Kusserow on Compliance: Controls working to prevent Medicare Advantage capitation payments after beneficiaries’ death

The OIG released a report that stated CMS policies and procedures were generally effective in ensuring that capitation payments to Medicare Advantage (MA) organizations for Medicare Parts A and B services were not made on behalf of deceased beneficiaries after their death. The Medicare Access and Children’s Health Insurance Program Reauthorization Act of 2015 requires CMS to establish policies to ensure that payments are not made for Medicare services rendered after death of beneficiaries. In prior audits, the OIG identified problems in controls to prevent these kinds of Medicare payments. In this case, the OIG conducted an audit to determine effectiveness of CMS’s policies and procedures to prevent capitation payments to Medicare Advantage (MA) organizations for Medicare Parts A and B services after individuals’ dates of death.

Details of the audit report noted that during calendar years 2012 through 2015, CMS received updated beneficiary date-of-death information and then made approximately 1.8 million adjustments to capitation payments, thereby recouping $2.96 billion from MA organizations for Parts A and B capitation payments that had been made on behalf of beneficiaries who had died.  However, the OIG found that CMS did not identify and recoup all improper capitation payments. As of March 7, 2017, CMS had not recouped $2.4 million associated with 1,817 capitation payments that were made on behalf of 978 beneficiaries. The OIG noted these improper payments represented .0004 percent of the total capitation payments made to MA organizations and .08 percent of the total adjustments that CMS made after receiving information on beneficiaries’ dates of death.

The OIG recommended CMS (1) move to recoup the $2.4 million in capitation payments made to MA organizations on behalf of deceased beneficiaries and (2) implement system enhancements to identify, adjust, and recoup improper capitation payments in the future. CMS concurred with both of these recommendations and described corrective actions that it had implemented.

 

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.

Kusserow on Compliance: Health care mergers and acquisitions due diligence

Hardly a day passes when the press does not report on a new merger or acquisition in the healthcare sector.  Some of these are monumental in scope, but most relate to individual hospitals, facilities, or entities.  The number of hospital and health system mergers and acquisitions continued their upward trend in the first quarter of 2017, with an eight percent increase from 25 to 27 transactions compared to the first quarter of 2016.  This trend is likely to continue and is stimulated by health care reform that will likely result in more consolidation and integration among hospitals and physician practices.  There are two common types of due diligence; financial and legal.  However, the highly regulated nature of the health care industry requires a third type; regulatory due diligence to avoid discovering and having to make disclosures of regulatory violations and overpayments of millions of dollars.

Financial and Legal Due Diligence

Due diligence reviews generally focuses on financial accountability and legal liabilities. An independent accounting firm focuses on reviewing and evaluating the balance sheets, income statements, audit reports, and cash flow statements and projections in measuring financial viability. There are many very competent public accounting firms that specialize in this type of work. For legal due diligence, the focus is on examining the entity’s structure; business permits and/or approvals; employment and labor law compliance; environmental law approvals, permits and compliance; contractual rights and obligations; intellectual property rights and obligations; real property law compliance; securities and financing regulatory compliance; tax exposure risks; consumer protection law and exposure risks; and/or licenses; previous and/or current litigation; media reports; and external consultants and/or advisors. There are an abundant number of law firms that provide high quality services in this type of work.  What is often missing is focusing on the potential health care regulatory and legal compliance issues.

Health Care Regulatory Due Diligence

In the health care sector, things are more complicated, wherein health care facilities are subject to a tremendous number of state and federal laws and regulations that govern how business must be conducted. As such, there are significant risks that a purchaser can inherit serious regulatory liabilities without checking to see how the entity is complying with these rules. With the right experts with experience in doing this kind of work, the time and costs for the due diligence review be only a small fraction of the costs of either a financial or legal review. The reason is simple: financial and legal due diligence involves detailed examination of a large volume of information. Regulatory compliance experts know exactly where to look for any weaknesses without having to do a “deep dive.” As such, it is difficult to imagine why a party looking to make an acquisition would not want a regulatory due diligence. High on the list for any reviews should be arrangements with referral sources—the highest enforcement priority of both the DOJ and OIG for many years—and review of the claims processing system and controls to ensure that there are not regulatory issues waiting to be discovered by CMS contractors or enforcement agencies.  In virtually all cases, problems will be identified that in very few cases would interfere with the decision to acquire, but is very likely to not only avoid a future liability but puts on the table additional tools to improve the negotiation terms and conditions.

 

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.

Kusserow on Compliance: Questions Boards should be asking their compliance officer

Effective compliance programs require top-down commitment beginning at the Board level to oversee and support its implementation and operations.  The Board should have a committee to do this. The OIG compliance guidance calls for a Board level committee to oversee the Compliance Program (CP). The HHS Inspector General, General Dan Levinson has noted that the best boards as those that are active, questioning, and exercise (constructive) skepticism in their oversight. He further stated that Boards have a duty to ask probing questions about the operation of the Compliance Program, including how the compliance reporting system works and what reports they can expect on the reporting of compliance issues. They have a duty to ask probing questions about the goals and objective of the compliance program. The problem for most Boards is to know what type of questions they should be asking. Compliance Officers should assist them with this problem; however they in turn should be prepared to provide full and complete answers to them. The OIG and American Health Lawyers Association developed specific suggested questions that Board’s should be asking about the compliance program that the compliance officer should be prepared to provide proper responses to them. They jointly produced “Corporate Responsibility and Corporate Compliance: A Resource for Health Care Boards of Directors” and “Corporate Responsibility and Health Care Quality (2007): A Resource for Health Care Boards of Directors.” The following are drawn from these advisory documents:

  1. Does the compliance officer have sufficient authority to implement the program?
  2. What are the resources necessary to properly implement operate the program?
  3. Has compliance officer been given the sufficient resources to carry out the mission?
  4. Have compliance-related responsibilities been delegated across all levels of management?
  5. What evidence is there that all employees held equally accountable for compliance?
  6. How has the code been incorporated into corporate policies across the organization?
  7. What evidence is there that the code is understood and accepted across organization?
  8. Has management widely publicized importance of the code to all of its employees?
  9. Are there compliance-related policies that address operational compliance risk areas?
  10. Are there policies/procedures for the compliance program operation?
  11. How often are compliance-related policies reviewed and updated?
  12. What is the scope of compliance-related education and training?
  13. What evidence is there of the effectiveness of compliance training is effective?
  14. What measures are taken to enforce training mandates?
  15. What evidence that employees understand what is expected of them regarding compliance?
  16. How is compliance risks identified?
  17. What is the evidence that identified compliance risks are being addressed?
  18. How is the compliance program structured to address such risks?
  19. Does the compliance program undergo periodical independent effectiveness evaluation?
  20. What is the process for the evaluation and responding to suspected compliance violations?
  21. What kind of training is provided to those who conduct investigation of reported violations?
  22. How does Compliance, HRM & Legal Counsel coordinate resolving compliance issues?
  23. What are the policies to ensure preservation of relevant compliance program documents and information?
  24. What policies address protection of “whistleblowers” and those accused of misconduct?
  25. What are the results of ongoing compliance monitoring by all program managers?
  26. How is ongoing compliance auditing being performed and by whom?
  27. How often is sanction-screening conducted with what results?
  28. What are the results from sanction-screening and are they certified by responsible parties?
  29. Has the compliance program been evaluated for effectiveness by a qualified independent reviewer?
  30. What evidence is there concerning hotline operation and follow-up investigations?
  31. What are the metrics being used to evidence compliance program effectiveness?
  32. What are the results of an independent review and assessment of the compliance 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.

Kusserow on Compliance: Oncology remains high federal enforcement priority

Oncology continues to be a high enforcement priority for the DOJ, OIG, FBI, and CMS.  The latest fraud investigation by the DOJ involves CCS Oncology, large and prominent providers of cancer care. The reported question being investigated relates to possible billing irregularities involving Medicare and Medicaid. As with most cases related to oncology irregularities, the predication was by a “whistleblower.” The complaint alleges CCS billed for more expensive procedures than were actually performed, billed for procedures that never were performed, and performed medically unnecessary procedures on patients, among other violations, according to the source. The stream of cases is long enough to outline key factors that have led to settlements with the DOJ and OIG. Compliance Officers, whose portfolio of responsibilities include oncology services may wish to review the following to ensure none of these factors are at work in a manner that may trigger investigation.

Common Oncology Enforcement Issues

  1. Employees knowingly submitted false records to Medicare and Medicaid to increase revenue
  2. Claims submitted for services performed without required physician supervision
  3. Offering unnecessary treatments and services to patients
  4. Recruitment and treatment of terminal patients that should have been referred to hospice care
  5. Re-treatment of patients in excess of prescribed dosage limits
  6. Claims for services when physician reviews had not taken place
  7. Claims where treatment occurred without prior required IGRT scan
  8. Physicians allowed registered nurses to fill out prescriptions for medications
  9. Offering inducements (“kickbacks”) to patients by waiving their co-pays
  10. Conducting not necessary fluorescence in situ hybridization (FISH) tests for bladder cancer
  11. Filing payment claims for GAMMA functions by improperly trained physicians and staff
  12. Seeking payments for tests whose results doctors had not reviewed
  13. Billing E&M services on the same day as a related procedure
  14. Double and over-billing Medicare for services that lacked supporting documentation
  15. Improperly billing for radiation treatment without proper physician supervision
  16. Submitting false claims for magnetic resonance imaging (MRI) services
  17. Billing for services that were not documented in the patients’ medical records
  18. Billing twice for the same services
  19. Misrepresentation of the level of a service provided to increase reimbursement
  20. Routinely waived patient copayments as an inducement, then billing Medicare for them.
  21. Claims for services not performed, medically necessary, and/or properly documented
  22. Claims for services rendered to patients referred by physicians benefiting from referral
  23. Purchasing cancer treatments from unlicensed sources for oncology practice
  24. Diluting patients’ chemotherapy treatments and delivering in a manner designed to extend period of treatment time
  25. Claims for medically unnecessary or properly documented intensity-modulated radiation therapy (IMRT)
  26. Unsupported add-on claims for “special treatment procedures” and “specialty physics consults”
  27. Violating the Stark Laws and Anti-Kickback statute by rewarding referring physicians