Kusserow on Compliance: Inappropriate denial of services and payments in the Medicare Advantage program

In an update to its Workplan, the HHS office of Inspector General (OIG) added a new project in June. The OIG Office of Evaluation and Inspection will be reviewing and evaluating the question of inappropriate denial of service and payment in the Medicare Advantage program. Medicare Advantage Plans must cover all of the services that original Medicare covers. Capitated payment models are used for these plans. It is based on payment per person rather than payment per service provided. A central concern about the capitated payment model used in Medicare Advantage is that there may be an incentive to inappropriately deny access to, or reimbursement for, health care services in an attempt to increase profits for managed care plans. There have been questions raised as to whether some of the plans may be inappropriately denying service claims as a means to increase their profits.  The OIG plans to conduct medical record reviews to determine the extent to which beneficiaries and providers were denied preauthorization or payment for medically necessary services covered by Medicare. To the extent possible, we will determine the reasons for any inappropriate denials and the types of services involved.

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: OIG report on vulnerabilities in the Medicare hospice program

15 specific actions recommended to reduce Hospice vulnerability

4 million Hospice beneficiaries with an annual cost of $17 billion

CMS plans to increase hospices reimbursement by $340 million

 

The HHS Office of Inspector General (OIG) reported on numerous evaluations, audits, and investigations of the hospice program that have resulted in questioned costs, as well as criminal and civil prosecutions. The result of this work has identified vulnerabilities in the program. By way of background, the objective of hospice is to provide great comfort and care to beneficiaries, their families, and caregivers at the end of a beneficiary’s life. This program has grown steadily over the past decade, with Medicare now paying about $17 billion annually on behalf of 1.5 million beneficiaries—grown from a half million in 2000. According to CMS, hospice expenditures are anticipated to continue rising 8 percent annually as more beneficiaries utilize the care. In their review of this program, the OIG found:

  1. Hospice providers do not always provide needed services to beneficiaries; sometimes provide poor quality care; and were not able to effectively manage symptoms or medications, leaving beneficiaries in unnecessary pain for many days.
  2. Beneficiaries and their families and caregivers do not receive crucial information to make informed decisions about their care.
  3. Hospices’ inappropriate billing costs Medicare hundreds of millions of dollars that included billing for an expensive level of care when the beneficiary does not need it.
  4. A number of fraud schemes in hospice care negatively affect beneficiaries and the program with some involving enrolling beneficiaries who are not eligible for hospice care, while other schemes involve billing for services never provided.
  5. The current payment system creates incentives for hospices to minimize their services and seek beneficiaries who have uncomplicated needs with a hospice being paid for every day a beneficiary is in its care, regardless of the quantity or quality of services provided on that day.

The OIG recommended that CMS implement 15 specific actions that relate to seven areas for improvement. The OIG called upon CMS to:

  1. Strengthen the survey process-its primary tool to promote compliance-to better ensure that hospices provide beneficiaries with needed services and quality care.
  2. Seek statutory authority to establish additional remedies for hospices with poor performance.
  3. Develop and disseminate additional information on hospices, including complaint investigations, to help beneficiaries and their families and caregivers make informed choices about hospice care.
  4. Educate beneficiaries and their families and caregivers about the hospice benefit, working with its partners to make available consumer-friendly information.
  5. Promote physician involvement and accountability to ensure that beneficiaries get appropriate care.
  6. Strengthen oversight of hospices, including analyzing claims data to identify hospices that engage in practices that raise concerns.
  7. Take steps to tie payment to beneficiary care needs and quality of care to ensure that services rendered adequately serve beneficiaries’ needs, seeking statutory authority if necessary.

Meanwhile CMS announced in proposed rulemaking plans to increase payments for hospices by 1.8 percent, or $340 million, up from $180 million increase last year. CMS also included under the new Proposed rule:

  • New standards to help determine what measures hospices will no longer have to report under its meaningful measures initiative.
  • Changes to the Hospice Compare policies site to correct massive amounts of incorrect addresses, phone numbers and profit status for providers.
  • Beginning January 1, 2019, Hospices will have 4½ months after the end of each quarter to review and correct data that will be reported publicly on the website.
  • Physician assistants will be recognized as attending physicians for Medicare hospice.
  • Aggregate cap limiting overall annual hospice payment will increase by 1.8 percent to $29,205.44.

 

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: OIG provides Medicaid fraud and overpayment update to Congress

The OIG testified before the Senate Committee on Homeland Security and Governmental Affairs regarding Medicaid Fraud and Overpayments. Up front, it was noted that the Medicaid program has 67 million beneficiaries, costing $600 billion annually with projected improper Medicaid payments at about $59 billion. Key points of the testimony were:

  1. Complete and reliable national Medicaid data—which is necessary for effective program oversight and to quickly detect and address improper payments, fraud, waste, or quality concerns—is limited.
  2. Transformed Medicaid Statistical Information System (T-MSIS) data was mandated to address problems with national Medicaid claims and eligibility data. All states except Wisconsin and the District of Columbia have begun reporting data to T‐MSIS, but the data elements may not mean the same thing across states. CMS must ensure that the same data elements are consistently reported and uniformly interpreted across states.
  3. Eighty percent of all Medicaid beneficiaries receive part or all of their services through managed care entities who are required to report medical claims data to states who then report it to CMS via T‐MSIS. Without accurate and timely data, it is not possible to analyze costs, utilization or trends; evaluate benefits; or determine the quality of services being provided.  Medicaid managed care encounter data was found to be incomplete and CMS needs to ensure this corrected.
  4.  Lack of quality national Medicaid data to identify fraud schemes and other vulnerabilities that cross state lines is hampering enforcement efforts. Identifying schemes in one state can alert other states to patterns of fraudulent or abusive practices that may be occurring in their jurisdiction and can be referred to law enforcement agencies. CMS must improve Medicaid data to ensure T‐MSIS achieves its full potential.
  5. States have not fully enacted enhanced provider screening that prevents bad actors from entering the Medicaid program to reduce improper payments and protect patients from harm, such as conducting fingerprint‐based criminal background checks and site visits. States need timely, complete, and accurate data to identify the providers seeking access to Medicaid monies and patients. CMS must ensure that states timely and fully implement critical safeguards.
  6. The Medicaid improper payment rate is 10.1 percent and CMS is working with state Medicaid agencies to develop corrective action plans that address state‐specific reasons for improper payments as a part of CMS’s Payment Error Rate Measurement Program (PERM). Additional guidance to the states by CMS is needed. OIG has also identified a number of states that inflate payment rates to increase their Federal Medicaid funding and CMS needs to closely review state Medicaid plans and plan amendments for potentially inappropriate cost‐shifting from states to the federal government.
  7. The OIG has found that states are not always correctly determining Medicaid eligibility for beneficiaries. The Affordable Care Act (ACA) allowed states to expand Medicaid eligibility and claim a higher Federal Medical Assistance Percentage, but incorrectly determining beneficiaries’ eligibility could result in the improper shift of costs from the state to the federal government. States must comply with requirements to verify applicants’ income, citizenship, identity, and other eligibility criteria in order to verify eligibility criteria.
  8. Medicaid is overpaying for prescription drugs due to underpaid rebates. Manufacturers are generally required to pay rebates to the states for covered outpatient drugs under the Medicaid Drug Rebate Program that includes reporting product and pricing information to CMS that is used to calculate the rebates owed. Manufacturer misreporting can result in manufacturers’ underpaying rebates, which inappropriately increases federal and state Medicaid costs. Overseeing states’ collection of manufacturer rebates remains a challenge for HHS.
  9. Medicaid must know with whom it is doing business, not only to prevent improper payments to ineligible providers, but also to protect beneficiaries from low‐quality care. The varying standards, and in some cases, minimal vetting, for Medicaid personal care services (PCS) providers, potentially expose the Medicaid program to financial fraud and Medicaid beneficiaries to abuse and neglect. CMS needs to improve states’ ability to monitor billing and care quality by enrolling PCS attendants as providers, or require them to register with their state Medicaid agencies, and assign each attendant a unique identifier.
  10. The OIG found that up to 99 percent of critical incidents of abuse and neglect of developmentally disabled were not reported to the appropriate law enforcement or state agencies as required. The OIG worked with the HHS Administration for Community Living, Office for Civil Rights, CMS, as well as with the DOJ and States to create a joint report entitled Ensuring Beneficiary Health and Safety in Group Homes Through State Implementation of Comprehensive Compliance Oversight. It features suggested model practices for states and CMS with four main aspects of handling critical incidents: investigation, reporting, correction, and transparency and accountability. It also detailed suggestions as to what actions states should take when group homes repeatedly fail to report incidents.
  11. The OIG partners with state Medicaid Fraud Control Units (MFCUs) which, last year, reported more than 1,500 convictions, nearly 1,000 civil settlements and judgments, and more than $1.8 billion in criminal and civil recoveries. The 50 existing MFCUs receive 75 percent of their funding on a matching basis from the federal government but often they encounter severe restrictions on their ability to maintain or expand staff.

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: 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.

Subscribe to the Kusserow on Compliance Newsletter

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