Kusserow on Compliance: Medicare overpaid hospitals $267M for post-acute care transfers to home health

An HHS Office of Inspector General (OIG) audit identified 89,213 inpatient claims totaling $948 million at risk of overpayment because of hospital transfer policies to home health agencies for post-acute care. The OIG selected a stratified sample of 150 claims which was reviewed by an independent medical review contractor to assess the relatedness of the home health services to the hospital admission. The review found that Medicare improperly paid most inpatient claims subject to the transfer policy when beneficiaries resumed home health services within 3 days of discharge. Hospitals failed to code the inpatient claim as a discharge to home health services when the hospitals applied condition codes 42 (home health not related to inpatient stay) or 43 (home health not within 3 days of discharge). Of the 150 inpatient claims in the sample, Medicare properly paid for just three claims. As a result, CMS improperly paid for 147 claims, for a total of $722,288 in overpayments. Medicare should have paid these inpatient claims using a graduated per diem rate rather than the full payment. The OIG estimated that Medicare improperly paid $267 million during a 2-year period for hospital services that should have been paid a graduated per diem payment.

Prior OIG audits identified Medicare overpayments to hospitals that did not comply with Medicare’s post-acute-care transfer policy and in response CMS instituted new corrective actions into the system. The OIG later found the policies were still not properly designed. The result is that hospitals may be using condition codes to bypass CMS’s system edits to receive higher reimbursements for inpatients transferred to home health services. Compliance officers should consider this—the transfer of patients from hospital in-patient care to post-acute care at home health agencies—as a risk area warranting an internal review.

 

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 © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Written policies are necessary to govern compliance communication channels

An organization with an effective compliance program is one whose employees can easily share and receive information about what is expected of them in the workplace and one who provides a means to report compliance issues and violations of standards of behavior. The OIG and DOJ stress the importance of having multiple channels of compliance communication, not limited to hotlines. Without question, the “hotline” is the major avenue of communication for receiving reports of employee concerns, observed unallowable behavior, violations of law/regulations, breach of safety standards, theft, and other wrongdoing. This channel has been further stimulated by the inclusion of web-based reporting in recent years. Other channels by which employees can voice concerns and perceptions can include feedback from training, independent confidential surveying, bulletin boards, suggestion boxes, emailing, exit interviewing, staff meetings, etc. Included with these other channels should be the easy and direct access to managers, as well as the compliance office.

Communication is a two-way street that needs to include feedback and dissemination of information to employees. It is important to share news, announcements, discussions, surveys and anything else with employees. This information needs to come from an accessible place. Many health care organizations use their Intranet as a major communication vehicle. Once the compliance communication channels have been created, it calls for “rules of the road” governing the processes in the form of policies and procedures.

The fact is that there are several related policy documents called for by regulatory authorities as essential to an effective compliance program. These include, but are not limited to, “Duty to Report Policy,” “Non-Retaliation Policy,” “Anonymous Reporting Policy,” “Confidential Reporting Policy,” “Hotline Operations Policy,” “Compliance Investigation Policy,” “Disclosure of Overpayments Policy,” “Disclosure of Violations of Law/Regulations,” and “Compliance Office Confidentiality Policy,” among others. There is also need for policies for proper handling and management of information to guard against leaks, which opens the door to a whole set of policies related to IT and information controls. These policies should be inter-related and mutually supporting. They tell employees of their obligations to report suspected wrongdoing, how to do it, how the information will be acted upon, and what to expect once the report is submitted.

For more information regarding this subject and availability of compliance policy templates, see the Policy Resource Center at www.complianceresource.com.

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 LinkedIn.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: DOJ and HHS OIG issue annual Health Care Fraud and Abuse Control Program Report

The HHS OIG and DOJ issued their annual Health Care Fraud and Abuse Control Program Report. The report outlines efforts undertaken annually as a result of HIPAA, which established the program to “coordinate federal, state, and local law enforcement activities with respect to health care fraud and abuse.” For FY 2019 the reported recoveries were $3.6 billion, of which about $2.5 billion was returned to the Medicare trust fund. The recoveries included judgments and settlements from fraud causes brought in 2019 and in prior years. In addition, the DOJ reported opening 1,060 new criminal health care fraud investigations, which led to charges against 814 defendants. The DOJ Civil Division opened 1,112 new civil health care fraud investigations. Medicare and Medicaid fraud investigations by HHS’s Office of Inspector General resulted in 747 criminal actions and 684 civil actions against individuals and entities. In 2019, HHS also excluded 2,640 individuals from participation in the Medicare and Medicaid programs. The breakdown of exclusions included 1,194 based on criminal convictions related to Medicare and Medicaid, 335 for other health care programs, 238 for patient abuse or neglect, and 576 as a result of state health care licensure revocations.

The report also provided information on the return on investment (ROI) for the HCFAC program over the last three years (2017 – 2019) at $4.2 returned for every $1.00 expended. Results were reported as being in large measure due to the Health Care Fraud Prevention and Enforcement Action Team (HEAT) that was designed to coordinate enforcement efforts related health care fraud. These teams are comprised of top-level law enforcement agents, prosecutors, attorneys, auditors, evaluators, and other staff from DOJ and HHS and their operating divisions, and are dedicated to joint efforts across government to both prevent fraud and enforce current anti-fraud laws around the country. The Strike Force teams are a key component of HEAT.

 

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 LinkedIn.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: DOJ issues 2020 compliance program guidelines

Provides a more in-depth analysis of compliance programs

The DOJ released the updated Evaluation of Corporate Compliance Programs to assist prosecutors in making an informed analysis about an organization’s compliance program at the time of charging decisions. It has not changed much from the prior releases that included a list of 119 compliance-related questions. The new guidance continues to focus on three core questions derived from the Justice Manual, namely,  whether a compliance program is “well designed,” “being applied earnestly and in good faith,” and “works in practice.” It restates the importance of having a compliance program suitable for the company’s risk profile but added context and detail for companies to ensure that their compliance priorities are aligned with the DOJ’s expectations.

These include: (1) the importance of having an evolving, dynamic program; (2) the need for the compliance function to engage with company employees; (3) ensuring the program is thoughtful and responsive to the company’s context; and (4) the importance of adequate compliance resources and empowerment of the compliance function. Additional attention is given to these principles for companies to enhance their compliance program and adhere to best practices that would best position themselves in the event of an inquiry or enforcement action from a government regulator. It reflects the continued expectation that a compliance program should continue to evolve and improve over time as the business changes and the compliance function matures. Meaningful risk assessments and program evaluations are critical to this end. There is added language asking prosecutors to assess “why and how the company’s compliance program has evolved over time” and “has the periodic review led to updates in policies, procedures, and controls?”

The DOJ has continued to move away from the antiquated model of a generic, “off-the-shelf” compliance program and focus more on how an organization acts in response to risk assessments. Other questions include whether the company has a process for tracking and incorporating into its periodic risk assessment lessons learned either from the company’s own prior identified issues or from those of other companies operating in the same industry and/or geographical region. The DOJ asks about effective monitoring of compliance and whether a company’s compliance program has continuous access to operational data and information across functions. The DOJ underscores, once again, the importance of having regular reviews of the compliance program; and make it clear that this should not be “cookie cutter” “check the box” type reviews. These reviews should lead to useful findings that result in meaningful changes and improvements. Greater emphasis is also given to the adequacy of compliance resources, quality of trained staff, and empowerment for the program. The importance of oversight of any third-party agents that act on a company’s behalf is stressed, including whether the company engages in risk management of third parties throughout the lifespan of the relationship. The questions include whether the company completed pre-ad post-acquisition due diligence; and a process for timely and orderly integration of the acquired entity into existing compliance program structures and internal controls.

The guidance asks whether the company tracks access to various policies and procedures to understand what policies are attracting more attention from relevant employees; and if the policies have been published in a searchable format for easy access and reference. Employee training received new attention, suggesting companies consider the format of their trainings to be more responsive, including by: (1) investing in shorter, more targeted training sessions, and (2) ensuring a process by which employees can ask questions arising out of the training. In addition, there is the question as to the extent to which the training has an impact on employee behavior or operations. With regards to the hotlines, the guidance had added language to ensure that the hotline is an accessible, responsive tool, whether the company test whether employees are aware of the hotline and feel comfortable using it, and if reports are tracked from inception to finish.

 

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 LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2020 Strategic Management Services, LLC. Published with permission.