Highlight on Maine: Able-bodied MaineCare recipients could be subject to more stringent requirements

“Able-bodied adults” would be subject to work/education requirements and a lifetime limit of five years under changes Mary Mayhew, director of the Maine Department of Health and Human Services, proposed to Maine’s Medicaid program, MaineCare. In a letter to HHS Secretary Tom Price, Mayhew said she would be seeking the changes in a forthcoming formal 1115 demonstration waiver request.

Mayhew’s letter comes at the heels of a referendum campaign to expand Medicaid in Maine at, according to Mayhew, a cost of $400 million over the next five years. A second motivation is the apparently sympathetic Trump Administration, which has proposed replacing Medicaid with block grants.

Mayhew said that the state has expanded its Medicaid program over decades, resulting in the use of hundreds of millions of state dollars “to turn Medicaid into an entitlement program for working-age, able-bodied adults.” MaineCare serves 270,000 individuals, just over 20 percent of Maine’s population, which, Mayhew said, represents a 22 percent reduction in enrollment since 2011.

Mayhew’s Medicaid proposals include the following:

  • work or education requirements for able-bodied adults in the Medicaid program, similar to the work requirements for Temporary Assistance for Needy Families (TANF) or Able-Bodied Adults Without Dependents (ABAWDs) in the Supplemental Nutrition Assistance Program (SNAP);
  • a five-year lifetime limitation on able-bodied adults’ eligibility for Medicaid;
  • limiting non-emergency transportation (NET) to situations where the underlying service to or from which individuals are being transported is a required Medicaid service and requiring them to access existing transportation resources before accessing NET;
  • requiring monthly premiums for adults who are able to earn income;
  • requiring monthly coinsurance of a set amount (approximately $20) for all members, cost-sharing of $20 for using the emergency department, and fees for missed appointments;
  • applying a reasonable asset test to Medicaid; and
  • waiver of the retroactive coverage of services incurred during the 90 days before Medicaid eligibility.

 

Kusserow on Compliance: Civil monetary penalty rules revised regarding inducements

In December 2016, the HHS Office of Inspector General (OIG) issued a Final rule applying to the Civil Monetary Penalty Law (CMPL) administered by the OIG. The legislation creating the law came about in 1981, upon my request as HHS Inspector General. In testimony before Congress, I requested legislation to provide an administrative alternative to the False Claims Act.  This was to permit taking action against wrongdoers administratively, rather than through the court system. The resulting legislation authorized the imposition of administrative penalties and assessments on any person who “offers to or transfers remuneration to any individual eligible for benefits” under a federal health care program “that such person knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may be made, in whole or in part” by a federal health care program–in short, it imposes financial penalties and exclusion from federal health care programs and participation in any state health care programs. The HHS Secretary assigned these authorities to the OIG. Remuneration is a major element in the CMPL and is implicated in other legislation, including the Anti-Kickback Statute and Stark Laws. It has undergone changes in definition over time.  The following outlines the five new exceptions to its definition under CMPL.

Five new exceptions to the definition of remuneration

  1. Reduction in copayment for certain outpatient services. The rule adds a cost-sharing exception permitting reduction in the copayment amount for covered outpatient department services, but does not apply to physician practice billing.
  2. Remuneration that poses a low risk of harm and promotes access to care. A provider can avoid the CMPL when it provides items or services that improve a beneficiary’s ability to obtain items and services payable by Medicare or Medicaid, and pose a low risk of harm to beneficiaries and the programs. This does mean it permits remuneration that would be likely to influence a patient to access unnecessary care. The inclusion of “items and services” revises the earlier proposed language, “medically necessary health care items and services.”  Cash and cash equivalents would not meet the criteria for the exception.
  3. Retailer rewards and discounts. Retailers may offer or transfer items or services for free or less than fair market value without being subject to civil monetary penalties. However, they must consist of coupons, rebates, or other rewards from a retailer; be offered or transferred on equal terms available to the general public, regardless of health insurance status; and must not be tied to the provision of other items or services reimbursed in whole or in part by a federal health care program.
  4. Remuneration to financially needy individuals. The regulations also provide for a financial need-based exception to the definition of remuneration, wherein a person may offer or transfer items or services for free or less than fair market value if: the items or services are not offered as part of an advertisement or solicitation and are not tied to the provision of other items or services reimbursed in whole or in part by a Federal health care program; there is a reasonable connection between the items or services and the medical care of the individual; and the person providing the items or services must determine in good faith that the individual is in financial need.
  5. Copayment waivers for the first fill of generic drugs. A Medicare Part D Plan sponsor may waive any copayment for the first fill of a covered Part D drug that is a generic drug, as long as the waiver is included in the benefit design package submitted to CMS.

These regulatory changes are effective January 6, 2017. A separate section of the same rule package focused on revision of the Anti-Kickback provisions.  For information about those changes, see my December 29, 2016, post.

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 © 2016 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG 2017 work plan highlights

As compliance officers prepare their work plans for 2017, it is worth remembering those matters of current interest to the HHS Office of Inspector General (OIG) that are reflected in its 2017 Work Plan. The OIG’s plan outlines new and ongoing reviews of HHS programs and operations and timeframes for completion.  The OIG reviews various providers, including hospitals, nursing homes, and home health services.  Items in the Work Plan of particular significance include the following:

  • incorrect medical assistance days claimed by hospitals (addressing risk of overpayment under the Medicare disproportionate share hospital payments);
  • case review of inpatient rehabilitation hospital patients, not suited for intensive therapy;
  • inpatient psychiatric facility outlier payments;
  • Medicare costs associated with defective medical devices;
  • unreported incidents of abuse and neglect in skilled nursing facilities;
  • skilled nursing facility reimbursement;
  • review of hospice compliance with Medicare requirements;
  • Medicare payments for transitional and chronic care management;
  • Medicare Payments for Service Dates After Individuals’ Date of Death;
  • Centers for Medicare & Medicaid Services (CMS)’ implementation of the Quality Payment Program;
  • Medicare Part D rebates for drugs dispensed by 340B pharmacies;
  • Medicaid overpayment reporting and collections; and
  • CMS oversight and issuer compliance in ensuring data integrity for the Affordable Care Act (ACA) Risk Adjustment Program.

Tom Herrmann, J.D., a retired OIG executive who was intimately involved in past OIG Work Plan development, advises compliance officers to closely review the entire OIG Work Plan, as it telegraphs issues that have come to the OIG’s attention as potential problem areas warranting close examination. The results of such reviews often lead to proposed legal and regulatory changes.  They also may trigger additional audits, evaluations, and investigations. Examining the Work Plan items that may relate to their organizations in detail is an opportunity for compliance officers to get ahead of the power curve, rather than behind it.  The fact is that one of the purposes of publishing the OIG Work Plan is to encourage health care entities to engage in such self-examination and program improvement.

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 © 2016 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Medicare parts A and B among OIG’s top management challenges

Annually, the HHS Office of Inspector General (OIG) prepares a summary of the most significant management and performance challenges facing HHS and its progress toward addressing them. Among them are issues relating to Medicare Parts A and B.  The programs are expected to continue increasing significantly due to the growth in the number of beneficiaries and the increase in per capita health care costs. The Annual Report by Medicare’s Board of Trustees estimates that the Trust Fund for Part A will be depleted by 2028, and that the Part B spending growth of almost 7 percent over the next five years will be higher than growth rate for the U.S. economy. Part B is undergoing substantial changes through the Medicare Access and CHIP Reauthorization Act of 2015 and other reforms. The following were the key challenges identified in these programs.

Reducing improper payments. In FY 2015, CMS reported an improper payment rate of 12.1 percent, corresponding to $43.3 billion, for Medicare fee-for-service (Parts A and B). These measures include payments that were paid at an incorrect amount (including both overpayments and underpayments), as well as payments for unnecessary services, services not rendered, billing or coding errors, and claims that did not meet documentation or other Medicare coverage requirements. The OIG found vulnerabilities in hospital billings and returning improper payments to the Medicare Trust Fund. Special focus is needed on improper payments in home health and hospice care vulnerabilities.  Many improper payments have been identified across a number of risk areas, such as insufficient documentation, medical necessity, and homebound determinations.  One-third of stays for hospice general inpatient care have been found as not meeting Medicare requirements, costing $268 million.   There have been findings, as well, of improper payments (some exceeding 50 percent) to Part B providers, such as chiropractors, physical therapists, and certain durable medical equipment (DME) suppliers.

Preventing, detecting, and responding to fraud. The OIG has found that program areas susceptible to widespread fraud include home health and hospice services and DME, including billing for unnecessary services or services not provided; kickbacks to recruiters and patients; aggressive and illegal DME telemarketing; and social targeting of Medicare beneficiaries that put them at risk of medical identity theft.  CMS lacks accurate information about the individuals and entities with which it does business and must take appropriate steps to avoid doing business with, and exposing beneficiaries to, those who are untrustworthy.  There is a need to fully and effectively deploy all available program integrity tools, including those provided under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), such as enhanced screening of provider enrollments.  Weaknesses have been found in contractors’ administration of provider enrollments that could leave Medicare vulnerable to billing by ineligible providers and beneficiaries. Weaknesses included gaps in the verification of key information, inconsistencies in site visit procedures, and failures to use site visit results for enrollment decisions. CMS’s Provider Enrollment, Chain and Ownership System (PECOS) is incomplete and, in some cases, inaccurate. It was intended to aid in tracking enrollment and revalidation trends and to help determine whether contractors are meeting requirements.

Fostering prudent payment policies.  Medicare pays significantly different amounts for the same services provided to similar patients in different settings.   The OIG estimated swing-bed services provided up to 90 percent of the critical access hospital (CAH) services that they reviewed, which could have been provided at other nearby facilities that are paid under the Skilled Nursing Facility (SNF) Prospective Payment System.  Medicare could have saved $4.1 billion over 6 years if payments for swing-bed services at CAHs were made to other facilities at SNF rates. Medicare and beneficiaries also typically pay more for a physician service provided in a “provider-based facility” (i.e., one owned by a hospital) than for the same service provided in an independent facility.  CMS is implementing a significant overhaul of the payment system for clinical laboratory tests pursuant to the Protecting Access to Medicare Act of 2014 and the new system seeks to better align Medicare reimbursement for lab tests with market rates (taking effect on January 1, 2018).  Concerns continue about risks to payment accuracy on the basis of CMS’s plans to rely on labs to self-identify whether they meet the criteria for reporting private payer data and they plan to rely on reporting labs’ self-attestations of the data’s completeness and accuracy.  Some payment systems create financial incentives that may negatively affect patient care and drive up Medicare costs, such as payment policies for SNFs that give facilities incentives to bill for higher levels of therapy than beneficiaries need.  Some SNFs have been billing for the highest level of therapy at increasing rates that were not supported by patient needs.  Many hospices have been found providing care much longer and received much higher Medicare payments for beneficiaries in inpatient assisted-living facilities than for beneficiaries in other settings, creating incentives for hospices to target these patients, doubling hospice care cost in the last 5 years.

Progress reported by CMS/HHS in addressing the challenges

  • Substantial strides in fighting fraud, waste, and abuse in Medicare and Medicaid have been made through the Health Care Fraud and Abuse Control Program, recovering stolen and misspent funds at a return of $6.10 for every $1 invested.
  • Many OIG recommendations are being implement to implement additional program integrity tools.
  • Prior authorization models and demonstrations are being implemented in certain areas to help ensure items and services are provided in compliance with Medicare coverage, coding, and payment rules.
  • Prior authorization processes are being implemented in certain locations for power mobility devices, repetitive scheduled non-emergent ambulance transport, and certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).
  • A demonstration project has begun in five states, requiring home health agencies to submit required documentation for pre-claim review to help reduce and prevent improper payments.
  • There have been reductions in Medicare billing and payments for certain services and geographic areas known for fraud risks.
  • Steps have been taken to improve provider enrollment safeguards and protection for the Medicare program.
  • Expansion of temporary provider enrollment moratoria for home health agencies has been extended in certain geographic locations known for significant fraud.
  • New regulations have been proposed that would use provider and supplier information more effectively to keep out or remove providers who pose risks to Medicare and its beneficiaries.
  •  Enhanced address verification software in PECOS has been reported to better detect vacant or invalid addresses or commercial mailing reporting agencies.
  • Improvements have been reported in oversight and measurement of contractors’ performance and agency corrective actions regarding improper payment vulnerabilities that contractors identify.
  • For laboratory services, reports have been made of significant progress in several key areas, including promulgating regulations, establishing the Advisory Panel, publishing most of the sub-regulatory guidance, and building the data collection system.
  • New legislation is being proposed that would restrict the higher payment rates for provider-based facilities to “on-campus” facilities and to “off-campus” facilities that were designated as such before November 2, 2015.

What OIG states still needs to be done

  • Continued improvement of oversight of the performance of contractors in implementing Medicare provider enrollment safeguards is needed to ensure payment accuracy and identify and recover overpayments in a timely manner.
  • Need to improve the completeness, accuracy, and timeliness of its provider ownership data (maintained in PECOS) to support effective oversight.
  • HHS should continue to address and resolve program integrity weaknesses identified.
  • Numerous actions remain to be acted upon and implemented to reduce improper payments for specific services.
  • Need to increase oversight of hospice general inpatient claims, ensure that a physician is involved in the decision to use proper level of care, and conduct prepayment reviews for lengthy stays.
  • Safeguards need strengthening to ensure that Medicare pays for home health services only when the beneficiary meets the applicable homebound requirement and the home health agency has provided reasonable and necessary skilled services that are supported by and documented in the physician’s certification plan.
  • Changes are needed (some requiring legislation) to promote more prudent payment policies, including payments to hospital outpatient departments and ambulatory surgical centers, SNFs, and hospices.
  • Need to act upon a number of pending recommendations within existing authorities to mitigate the financial and quality of care risks under the current systems, such as CMS analyzing billing data to identify SNFs that appear to be overbilling for therapy and expand its oversight reviews of those SNFs.
  • For laboratory tests, maintain focus on key remaining tasks, including completing the data collection system, ensuring completeness and accuracy of reported data, and establishing new Medicare payment rates after labs report data in 2017.
  • Monitor labs’ reporting to ensure report data are accurate and complete.

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 © 2016 Strategic Management Services, LLC. Published with permission.