconsin had 15 insurers, New York had 14, and California had 11. KFF also looked at issuer representation in counties with high incidence of people with HIV. While 43 percent of people with HIV live in one of the eighteen (18) states with an average of three or more issuers per county, the majority of people with HIV—57 percent—live in one of the 33 states with less competition—one or two issuers per county.

Ryan White

The Ryan White HIV/AIDS Program provides outpatient HIV care and treatment to low and moderate income individuals. The program serves more than half of the people diagnosed with HIV in the country. The average eligibility level for the medication assistance program is 386 percent FPL. While 17 states use an eligibility level of 400 percent, 72 percent of people with HIV live in a state with eligibility levels at or above the national average. While the Ryan White program would continue to operate with an ACA repeal, many individuals currently covered by marketplace or Medicaid plans would likely turn to the program for coverage. Due to the program’s limited resources, KFF estimates that such an over-reliance could cause individuals to lose access to care.

All Medicare stakeholders need to know MACRA

Although the Medicare Access and CHIP Reauthorization Act (MACRA) (P.L. 114-10) is best known for changing Medicare provider payments, its true goal is improving the quality of care delivery across the health spectrum. As a result, according to Todd Gower and Lisa Alfieri from the Risk Transformation, Health compliance sector of EY, providers must enhance their relationships and contracts with providers. Gower and Alfieri, speaking at a Health Care Compliance Association (HCCA) webinar titled “MACRA: Not just for Providers,” explained that having the proper infrastructure to obtain and organize all necessary documentation is the key to surviving MACRA.

Gower and Alfieri stressed the need for new discussions within health systems, noting that MACRA has potential to transform the health care system “equally, if not far more” than the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). As it implements MACRA, HHS is having new conversations with stakeholders including whether the shared risk will actually improve care, and whether the current proposed criteria (see Halfway through QPP ‘transition year,’ CMS proposes substantial changes , June 21, 2017) are too restrictive. They praised HHS’ website on the Quality Payment Program as a new way to communicate with providers and other stakeholders.

MACRA is a complex law with wide-reaching repercussions. Gower and Alfieri suggested infrastructure updates, and predicted that the most-advanced providers will be seeking commercial payer partners by 2019 to maximize incentives for value-based care (VBC) payment models. Therefore, payers should create or enhance existing VBC offerings now to meet that expected need. MACRA steering committees are important to ensure compliance and update risk management programs for providers, but also for non-provider groups.