Kusserow on Compliance: OIG identifies the top HHS challenges

The HHS Office of Inspector General (OIG), in its mid-year review of its work plan, included a summary of the Top Management Challenges (TMCs) facing HHS, along with associated recommendations for improvement. Some of the recommendations reflect persistent and concerning vulnerabilities that the OIG has highlighted for HHS over many years, while others forecast new and emerging issues for the upcoming year and beyond. The current TMCs are identified as follows:

  1. Protecting an expanding Medicaid program from fraud, waste, and abuse. Enrollment in Medicaid and Children’s Health Insurance Program (CHIP) programs has grown by 15 million people since October 2013, and the program remains a top management priority given long-standing program integrity issues and expanding eligibility. CMS needs to provide more oversight of Medicaid expansion, oversight of Medicaid managed care, improving the effectiveness of Medicaid data and systems, state policies that inflate federal costs, and ensuring quality care for Medicaid beneficiaries.
  1. Fighting fraud, waste, and abuse in Medicare Parts A and B. HHS must find ways to reduce wasteful spending and promote better health outcomes at lower costs in reducing improper payments, preventing and deterring fraud, and fostering economical payment policies. More effort is needed to better ensure that Medicare payments are accurate and appropriate, through (a) better identification of problems; (b) more timely recovery of overpayments; and (c) implementing better safeguards to prevent recurrence of problems. In that CMS relies on contractors for most of these crucial functions, the agency must ensure more effective on their part. The Medicare appeals system remains broken and needs fundamental changes to resolve appeals efficiently, effectively, and fairly.
  1. Meaningful and secure exchange and use of electronic information and health information. Technology, including electronic health records (EHRs), offers opportunities for improved patient care, more efficient practice management, and improved overall public health. HHS needs to find ways to measure the extent to which EHRs and other health information technologies (ITs) improve, and ensure that adopted policies advance towards this. HHS faces challenges safeguarding privacy and security of health IT, improving information flow, and ensuring a return on health IT investments. Threats to information privacy and security are evolving. Although progress was noted, more remains to be done to address health IT privacy and security issues, as well as the flow of information.
  1. Administration of grants, contracts, and financial and administrative management systems. HHS is the largest grant-making organization in the federal government, with over $402 billion awarded in FY 2014. The scale of this program can be understood by comparing it with the entire Department of Defense budget of $529 billion for the same period. Increased oversight is need for better grants and contract management, financial statement audit revelations of defective system controls, and improper payments. More can be done to identify poorly performing grantees and those at risk of misspending federal dollars.
  1. Ensuring appropriate use of prescription drugs. The prescription drug coverage is provided for 41 million Medicare Part D and another 71 million Medicaid beneficiaries. Part D is the fastest-growing component of the Medicare program. Management of these drug programs faces numerous challenges in oversight, drug abuse and diversion, and questionable, inappropriate utilization, and enrolling prescribers. Among actions needed include requiring sponsors to report probable fraud, waste, and abuse identified and corresponding actions.
  1. Ensuring quality in nursing home, hospice, and home- and community-based care. Fraud, waste, and abuse with nursing home, hospice, and home- and community-based care continues to be a serious problem. More needs to be done in improving internal controls and better guidance and training for surveyors to ensure that nursing homes with recorded quality and safety issues correct their deficiencies.
  1. Implementing, operating, and overseeing the health insurance marketplaces. The marketplaces are critical elements of the Patient Protection and Affordable Care Act (ACA). Initially the challenges centered on implementation, operation, and oversight of the marketplaces. Looking forward, the OIG anticipates challenges with payments, eligibility determinations, management and administration, and the security of the marketplaces; and calls upon CMS to strengthen marketplace operations and work with states to ensure compliance with federal requirements.
  1. Reforming delivery and payment in health care programs. In January 2015, the HHS Secretary announced goals to foster better care, smarter spending, and healthier people by tying traditional Medicare payments to alternative payment models (APMs), and to quality and value. CMS must establish policy, infrastructure, data systems, program integrity, and oversight mechanisms to successfully implement these and other changes. CMS must also strengthen Medicare Advantage to ensure that benefits are provided only to eligible beneficiaries and that data are available for fraud prevention and detection.
  1. Effectively operating public health and human services programs. HHS must focus on public health preparedness and emergency response, enabling access to and quality of services, and protecting vulnerable populations. Continued collaboration of federal, state, and communities is necessary for proper disaster response.
  1. Ensuring the safety of food, drugs, and medical devices. The FDA must address areas of particular high risk, including: compounded drugs, imported food and drugs, food facilities, off-label promotion and kickbacks, and dietary supplements.

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: New program exclusion guidance issued by the OIG

On April 18, 2016, the HHS Office of Inspector General (OIG) announced at the Health Care Compliance Association (HCCA) conference in Las Vegas that it has issued new guidance, superseding that issued in 1997, regarding the process followed in determining whether a health care entity or practitioner should be excluded from participation in federal health care programs. The OIG advises that it evaluates health care fraud cases “on a continuum . . . of future risk to the federal health care programs.” Cases demonstrating high risk will result in program exclusion and cases with low future risk may result in a decision not to exclude. The OIG stated that “in the absence of egregious conduct such as patient harm or intentional fraud, relatively low financial harm weighs in favor of not requiring integrity obligations” through a Corporate Integrity Agreement (CIA) or a program exclusion. The OIG has provided advice on the steps that can be taken to mitigate enforcement action through program exclusion. It also “flags” the critical factors the OIG will use in assessing a provider’s or practitioner’s future risk to federal health care programs, as well as whether program exclusion to address high risk is necessary.

Tom Herrmann, JD, who served over 20 years in the Office of Counsel to the Inspector General, explained that “The authorities referred to in this guidance is grounded in law and regulations that were delegated to the OIG to exclude entities and individuals from participation in Medicare, Medicaid, and other federal health care programs. To fully appreciate the significance of this guidance, it should be read in conjunction with another OIG Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs, issued in 2013.”

Exclusions are of two types, “mandatory” and “permissive or discretionary.” It is mandatory under the law, if there is a conviction for a program-related crime or patient abuse/neglect. In the new transmittal, the OIG focused on permissive exclusions for conduct that is determined to constitute fraud, kickbacks, or another prohibited activity and sets forth the “non-binding criteria the OIG intends to use in evaluating exclusion. The OIG explains in the transmittal how a decision will be made on the appropriateness of program exclusion when there is a finding of liability or where the Department of Justice settles a case brought under the False Claims Act (FCA). In such a case, the OIG will presume that some period of exclusion should be imposed against such a party. It also notes, “this presumption in favor of exclusion is rebuttable in certain situations” and in the new guidance “sets forth circumstances in which the presumption may be rebutted and the non-binding factors that OIG will use to make such a determination.”

Often, upon resolution of a FCA case, the OIG and the defendant enter a CIA, where an entity or individual agrees to assume certain “integrity obligations in exchange for a release of OIG’s . . . exclusion authority.” Herrmann notes, “It is the OIG view that a CIA enhances their oversight and promotes the entity’s compliance program through integrity obligations that mitigate future risks. Entities who fail to enter into a CIA represent a continuing risk that necessitates their using other tools to mitigate compliance risks.”

The OIG will decide whether or not to impose program exclusion, based on its evaluation of the following factors:

  • nature and circumstances of the conduct at issue, including adverse impact on individuals and financial loss;
  • leadership role;
  • history of prior fraudulent conduct;
  • conduct during the investigation;
  • significant ameliorative efforts; and
  • history of compliance.

Herrmann finds it noteworthy that the OIG will usually give a release a person from exclusion without requiring a CIA when the person self-discloses the fraudulent conduct to the agency, and agrees to “robust integrity obligations” that the OIG determines sufficient to protect the federal health care programs. The new guidance should help those facing potential legal exposure under the FCA to decide on appropriateness of self-disclosing improper conduct involving federal health care programs. The OIG has provided transparency concerning their exclusion decision-making process. It also sends a message that encourages voluntary compliance efforts and the adoption of remedial measures in cases where there is legal exposure.

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.