Kusserow on Compliance: GAO calls for CMS to mitigate program risks in managed care

·       Medicaid enrollment in managed care rose in three years from 35 to 55 million beneficiaries

·       $170 billion Medicaid managed care is half of total federal Medicaid expenditures

·       CMS is not doing enough to ensure accuracy in payments

 

Congress called for the Government Accountability Office (GAO) to conduct a study of the Payment Error Rate Measurement (PERM), which  measures the accuracy of capitated payments for managed care, including CMS’s and states’ oversight. Driving this inquiry was the rapid growth of Medicaid managed care enrollment, which increased by 56 percent in three years, jumping from covering 35 million beneficiaries to 54.6 million beneficiaries. Federal Medicaid managed care expenditures last year were $171 billion, almost half of the total for Medicaid. The GAO focused on weaknesses in oversight, given the recent rapid growth. The GAO reviewed program integrity risks reported in 27 federal and state audits and investigations over a five year period; federal regulations and guidance on the PERM; and the CMS’s Focused Program Integrity Reviews. The GAO also contacted program integrity officials in the 16 states with a majority of 2016 Medicaid spending for managed care. The GAO found:

  1. Ten of 27 federal and state audits and investigations identified about $68 million in overpayments and unallowable MCO costs, not accounted for by PERM estimates.
  2. Another investigation resulted in a $137.5 million settlement.
  3. CMS does not have a process to track managed care overpayments and cannot determine whether states considered those overpayments when they set capitation rates.
  4. CMS is not doing enough to ensure that states are adequately paying managed Medicaid companies and that the plans are making correct payments to providers.
  5. The managed care component of the PERM neither includes a medical review of services delivered to enrollees, nor reviews of MCO records or data.
  6. CMS and states have updated regulations, focused reviews, and used federal program integrity contractors’ audits of managed care services, however, some of this is only recent, and it may not fully address risks across all states.
  7. CMS does not ensure identification and reporting of overpayments to providers and unallowable costs by MCOs.

The GAO called for CMS to consider and take steps to mitigate the program risks that are not measured in the PERM, such as overpayments and unallowable costs. Such an effort could include actions such as revising the PERM methodology or focusing additional audit resources on managed care. The GAO also recommended CMS expedite the release of planned guidance and requirements for states to report to the CMS overpayments made between managed-care providers and plans.

 

 

 

 

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: DOJ Policy for continued antitrust enforcement DOJ

At the American Bar Association’s Anti-Trust in Healthcare Conference, Deputy Attorney General Barry Nigro provided a wide ranging presentation regarding DOJ efforts to combat rising health care fraud. He noted that, in 2016, health care spending in the United States accounted for $3.3 trillion, or $10,348 per person—approximately 18 percent of Gross Domestic Product (GDP). At this level of spending, the economy can ill afford fraudulent activity to increase the cost of health care. Inasmuch as health care involves critical care, it means the DOJ is giving it a higher priority. DOJ is continuing to give this area a priority that includes rigorous investigation and prosecution of those engaged in Medicare provider fraud and price gouging by drug makers. The DOJ will carry on with questioning mergers and potential collusion among health systems and payers. This includes market allocation agreements, price fixing, and naked market allocation. Some of the topical areas covered in his address included the following:

  1. Criminal prosecutions related to price fixing and market allocation agreements
  2. Parties circumventing generic drug regulations
  3. Market allocation and no-poach agreements
  4. Limitations on exemptions and immunities from anti-trust laws
  5. Continued reliance on the Clayton Antitrust Act
  6. Urging states to consider negative effect on competition when passing laws
  7. Support for certificate of need provisions
  8. Urging states to consider laws that impose occupational licensing requirements
  9. Professionals being able to advertise receiving board certification to patients

 

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: July/August 2018 Work Plan updates

The Office of Inspector General’s (OIG) work planning process is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available. Effective June, 2017, the OIG has been updating its Work Plan monthly. The following are the updates posted for July and August 2018:

  1. 3-Dimensional Conformal Radiation Therapy (3D-CRT). 3D-CRT is a radiation therapy technique that allows doctors to sculpt radiation beams to the shape of a patient’s tumor provided in two treatment phases: planning and delivery. Hospitals bill Medicare for developing a 3D-CRT treatment plan using Current Procedural Terminology code 77295. Automated prepayment edits prevent additional payments for separately billed radiation planning services if they are billed on the same date of service as the 3D-CRT treatment plan. However, Medicare allows additional payments if they are billed on a different date of service (e.g., 1 day before). For a form of radiation similar to 3D-CRT, Medicare requirements prohibit payments for separately billed radiation planning services when they are billed on a different date of service. OIG auditors will determine the extent of potential savings to Medicare if it had implemented the same requirements for 3D-CRT planning services.

 

  1. Identification of HHS Cybersecurity Vulnerabilities. The OIG will perform a series of IT audits at the HHS Operating Divisions in an effort to identify cybersecurity vulnerabilities and possible compromise of the HHS Office of the Secretary and its OPDIVs’ systems and networks.

 

  1. HRSA’s Oversight of Funds for Access Increases in Mental Health and Substance Abuse Services (AIMS). The Health Resources and Services Administration (HRSA) administers AIMS grants and last year HRSA awarded $200 million in AIMS grants to 1,178 health centers nation-wide intended to expand access for existing Health Center Program grant recipients to mental health and substance abuse services, focusing on the treatment, prevention, and awareness of opioid abuse. The OIG will review HRSA’s internal controls to determine whether they are suitable for (1) awarding AIMS grants and (2) monitoring AIMS grant recipients.

 

  1. Increased Payments For Transfer Claims With Outliers. While the transfer rule reduces the Diagnosis Related Group (DRG), Disproportionate Share Hospital (DSH), and Indirect Medical Education (IME) payments on a Medicare beneficiary’s claim, the methodology for calculating cost outlier payments can result in such payments being higher than what would have been paid in a nontransfer context. Under the transfer rule, CMS reduces the DRG payment by applying a graduated per diem payment on the Medicare claim of the hospital transferring the patient to another setting early in the patient’s hospital stay. Because DSH and IME payments are determined as a percentage of the reduced DRG payment, they are also reduced. By contrast, by reducing the threshold above which a claim qualifies as an outlier, the application of the outlier methodology at 42 CFR Sec. 412.80(b) can result in an increase in the outlier payment in transfer cases. The plans to produce a report describing the extent to which additional Medicare outlier payments negate the reduction in DRG, DSH, and IME payments of transfer claims.

 

  1. Review of Post-Operative Services Provided in the Global Surgery Period. Section 523 of Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) requires CMS to collect data on post-operative services included in global surgeries and requires OIG to audit and verify a sample of the data collected. The OIG will review a sample of global surgeries to determine the number of post-operative services documented in the medical records and compare it to the number of post-operative services reported in the data collected by CMS. The OIG plans to verify the accuracy of the number of post-operative visits reported to CMS by physicians and determine whether global surgery fees reflected the actual number of post-operative services that physicians provided to beneficiaries during the global surgery period

 

  1. SAMHSA’s Oversight of Accreditation Bodies for Opioid Treatment Programs. The Substance Abuse and Mental Health Services Administration (SAMHSA) estimates that 2.5 million people have an opioid use disorder related to prescription pain relievers and/or heroin. Medication-Assisted Treatment (MAT), provided by opioid treatment programs (OTPs), is a significant component of the treatment protocols for opioid use disorder and plays a large role in combating the opioid epidemic in the United States. SAMHSA issued final regulations to establish an oversight system for the treatment of substance use disorders with MAT. These regulations (42 CFR Part 8) established procedures for an entity to become an approved accreditation body, which evaluates OTPs and ensures SAMHSA’s opioid dependency treatment standards are met. The OIG plans to determine whether SAMHSA’s oversight of accreditation bodies complied with Federal requirements; and will include SAMHSA-approved accrediting bodies that have accredited OTPs

 

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: 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.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

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