Kusserow on Compliance: Breaking News: HHS OIG posts its mid-year Work Plan update

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The Office of Inspector General (OIG) has posted a mid-year update on its Fiscal Year 2015 Work Plan, effective May 2015. It is worth reviewing, as it describes audits, evaluations, and certain legal and investigative initiatives that are ongoing, as well as those deleted, completed, postponed, or canceled. The OIG has added 20 new items that have been started since October 2014. For each project in the revised Work Plan, the agency included the subject, primary objective, criteria related to the topic, identification code for the review, and when it expects reports to be issued for the review. The update also forecasted areas for which it anticipates planning and/or beginning work in the upcoming fiscal year and beyond. These broader areas of focus are based on the results of OIG’s past work and have been identified as significant management and performance challenges facing HHS.

The OIG intends to continue reviews of the appropriateness of Medicare and Medicaid payments with possible additional work on the efficiency and effectiveness of payment policies and practices in inpatient and outpatient settings, for prescription drugs, and in managed care. Other areas it has under consideration include: (1) the integrity of the food, drug, and medical device supply chains; (2) security of electronic data; (3) use and exchange of health information technology; and (4) emergency preparedness and response efforts. It also plans to continue to focus on emerging payment, eligibility, management, and information technology systems security vulnerabilities in health care reform programs, such as the Health Insurance Marketplaces, as well as care quality and access in Medicare and Medicaid.

Among the new reviews schedule for Medicare and Medicaid program are the following:

  • Medicare outpatient payments for intensity-modulated radiation therapy (IMRT);
  • Hospital preparedness and response to high-risk infectious diseases;
  • Competitive bidding on beneficiary access to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS);
  • Payments for the top 25 clinical diagnostic laboratory tests charged to Medicare;
  • Inpatient rehabilitation facility prospective payment system (IRF PPS) compliance, including required documentation to support claims paid by Medicare;
  • Accountable care organization (ACO) Medicare Shared Savings Program (MSSP) use of electronic health records (EHRs) to achieve their care coordination goals;
  • Medicare Part D billing trends, including changes in billing for commonly used opioid drugs;
  • States’ reporting of their federal share of Medicaid rebate collections;
  • Determinations of whether generic drug prices increased more than inflation for urban consumers;
  • Drug manufacturers’ treatment of sales of generics in their calculation of average manufacturer price (AMP) for the Medicaid drug rebate program; and
  • State submissions of Transformed Medicaid Statistical Information System (T-MSIS) data.

The OIG makes it clear that the Work Plan is constantly being updated and changed according to needs and circumstances and as such it does not provide status reports on the progress of the reviews, however it does periodically update the Work Plan.

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 © 2015 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG reports on FDA generic drugs oversight and inspection

Congress requested the Office of Inspector General (OIG) conduct an evaluation of whether the FDA is achieving parity in inspections of foreign and domestic manufacturers. The expressed concern is related to the safety and quality of generic drugs produced by foreign manufacturers. Currently nearly 80 percent of all drug prescriptions filled in the United States were for generic drugs. Recalls of generic drugs in recent years have raised concerns about the adequacy of the FDA’s oversight of manufacturers, particularly those outside the United States. In their review, the OIG analyzed FDA data and conducted interviews of the staff to determine:

  • the number and types of inspections for manufacturers of generic drugs;
  • whether manufacturers listed on approved applications had registered with FDA as required; and
  • the extent to which it is progressing toward achieving parity in domestic and foreign inspections and more efficient processes for inspections.

 Findings

  • FDA has increased its preapproval inspections of manufacturers of generic drugs by 60 percent between 2011 and 2013.
  • FDA conducted surveillance inspections of all generic manufacturers that it had identified as high risk.
  • FDA also reported progress towards achieving parity in inspections of foreign and domestic manufacturers of generic drugs and ensuring compliance with generic manufacturer registration.
  • FDA did not conduct all of the preapproval inspections requested by its own generic drug application reviewers during this time period.
  • FDA has created some policies and procedures to request manufacturer records in lieu or in advance of an inspection, but has not yet used these procedures to request records

Recommendations

The FDA should:

  • conduct outstanding preapproval inspections of manufacturers of generic drugs, which could lead to more timely approval of these drugs;
  • ensure compliance with the requirements of manufacturers of generic drugs to register with FDA as a complete and up-to-date registration database that would facilitate the implementation of their plans for conducting inspections; and
  • use its authority to request records in lieu or in advance of inspections which could increase their capacity for inspections and review of records in advance, which could, in turn, free up staff time during onsite portion of inspections.

The FDA concurred with all the OIG recommendations.

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 © 2015 Strategic Management Services, LLC. Published with permission.

 

 

Kusserow on Compliance: OIG recommendations for Medicare fraud prevention

Gary Cantrell, Deputy Inspector General for Investigations for the HHS Office of the Inspector General (OIG), provided testimony before the House Ways and Means Subcommittee on Oversight on the OIG’s efforts to combat fraud in the Medicare program as reported in the “2015 Report on Unimplemented OIG Recommendations.” He presented several high priority OIG recommendations to prevent fraud from occurring by making improvements that address vulnerabilities and better safeguard the Medicare program and its beneficiaries. All of these recommendations were included in the recently released OIG’s “Compendium of Unimplemented Recommendations,” issued earlier this month. The highlighted recommendations included the following:

  • To address prescription drug abuse, CMS should move to restrict certain Part D beneficiaries to a limited number of pharmacies or prescribers. This practice, known as “lock-in,” is currently used by some state Medicaid programs and could help reduce inappropriate drug utilization by Part D.
  • To improve Medicare Part C and D fraud reporting, CMS should require Medicare Part C (Medicare Advantage or MA) and Part D plan sponsors to report fraud and abuse. Oversight of Part C and Part D is hampered by a lack of accurate, timely, and complete data on fraud and abuse incidents.
  • To help curb inappropriate home health care, CMS should enhance its oversight mechanisms to improve compliance with the home health “face-to-face” requirement. Home health agencies (HHAs) are required to obtain documentation from the provider, who must certify that a Medicare beneficiary who needs home health care had a face-to-face encounter with the provider. This safeguard is intended to reduce inappropriate payments for home health care, but OIG found high rates of noncompliance in this area.
  • If CMS would remove Social Security numbers from Medicare cards, it would help guard the personal health information of Medicare beneficiaries from fraudulent use of the numbers. Experts in the health care program integrity field advise that medical identity theft is a prevalent and increasing crime that is closely linked to Medicare fraud and additional safeguards are needed to protect the identities of beneficiaries.

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 © 2015 Strategic Management Services, LLC. Published with permission.

 

Kusserow on Compliance: Advice on selecting an Independent Review Organization (IRO)

The HHS Office of Inspector General (OIG) has over 300 active Corporate Integrity Agreements (CIAs) in force. They result from a settlement of a civil false claims case with the Department of Justice (DOJ). Under a CIA, a provider or entity consents to certain defined obligations as part of “the civil settlement and in exchange for the OIG’s agreement not to seek an exclusion of that health care provider or entity from participation in Medicare, Medicaid, and other federal health care programs.” The CIAs normally are five years in duration and include requirements for an Independent Review Organization (IRO) to ensure compliance with its terms and requirements that include addressing the specific issues that gave rise to the settlement (physician arrangements, off-label use of drugs, inappropriate billing, or marketing practices, etc.).

Financial audits are not normally part of the agreement; as such, IROs usually are firms with expert health care consultants, rather than financial auditors. IRO selection is a critical decision process that should not be taken lightly. The wrong IRO can also prove to be a very costly both in terms of what they charge and how they perform their services, but also in the credibility and quality of their work. It is the responsibility of the entity, not the OIG, to select the IRO. The OIG does not provide advice on how to select one or endorse any organizations to be the IRO, however it reserves the right to approve or deny the entities or provider’s choice of IRO, if found deficient in meeting its guidelines. This is done within 30 days after it receives written notice of the identity of the IRO. Any problems the OIG finds with an IRO will reflect badly on the organization and could aggravate matters.

Thomas Herrmann, J.D., is an expert without peer with regards to IROs, as result of having been previously responsible on behalf of the OIG for negotiating CIAs and monitoring compliance; and subsequently, as years of experience as a consultant involved in more than a dozen IRO engagements. He offered the following advice in selecting the right IRO to oversee an organization’s compliance with the terms and conditions of a CIA:

  • Select a firm that is highly experienced as having served as an IRO to ensure effective reporting and communication with both the entity and the OIG. Expecting a firm to have so served as an IRO six or more times is not unreasonable.
  • Find a firm with many years of health care experience, the more the better, in the particular healthcare sector (there is a huge difference between a provider, managed care organization, and a pharmaceutical manufacturing company). This should not be a learning opportunity at the entity’s expense.
  • Ensure the prospective IRO has the specific qualifications and expertise to properly address the specific scope of work under the CIA. These vary considerably and the more complex a case, the more important that the IRO be highly experienced in that area. Absence of program expertise can lead to hidden costs in learning the business and may result in difficulties meeting the obligations and possibly in terms of credibility in the eyes of the OIG.
  • Require references where the prospective IRO served in that capacity in the past to find out what kind of job they have done, professionally, competently, reasonably, and without up charging unreasonably over their estimate.
  • Avoid a “bait and switch” wherein the people negotiating to become the IRO are quickly switched to lesser qualified individuals to perform the work. Insist on the prospective IRO to specifically identify the key persons assigned to the engagement, along with their personal qualifications.
  • Require written attestation that they have no conflicts of interest problem. The OIG has enumerated many examples of conflict of interest, but, in short, this means that the IRO cannot be involved in reviewing any work in which they had a role in developing and must not have their work conflict with any previous work they have done with the entity. Even the appearance of conflict can be a serious problem.
  • Require the IRO to agree in writing that they will meet the OIG required General Accountability Office (GAO) “Generally Accepted Government Audit Standards” for operational reviews. Operational reviews and financial reviews are dealt with separately in those standards.
  • Fee rates and charges can range considerably and it is important to consider that cost right alongside of experience, professionalism, and industry knowledge.

For more information on this topic, please consider registering for the upcoming WK webinar, “CIA Lessons Learned—Negotiating Terms, Selecting an IRO, Meeting Obligations”, featuring Richard Kusserow.

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 © 2015 Strategic Management Services, LLC. Published with permission.