Kusserow on Compliance: Three new projects added to the OIG Work Plan in April

The OIG regularly updates its Work Plan as it continues to assess relative risks in HHS programs and operations that may lead to new projects. The most recent changes involved adding six new projects to the OIG’s audits and evaluations that are planned or underway. In making these additions, the OIG considered 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., the GAO); management’s actions to implement OIG recommendations from previous reviews; and potential for positive impact.

New Projects Added

  1. Medicaid Nursing Home Supplemental Payments will be reviewed by the Office of Audit Services for completion in fiscal year (FY) 2019. Prior OIG and GAO audits have found that Federal supplemental payments often benefit the state and local governments more than the nursing homes. The OIG plans to review the nursing home supplemental payment program’s flow of funding and determine how the funds are being used. CMS approved a nursing home supplemental payment program in certain states that pays the difference between Medicare and Medicaid rates for nursing home services. In some of these programs, local governments fund the states’ share of the supplemental payments through intergovernmental transfers.

 

  1. The OIG plans to review the extent to which drug formularies developed by Part D sponsors include drugs commonly used by dual-eligible beneficiaries as required. The Patient Protection and Affordable Care Act (ACA), under Section 3313, requires OIG to conduct this review annually. This will be the eighth report issued. The work will be performed by the Office of Evaluation and Inspections with a target completion date of FY 2018.

 

  1. Audit of CMS Medicare Overpayment Recoveries Related to Prior OIG Recommendations, targeted for completion in FY 2019. In the last couple of years, the OIG issued 153 audit reports that related to the Medicare program, containing 193 monetary recommendations totaling $648 million. Of the $648 million in recommended overpayment recoveries, CMS agreed to collect $566 million applicable to 190 recommendations. The OIG plans to determine the extent to which CMS: (1) collected agreed upon Medicare overpayments identified in OIG audit reports and (2) took corrective action in response to the recommendations in a prior audit report examining CMS’ overpayment recoveries (A-04-10-03059). In that report, OIG recommended CMS enhance its systems and procedures for recording, collecting, and reporting overpayments. The OIG also recommended that CMS provide guidance to its contractors on how to document that overpayments were actually collected.

 

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 © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Addressing the risk of whistleblowers

The DOJ recently reported the fact that 93 percent of its successful civil false claims court actions arose by qui tam relators (whistleblowers) bringing the case to the DOJ’s attention. As such, it is important to understand better how to address the risk of having that happen to your organization. Key factors to be considered are the motivation of most whistleblowers and how to channel them to report internally, rather than going to outside authorities.

Tom Herrmann, JD, while at the OIG, was responsible for coordinating whistleblower cases with the DOJ.  He noted that the common practice for the DOJ, upon receiving a complaint from a qui tam relator, is to have the OIG conduct the preliminary investigation on their behalf. Inasmuch as these False Claims Act (FCA) cases were civil in nature, it was not the usual course to involve the FBI.  As such, he had the opportunity to review the initial complaints and often times meet or discuss with the relator about what caused them to report the problem. He found that there were many reasons given by individuals for becoming qui tam relators. e HhOnly a few qui tam relators indicated their motivation was for the potential reward coming from the case. The most common statement was that because they were unable to obtain a credible, internal reporting channel, they decided to report externally. Credence was given to this as a major motivating factor by the fact that in many cases they did find evidence of many Whistleblowers having reported the problem internally first, and moved to report externally when inadequate attention was give to their complaints. There were also whistleblowers who stated they were motivated by ethical considerations and felt they could not justify allowing a bad situation to continue without taking some sort of action.

Steve Forman, CPA, has over 30 years experience with the OIG, as a compliance officer, health care consultant. He found many situations where an employee’s reporting a potential violation of law, regulation, or organization Code or policy was the subject of adverse action or reprisal.  In some cases, the whistleblower moved to a legal course of action to protect themselves.  Unfortunately, it is not uncommon to find members of management engaging in retaliatory actions against employees trying to expose wrongdoing. In some cases, these same people turned to attorneys who led them to become qui tam relators. A key factor in managing the risk of having a whistleblower is to understand what motivates them to go externally with and report a problem; and try to channel them to resolve the issue internally.  It is also important to remember that making the decision to report a problem to the compliance officer is viewed as taking considerable risk with regards to their job, reputation with their fellow employees, and their future financial security.  Reassurance of protection against retaliation is critical. However, for some, that may be not enough.  This means the option to report anonymously is also important.

Carrie Kusserow has overseen many IRO and Compliance Expert engagements with clients who signed Corporate Integrity Agreements with the OIG. She noted that in several cases, while carrying out the duties of the engagement, her consultants identified the original whistleblower and found in several cases they had tried to raise the issues internally, before deciding to go outside the organization and become a qui tam relator. In other cases, the whistleblower reported not trusting the hotline or compliance office to protect them against retaliation. The lesson to be learned about avoiding external whistleblowing is to ensure that internal compliance channels operate credibly and properly. This also means taking prompt action to follow on any complaints or allegations of wrongdoing. It also means that strong policies and procedures to protect individuals reporting potential wrongdoing must be implemented and followed. This includes permitting employees to be able to report anonymously or if they do identify themselves that they will be detected in their confidentiality law.

Tips for Compliance Officers

  1. Ensure reporting suspected wrongdoing is stressed in the code, policies and training
  2. Review and update hotline-related polices/procedures (confidentiality, anonymity, non-retaliation, duty to report, etc.)
  3. Ensure a 24/7 hotline operated externally, as internal ones are less trusted and unavailable at all times
  4. Look to expand and increase compliance communication channels beyond just the hotline
  5. Promote the reporting of wrongdoing (newsletter, intranet, training programs, etc.)
  6. Find ways to provide feedback so that employees know reporting is taken seriously
  7. Consider engaging experts to evaluate compliance communication channels effectiveness
  8. Allegations of potential violations of law or regulations must be promptly investigated
  9. Ensure that individuals are trained and competent to conduct prompt investigations
  10. Disclose promptly all cases where investigation indicates potential violations
  11. Review and update investigation and resolution of allegations polices/procedures
  12. Take appropriate disciplinary action against identified wrongdoers
  13. Consider having on call experts in conducting investigations to assist if needed
  14. Understand CMS and OIG self disclosure protocols that may avoid FCA investigation
  15. Ensue investigations finding of potential violations of law are promptly disclosed to the DOJ

 

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.

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

Kusserow on Compliance: OIG opinion on the effect of exclusion

OIG Advisory Opinion 18-01 was issued in response to a request regarding the effect of an exclusion from Medicare, Medicaid, and all other Federal health care programs. As a result of criminal conviction for health care fraud pursuant to a civil False Claims Act (FCA) settlement, the Requestor agreed to be permanently excluded. The Requestor received a good faith employment offer from a newly formed, for-profit corporation that will be offering long-term care pharmacies (the LTC Pharmacies) access to discounted rates for emergency medications that the company negotiates with local retail pharmacies. The prices the company would charge for the medications the LTC Pharmacies obtain from the local retail pharmacies would be the discounted rate the company negotiated with the local retail pharmacies, plus a mark-up. The Requestor inquired whether the engagement proposal to market its services (the Proposed Arrangement) would violate the terms of the exclusion and constitute grounds for the imposition of sanctions.

The OIG concluded that, although the Proposed Arrangement could violate the terms of the exclusion and could constitute grounds for the imposition of sanctions, the OIG would not impose such sanctions in connection with the Proposed Arrangement, based upon the following representations:

  • Neither the Requestor nor the company would directly submit claims for items or services that are paid for by any federal health care program, including any medications the LTC Pharmacies obtain from the local retail pharmacies; and would not directly or indirectly have any role in the LTC Pharmacies’ or their customers’ submission of claims to any federal health care program.
  • Neither the Requestor nor the company would submit claims to Medicare, Medicaid, or any other federal health care program for any items or services provided in connection with the Proposed Arrangement.
  • The Requestor would market the company’s services to the LTC Pharmacies and offer them the opportunity to contract with the company to receive lower prices than they normally would pay when ordering emergency medications from a local retail pharmacy.
  • Neither the Requestor nor the company would exercise any direct or indirect control over determining the volume, type, and frequency of any medications they would need or order.
  • The company would pay the Requestor a fixed salary plus a commission based on the number of LTC Pharmacy accounts the Requestor secured for the company with no compensation determined based on the volume, value, frequency, price, or selection of any medications, including federally reimbursable medications, the LTC Pharmacies or their customers would order.
  • Neither the Requestor, nor any member of the immediate family would have direct or indirect control of the company.

 

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: OIG estimates $4.4B in savings in 2017

The HHS Office of Inspector General (OIG) issued its second Semiannual Report to Congress for 2017 summarizing achievements for the year that included estimated savings of $4.4 billion as result of its work.   It reported over $4 billion in “investigative” receivables for the full year from expected recoveries from criminal actions, civil and administrative settlements, civil judgments, and administrative actions by OIG. In addition, it reported almost $300 million in audit findings. For the year, the OIG brought criminal actions against 881 individuals or organizations, and 826 civil actions, including false claims and unjust-enrichment lawsuits filed in federal district court, civil monetary penalty settlements, and administrative recoveries related to provider self-disclosure matters. The OIG cited some of the major fraud enforcement actions for the year that included the largest national health care fraud takedown in history, involving more than 400 defendants in 41 federal districts and $1.3 billion in false billings to Medicare and Medicaid.

The largest body of work involves investigating matters related to the Medicare and Medicaid programs, such as patient harm; billing for services not rendered, medically unnecessary services, or services more extensive than those actually provided; illegal billing, sale, diversion, and off-label marketing of prescription drugs; and solicitation and receipt of kickbacks, including illegal payments to patients for involvement in fraud schemes and illegal referral arrangements between physicians and medical companies. The OIG also investigates cases involving organized criminal activity, medical identity theft, and fraudulent medical schemes that are established for the sole purpose of stealing Medicare dollars. Those who participate in these schemes may face heavy fines, jail time, and exclusion from participating in Federal health care programs. The OIG highlighted some of the most common criminal fraud scheme case types relating to (1) controlled and non-controlled prescription drugs, (2) home health agencies and personal care services, (3) ambulance transportation, (4) DME, and (5) diagnostic radiology and laboratory testing.

Highlighted major cases include actions taken against 120 opioid-related defendants, including 27 doctors. In addition, the OIG issued 295 exclusion notices related to the use and abuse of controlled substances. Other high profile OIG actions related to fraud allegations noted were against Mylan Inc. that agreed to pay $465 million; and eClinicalWorks, LLC (ECW) for $155 million.

 

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.