Kusserow on Compliance: Congressional hearing on Medicare fraud

The HHS Deputy Inspector General for Audit Services provided Congressional testimony related to Medicare fraud and began by noting that Medicare spending $700 billion annually on behalf of 59 million beneficiaries has grown to the point where it is more than 15 percent of all federal spending. With increasing number of beneficiaries and rising health care costs, it is estimated that Part A Trust Fund will be depleted by 2026; and spending for Medicare Part B will grow by more than 8 percent over the next 5 years, outpacing the U.S. economy. Medicare and Medicaid improper payments reported by HHS was $90 billion a year with two thirds involving Medicare fee-for-service payments due to errors associated with insufficient or no documentation. Although improper payments may occur in all types of health care, home health, skilled nursing facility (SNF), and inpatient rehabilitation facility (IRF) are areas of particular concern, representing 33 percent of the overall estimated improper payment rate for Medicare fee-for-service.

Responding to this high level of improper payments, the OIG is using advanced data analytics help the agency more effectively assess risk and pinpoint oversight efforts. The OIG uses data analytics to analyze millions of claims and billions of data points. At the macro level, the OIG analyzes data patterns to assess fraud and other types of risk across Medicare services, provider types, and geographic locations to prioritize our work and more effectively deploy our resources. At the micro level, the OIG uses data analytics, including near- real-time data, to identify potential fraud suspects for more in-depth analysis and to efficiently target investigations. OIG enforcement efforts involve a three-pronged approach that focuses on prevention, detection, and enforcement. The CMS’s Fraud Prevention System (FPS) was cited as serving an important tool with data analytics and predictive analytics for fraud-detection.  Once suspected fraud is identified, the OIG investigate the facts and pursue enforcement to hold perpetrators accountable and recover misspent taxpayer dollars.

 

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: Four physicians charged in $200M prescription fraud scheme

A CEO and four physicians were charged in a superseding indictment in an investigation of a $200 million health care fraud scheme that involved a network of Michigan and Ohio pain clinics, laboratories, and other medical providers. Additional charges included wire fraud conspiracy, money laundering, and distribution of over 4.2 million medically unnecessary dosage units of controlled substances and medically unnecessary injections to Medicare beneficiaries, some of whom were addicted to narcotics. These included oxycodone, hydrocodone and oxymorphone. Some of the opioids were resold on the street.

When a medical review was made of the injection claims, it was found that 100 percent of the claims were not eligible for Medicare reimbursement. In order to conceal the continued billing of these fraudulent claims to Medicare, the defendants created new shell companies and continued to engage in the same billing of fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location. Defendants also owned a diagnostic laboratory to enable them to order medically unnecessary urine drug testing from the laboratory. When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement and ordered the diagnostic laboratory to repay $6.9 million in improper payments.

Another scheme involved money laundering in connection with a $6.6 million wire transfer and the withdrawal of $500,000 in cash, which was hidden in plastic bags in the closet of the house.  The indictment alleges that transferred proceeds derived from the conspiracy were used to allow the defendants to live an extravagant lifestyle and spend millions of dollars on luxury items—clothing from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost. The proceeds were also used to purchase a mansion and other real estate in the Detroit, Michigan area and to sit courtside or in the first row of NBA basketball games, including the NBA Finals.

 

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

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.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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.

Subscribe to the Kusserow on Compliance Newsletter

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