Part D Plans Generally Cover Drugs Commonly Used By Dual Eligibles-DHHS OIG

Download the complete report (PDF)
Adobe Acrobat Reader is required to view PDF files. Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

This report was mandated in the Patient Protection and Affordable Care Act of 2010.

Dual eligibles are individuals who are eligible for both Medicare and Medicaid. Overall, we found that the rate of Part D plan formularies' inclusion of the 191 drugs commonly used by dual eligibles is high, with some variation. On average, Part D plan formularies include 96 percent of the 191 commonly used drugs. In fact, 90 percent of dual eligibles are enrolled in Part D plans that use formularies that include at least 90 percent of the commonly used drugs.

Dual eligibles are a particularly vulnerable population. Overall, they are in worse health than the average Medicare beneficiary and typically require and use more prescription drugs, and more health care services in general, than other Medicare beneficiaries.

To control costs and ensure the safe use of drugs, Part D plans are allowed to establish formularies from which they may omit drugs from prescription coverage and control drug utilization through utilization management tools. These tools include prior authorization, quantity limits, and step therapy. CMS annually reviews Part D plan formularies. CMS also assesses the utilization management tools present in each formulary.

We found variation in the rate at which Part D plan formularies apply utilization management tools to the drugs commonly used by dual eligibles. Some Part D plan formularies apply these tools to none of the commonly used drugs, whereas others apply these tools to 45 percent of the commonly used drugs.

We make no recommendations in this memorandum report. However, we have provided CMS the list of 200 drugs commonly used by dual eligibles for its reference.

OIG Posts New Information on Accountable Care Organizations

On March 31st, OIG posted new information on Accountable Care Organizations. Thhe links provided below will take you directly to the new material.

---------------------
Federal Agencies Address Legal Issues Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program
http://oig.hhs.gov/fraud/aco.asp

Today, as part of a cross-agency, coordinated effort, several Federal agencies issued documents addressing legal issues regarding Accountable Care Organizations participating in the Medicare Shared Savings Program
(Shared Savings Program).

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would establish accountable care organizations (ACO) under the Shared Savings Program. The CMS proposed rule is available online at
http://www.cms.gov/sharedsavingsprogram

CMS and HHS Office of Inspector General (OIG) jointly issued a notice with comment period outlining proposals for waivers of certain Federal laws-the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law-in connection with the Shared Savings Program. CMS and OIG are also asking for comments on further waiver design considerations for the Shared Savings Program and for the separate waiver authority for the Center for Medicare and Medicaid Innovation under section 1115A of the Social Security Act. The joint notice with comment period is available online at
http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1

The Federal Trade Commission and the Department of Justice jointly issued a "Proposed Statement of Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program" (Antitrust Policy Statement). The Antitrust Policy Statement is available online at:
http://www.ftc.gov/opp/aco/
 
And the Internal Revenue Service (IRS) issued a notice requesting comments regarding the need for guidance on participation by tax-exempt organizations in the Shared Savings Program through ACOs. The IRS notice
is available online at
http://www.irs.gov/newsroom/article/0,,id=222814,00.html

Questionable Billing by Skilled Nursing Facilities

Image via WikipediaThe Department of Health and Human Services' Office of Inspector General has released the following report: Questionable Billing by Skilled Nursing Facilities (OEI-02-09-00202) http://go.usa.gov/rCy

Skilled nursing facilities (SNF) categorize beneficiaries into resource utilization groups (RUG) based on their care and resource needs. Medicare generally pays the most for ultra high therapy RUGs. Medicare also pays more for RUGs for beneficiaries who require more assistance with certain activities of daily living, such as eating.

The OIG found that SNFs increasingly billed Medicare for higher paying RUGs from 2006 to 2008, even though beneficiary characteristics remained largely unchanged. Specifically, they found large increases in RUGs for ultra high therapy, with payments to SNFs for ultra high therapy increasing by nearly 90 percent from 2006 to 2008, rising from $5.7 billion to $10.7 billion. In addition, RUGs for high levels of assistance with daily activities increased. The investigators  also found that for-profit SNFs were far more likely than nonprofit or government SNFs to bill for higher paying RUGs, and that a number of SNFs had questionable billing in 2008. Taken together, these findings raise concerns about the potentially inappropriate use of higher paying RUGs, particularly those for ultra high therapy.

U.S. GAO - Medicaid Outpatient Prescription Drugs: Estimated Changes to Federal Upper Limits Using the Formula under the Patient Protection and Affordable Care Act

GAO-11-141R December 15, 2010 Full Report (PDF, 15 pages)

Spending on prescription drugs in Medicaid--the joint federal-state program that finances medical services for certain low-income adults and children--totaled $15.2 billion in fiscal year 2008. State Medicaid programs do not directly purchase prescription drugs; instead, they reimburse retail pharmacies for covered prescription drugs dispensed to Medicaid beneficiaries. The federal government provides matching funds to state Medicaid programs to help cover a portion of the cost of these reimbursements. For certain outpatient prescription drugs for which there are three or more therapeutically equivalent versions, state Medicaid programs may only receive federal matching funds for reimbursements up to a maximum amount, which is known as a federal upper limit (FUL). FULs were designed as a cost-containment strategy and have historically been calculated as 150 percent of the lowest published price for the therapeutically equivalent versions of a given drug from among the prices published nationally in three drug pricing compendia. The prices from these compendia are list prices suggested by drug manufacturers and do not reflect actual transaction prices. State Medicaid programs have the authority to determine their own reimbursement amounts to retail pharmacies for covered prescription drugs. However, for drugs subject to a FUL, the federal government will only provide matching funds to the extent that a state's annual reimbursements do not exceed the sum of the FULs for all such drugs. Concerns have been raised about FULs calculated based on compendia prices. For example, a 2005 report by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) found that FULs calculated in this manner were ineffective at controlling spending on these drugs. The 2005 OIG report found that the prices in the three price compendia used to set FULs often greatly exceeded prices in the marketplace. The Deficit Reduction Act of 2005 (DRA) established a FUL formula based on average manufacturer price (AMP) rather than compendia prices. In contrast to compendia prices, AMP represents the average of actual transaction prices paid to manufacturers for a given drug and is typically less than any of a drug's published compendium prices. Drug manufacturers are required to report AMPs to the Centers for Medicare and Medicaid Services (CMS) on a monthly basis. DRA also expanded the list of drugs subject to a FUL from those with three or more therapeutically equivalent versions to include drugs with two or more therapeutically equivalent versions. Congressional interest in controlling prescription drug costs using AMP-based FULs continues. The Patient Protection and Affordable Care Act (PPACA) established a new AMP-based formula for calculating FULs and changed the definition of AMP.8 Under PPACA, FULs are to be calculated as no less than 175 percent of the utilization-weighted average of the most recently reported monthly AMPs for the pharmaceutically and therapeutically equivalent versions of a drug. Congress expressed interest in an early indication of the potential effects of PPACA on FULs and asked us to examine the likely effects of PPACA's AMP-based formula by drawing upon data from 2008 that we gathered for our November 2009 report, including 2008 AMPs that pre-date PPACA's changes to the definition of AMP. This report examines how, for selected drugs, estimated FULs using PPACA's AMP-based formula and 2008 data compare to pre-PPACA FULs and to average retail pharmacy acquisition costs.

We found that for most of the drugs in our sample, using AMP and other data from 2008, FULs based on PPACA's formula were lower than pre-PPACA FULs and higher than average retail pharmacy acquisition costs.
Full Summary

Workshop Regarding Accountable Care Organizations, and Implications Regarding Antitrust, Physician Self- Referral, Anti-Kickback, and Civil Monetary Penalty (CMP) Laws

This notice announces a public workshop hosted by the Federal Trade Commission (FTC), the Centers for Medicare & Medicaid Services (CMS), and the Office of the Inspector General (OIG) of the Department of Health and Human Services (DHHS).

This workshop will include panel discussions and a listening session on certain legal issues related to Accountable Care Organizations (ACOs). Physicians, physician associations, hospitals, health systems, consumers, and all others interested in ACOs are invited to participate, in person or by calling into the teleconference.

The meeting is open to the public, but attendance is limited to space and teleconference lines available. An agenda will be posted on the CMS Web site at http://www.cms.gov/center/ physician.asp prior to the session.

DATES: Meeting Date: The public workshop will be held on Tuesday, October 5, 2010 from 9 a.m. until 4:30 p.m. Eastern Daylight Time (E.D.T.).


Full Announcement

Review of Tennessee's Substance Abuse Prevention and Treatment Block Grants for Federal Fiscal Years 2003 Through 2008

The Tennessee Department of Mental Health and Developmental Disabilities' (the State agency) controls over the expenditure of its Substance Abuse block grant funds were not always adequate.  Specifically, OIG noted four weaknesses in State agency policies and procedures involving:  (1) Federal reporting, (2) subrecipient monitoring, (3) subrecipient expenditure approval, and (4) maintenance of effort and earmarking.

Read More/Download Report

Medicare Part B Services During Non-Part A Nursing Home Stays: Mental Health

Image via Wikipedia

This report presents findings based on a medical review of Medicare Part B mental health claims provided during non-Part A nursing home stays in 2006.  Non-Part A stays occur in nursing homes when the stay is not paid for under the Medicare Part A posthospital skilled nursing facility benefit. 

We found that 39 percent of claims for mental health services that Medicare Part B allowed during non-Part A nursing home stays in 2006 did not meet the program requirements for coverage.  Specifically, services were medically unnecessary, undocumented or inadequately documented, or miscoded.  These errors resulted in an estimated $74 million in inappropriate Part B payments, of the $211 million allowed in 2006.  Claims for psychotherapy services comprised the majority of these inappropriately paid claims, which is consistent with findings from the CMS 2006 Comprehensive Error Rate Testing report.  Additionally, we found that 71 percent of the sampled mental health claims contained inaccurate diagnosis codes or lacked adequate documentation to support the diagnosis code, although these codes did not directly affect reimbursement. 

Read/Download Report

OIG Posts Compendium of Unimplemented Recommendations 3/11

The "Compendium of Unimplemented Office of Inspector General Recommendations" combines the formerly published "Red Book" (unimplemented monetary recommendations) and the "Orange Book" (unimplemented nonmonetary recommendations) into one publication. The "Red Book" focused on significant Office of Inspector General (OIG) cost-saving recommendations that had not been fully implemented. The "Orange Book" focused on unimplemented recommendations to improve HHS programs. Full implementation of the recommendations in this compendium could achieve substantial savings and increase the effectiveness of the Department's programs.

Each narrative contains a background summary, findings, recommendation(s), status, report number(s), and report issue date(s). In the case of monetary recommendations, there is also an estimate of the savings that may be achieved by implementing the recommendations. The estimated value of each monetary recommendation is based on the specifics of each review and not extrapolated beyond the scope of the original review. The actual savings to be achieved depends on the specific legislative, regulatory, or administrative actions. However, the estimates provide a general indication of the magnitude of savings possible.

Link to Report

ADVERSE EVENTS IN HOSPITALS: METHODS FOR IDENTIFYING EVENTS

OBJECTIVE To evaluate the usefulness of selected methods for identifying events that harm hospitalized Medicare beneficiaries.

BACKGROUND
The term “adverse event” describes harm to a patient as a result of medical care or harm that occurs in a health care setting. The term “never events” refers to a specific list of serious events, such as surgery on the wrong patient, that the National Quality Forum deemed “should never occur in a healthcare setting.” The Tax Relief and Health Care Act of 2006 (the Act) mandated that the Office of Inspector General (OIG) report to Congress about such events, including making recommendations about processes for identifying events. To meet the requirements of the Act, OIG published a series of reports in 2008 and will publish additional reports based on ongoing work.

In 2008, OIG conducted a case study to determine the incidence of adverse events (hereinafter referred to as events) by reviewing a random sample of 278 Medicare beneficiary hospitalizations selected from all Medicare discharges from acute care hospitals in two selected counties during a 1-week period in August 2008. Using a two-stage review process, the case study identified 120 events. The first stage consisted of using five selected methods to screen for events, including nurse reviews of medical records, interviews of Medicare beneficiaries, two types of billing data analysis, and reviews of internal hospital incident reports. Each time a screening method indicated the possibility that an event occurred during the hospitalization, researchers designated the possible event as a “flag.” The second stage consisted of physician reviews of medical records for 183 of the 278 beneficiary hospitalizations—those with at least 1 flag. This report provides an indepth examination of the usefulness of the five screening methods used for identifying events. OIG considered the most useful methods to be those that identified the greatest number of events.
Read/Download Report

BENEFICIARIES REMAIN VULNERABLE TO SALES AGENTS’ MARKETING OF MEDICARE ADVANTAGE PLANS

Image via Wikipedia

The Centers for Medicare & Medicaid Services (CMS) contracts with private companies, known as plan sponsors, to provide health insurance plans under MA. Plan sponsors may market their MA plans through independent sales agents, who may market on their own or through a field marketing organization (FMO), or by employing their own sales agents.

Between June 2007 and June 2008, Congress held three hearings examining sales agents’ marketing of MA plans. During these hearings, witnesses testified that sales agents had marketed without licenses, portrayed themselves as Medicare employees, and misled Medicare beneficiaries about plan benefits. These types of aggressive, deceptive, and fraudulent marketing practices could result in Medicare beneficiaries enrolling in plans that do not meet their health care needs. Several members of Congress raised concerns about sales agents’ marketing to Medicare beneficiaries to the Office of Inspector General (OIG); one specifically requested that OIG examine the marketing practices of MA plans.

In July 2008, Congress enacted the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which prohibited or limited certain marketing activities by sales agents and plan sponsors. In September 2008, CMS published regulations implementing the MIPPA’s marketing provisions, including limiting sales agent compensation to independent sales agents. In addition, CMS regulations required that all sales agents be trained and tested annually and be State licensed. To examine selected MA plan sponsors’ compensation of sales agents and determine whether the selected plan sponsors ensured that their sales agents were qualified, we reviewed compensation, testing, and licensure data for a random sample of sales agents. We purposively selected the plan sponsors based on their size and the rate of marketing complaints they received. We also compared complaints regarding sales agent marketing reported to CMS from 2008 and 2009 to determine whether the number and topics of Medicare beneficiaries’ complaints changed after implementation of the sales agent marketing regulations.

FINDINGS
*All five plan sponsors using independent sales agents had compensation practices that resulted in inappropriate financial incentives.
*Five of the six selected plan sponsors did not ensure that all sales agents were qualified under CMS’s regulations.
*The number and topics of sales agent marketing complaints remained unchanged after implementation of sales agent marketing regulations. Read More/Download Report

Sebelius, West Highlight New Tips to Prevent Medical Identity Theft and Medicare Fraud

Image via Wikipedia

New Information Available at www.StopMedicareFraud.gov

Secretary of Health and Human Services Kathleen Sebelius and Assistant Attorney General Tony West today highlighted the Obama Administration’s work to fight Medicare Fraud and released new tips and information to help seniors and Medicare beneficiaries deter, detect and defend against Medical identity theft. Medical identity theft occurs when someone steals a patient’s personal information, such as his or her name and Medicare number, and uses the information to obtain medical care, to buy drugs or supplies, or to fraudulently bill Medicare using that patient’s stolen identity. The new tips and a printable brochure were produced by the HHS Office of the Inspector General (OIG) and are available now at www.StopMedicareFraud.gov and www.oig.hhs.gov/fraud/idtheft.

“When criminals steal from Medicare, they are stealing from all of us. That’s why fighting Medicare fraud is one of the Obama Administration’s top priorities,” said Secretary Sebelius. “Preventing medical identify theft is an important part of our work to stop Medicare fraud, and these tools will give seniors important information about how to deter, detect and defend against ID theft and fraud.”

“This Administration is committed to guarding Medicare against fraud and abuse,” noted Assistant Attorney General West. “The Department of Justice (DOJ), in collaboration with our partners at the Department of Health and Human Services (HHS), will continue to protect the integrity of the nation’s public health programs and vigorously pursue those who seek to take advantage of our most vulnerable citizens.”

“Medical identity theft can disrupt your life, damage your credit rating, and threaten your health if inaccurate information ends up in your medical records,” added HHS Inspector General Daniel R. Levinson. “OIG’s special agents frequently uncover fraud schemes that involve the sale and use of stolen Medicare identification numbers. We’re cracking down on these schemes and working to help stop medical identity theft before it happens.”

The materials released today include practical steps to help “deter, detect, and defend” against medical identity theft. Beneficiaries are reminded to beware of offers of free medical equipment, services, or goods in exchange for their Medicare numbers. Beneficiaries are also encouraged to regularly review their Medicare Summary Notices, Explanations of Benefits statements, and medical bills for suspicious charges and to report suspected problems.

The effort to help prevent medical identity theft is one part of the Obama Administration’s work to crack down on Medicare fraud. In May, Attorney General Eric Holder and Secretary Sebelius announced the creation of a new interagency effort, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to combat Medicare fraud. The HEAT team includes senior officials from DOJ and HHS. HEAT team efforts include the expansion of joint DOJ-HHS Medicare Fraud Strike Force teams that have been successfully fighting fraud in South Florida and Los Angeles to additional cities including Detroit and Houston. Established in 2007, these teams have a proven record of success using data analysis techniques and community policing to identify, investigate and prosecute on-going fraud.

The Centers for Medicare & Medicaid Services (CMS) has undertaken other steps to fight fraud and protect beneficiaries who buy durable medical equipment or rely on home health services. On October 1, all durable medical equipment suppliers across the nation, except for pharmacies, must be certified by Medicare, a requirement that assures beneficiaries that their suppliers are valid businesses and meet Medicare’s financial and quality standards.

At today’s event, Sebelius also highlighted the SMP programs and was joined by SMP volunteer Joanna T. Gibson of Felton, Del. Formerly known as Senior Medicare Patrol programs, the SMP programs are funded by HHS’ Administration on Aging and help Medicare and Medicaid beneficiaries prevent, detect, and report health care fraud. Because this work often requires face-to-face contact to be most effective, SMPs nationwide recruit and train nearly 5,000 volunteers every year to help in this effort. Most SMP volunteers are both retired and Medicare beneficiaries and thus well-positioned to assist their peers.

“We all have to pitch in and do what we can to prevent our Medicare dollars from being wasted on fraud,” said Gibson. “And we can start by learning more about what Medicare covers, reading our Medicare statements, and reporting provider charges that just don’t seem right.”

To learn more about stopping Medicare fraud, visit www.StopMedicareFraud.gov. To report suspected Medicare fraud call the Inspector General’s toll-free Hotline at 800-447-8477 (800-HHS-TIPS). The toll-free TTY number is 800-377-4950.

Sebelius, West Highlight New Tips to Prevent Medical Identity Theft and Medicare Fraud

DHHS OIG FY2010 Work Plan

Image via Wikipedia

This publication describes activities that OIG plans to initiate or continue with respect to the programs and operations of the Department of Health and Human Services (HHS) in the next year.

In this Work Plan, the ongoing and planned reviews are grouped into two major parts:

• “Centers for Medicare & Medicaid Services” (CMS) describes reviews related to Medicare, Medicaid, information systems controls, the Childrens Health Insurance Program, and related investigations and legal counsel to OIG.

• “Public Health and Human Services Programs and Departmentwide Issues” describes reviews related to agencies such as the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the National Institutes of Health (NIH), the Administration on Aging (AoA), and the Administration for Children and Families (ACF). This part also describes departmentwide issues, such as financial accounting and information systems management.

Our planned reviews related to the American Recovery and Reinvestment Act of 2009 (Recovery Act) are provided in Appendix A of this document.

Read/Download Work Plan

Related articles by Zemanta

• OIG Work Plan Includes Medicare Issues for Skilled Nursing Facilities (medicareupdate.typepad.com)

Updated DHHS Enforcement Actions | Office of Inspector General

Image via Wikipedia

Updated Civil Monetary Penalties and Exclusion List


The Social Security Act authorizes the Secretary of HHS to seek civil monetary penalties (CMPs) and assessments for many types of conduct. The Secretary of HHS has delegated many of these CMPs to the OIG. In most cases for which the OIG may seek CMPs, the OIG may also seek exclusion from participation in all Federal health care programs. Many of the OIG's CMPs are in the Civil Monetary Penalties Law ("CMPL"), 42 U.S.C. § 1320a-7a, and the OIG's CMPs codified elsewhere in the Social Security Act adopt by reference many of the provisions of the CMPL.

Continue Reading

AMNews: Sept. 17, 2009, 2009. Medicaid claims lack key data that could help find fraud ... American Medical News

Image via Wikipedia

By Chris Silva, AMNews staff

Medicaid claims information submitted by states to the Centers for Medicare & Medicaid Services is slow in being released to the public and often does not contain many data elements that can assist in fraud detection, according to a report by investigators from the Dept. of Health and Human Services Office of Inspector General.

Read More

MEDICARE PART D RECONCILIATION PAYMENTS FOR 2006 AND 2007

Image via Wikipedia

The DHHS Office of Inspector General found that Part D sponsors owe a net total of $18 million to Medicare
for the 2007 Part D payment reconciliation, which is significantly less
than the net total of $4.4 billion that sponsors owed for 2006. Despite
this improvement, sponsors continue to submit inaccurate bids and make
large unexpected profits.

CMS makes monthly prospective payments to sponsors for providing
prescription drug coverage to Medicare beneficiaries. These payments
are based on estimates that sponsors provide in their bids prior to the
beginning of the plan year. After the close of the plan year, CMS
reconciles these payments with the sponsors' actual costs to determine
whether sponsors owe money to Medicare or Medicare owes money to
sponsors.

More specifically, sponsors owe Medicare a net total of $600 million
because of unexpected profits or losses that triggered risk sharing for
2007. Many of these sponsors overestimated the costs of providing the
benefit in their bids. As a result, Medicare payments to sponsors and
beneficiary premiums were higher than necessary. Medicare recoups a
portion of these higher payments. However, beneficiaries do not
directly recoup any of the money that they paid in higher premiums. At
the same time, sponsors will receive a net total of $406 million from
Medicare for the low-income cost-sharing subsidy and a net total of $186
million for the reinsurance subsidy because they underestimated these
costs in their bids.

Further, sponsors continue to make large unexpected profits. Based on
OIG calculations, the 179 sponsors that had profits large enough to
trigger risk sharing made at least $1.02 billion in unexpected profits
in 2007. These sponsors owe a portion of these unexpected profits to
Medicare based on the risk-sharing requirements. In addition, sponsors
included an estimated $1.07 billion of expected profits in their bids.

Finally, for 2006, CMS collected almost all of the funds that sponsors
owed to Medicare in November and December 2007. However, CMS has not
collected a total of $14 million from five sponsors for 2006.

Based on these findings, OIG recommends that CMS should: (1) ensure that
sponsors' bids more accurately reflect their costs of providing the
benefit to Medicare beneficiaries, (2) hold sponsors more accountable
for inaccuracies in the bids, (3) determine whether changes to the risk
corridors are appropriate, (4) determine whether alternative
methodologies would better align payments with sponsors' costs for the
low-income cost-sharing and reinsurance subsidies, and (5) follow up
with the sponsors that owe funds for 2006. CMS concurred or agreed with
three of the recommendations but did not state whether it concurred with
OIG's second or third recommendations.

Read More

ADVERSE EVENTS IN HOSPITALS: OVERVIEW OF KEY ISSUES

The DHHS Office of the Inspector General has released a new report examining the key issues regarding adverse events in hospitals. SUMMARY The extensive range of entities involved in researching and addressing adverse events shows that reducing the incidence of adverse events is a high priority. Stakeholders described the current environment among hospitals and policymakers as being on the threshold of accelerated progress. They point to a large body of research as improving understanding, including recognition of the critical role of hospital systems in guarding against adverse events. Additionally, new policies, such as denying hospitals higher payment for admissions complicated by certain adverse events and public disclosure of events, strengthen hospital incentives to develop safer practices. These advancements in clinical understanding, combined with heightened controls, hold promise for reducing the incidence of adverse events in hospitals and improving the quality of care. KEY ISSUES Issue 1: Estimates of adverse event incidence vary widely Issue 2: Nonpayment policies are gaining prominence Issue 3: Hospitals rely on staff to report adverse events Issue 4: Hospitals report adverse events to oversight entities Issue 5: Public disclosure has benefits but raises concerns Issue 6: Hospitals may be slow to apply practices Issue 7: Interviews and literature reveal strategies Link to Full Report

South Florida Durable Medical Equipment Suppliers: Results of Appeals

For a March 2007 report, OIG conducted unannounced site visits to 1,581 South Florida durable medical equipment suppliers. Four hundred ninety-one (491) of these suppliers failed to meet Medicare supplier standards, and CMS revoked the suppliers' billing privileges. Nearly half of the revoked suppliers appealed the revocations and received hearings. Hearing officers reinstated the billing privileges for 91 percent of these suppliers. Two-thirds of suppliers whose billing privileges were reinstated have subsequently had their privileges revoked again or inactivated, and some individuals connected to reinstated suppliers have been indicted. We found that because there are no criteria regarding the types of evidence necessary to reinstate the billing privileges of suppliers, hearing officers reinstated the suppliers' billing privileges based on a variety of evidence. Examples of evidence that suppliers provided include photographs, affidavits, utility bills, and leases. Based on the report's findings, we recommended that CMS strengthen the appeal process by developing criteria regarding the types of evidence required for hearing officers to reinstate suppliers' billing privileges. CMS agreed that it should consider establishing guidelines regarding the evaluation of evidence that a hearing officer will review during the appeal process.

Medicare Drug Plans Fraud & Abuse, Compliance Plans

Medicare Drug Plan Sponsors' Identification of Potential Fraud and Abuse (OEI-03-07-00380) Oversight of Prescription Drug Plan Sponsors' Compliance Plans (OEI-03-08-00230) Both the fraud and abuse report and the compliance plan report are part of OIG's continuing work focusing on oversight of the Part D program. Because prescription drug plan (PDP) sponsors are the first line of defense against Part D fraud and abuse, a crucial aspect of protecting Part D integrity is ensuring that PDP sponsors have comprehensive and effective compliance programs to detect and deter fraud, waste, and abuse. In two reviews, we examined PDP sponsors' identification of potential fraud and abuse incidents and CMS' oversight of PDP sponsors' compliance plans. We identified concerns related to both PDP sponsors' roles in protecting Part D integrity and CMS's limited oversight of PDP sponsors' implementation of Part D safeguards. We recommended several actions to strengthen the oversight of Part D integrity. In the fraud and abuse review, OIG found that 24 of 86 PDP sponsors did not identify any potential fraud and abuse incidents in the first 6 months of 2007. Seven PDP sponsors identified 90 percent of all incidents of potential fraud and abuse. Inappropriate billing was the most prevalent type of potential fraud and abuse incident identified. Also, not all of the sponsors that identified potential fraud and abuse incidents conducted inquiries, initiated corrective actions, or made referrals for further investigation. Therefore, OIG recommends that CMS: (1) review Part D plan sponsors to determine why certain sponsors have especially high or low volumes of potential fraud and abuse; (2) determine whether the Part D plan sponsors that identified potential fraud and abuse initiated inquiries and corrective actions as required by CMS, and made referrals for further investigation as recommended by CMS; (3) require Part D plan sponsors to maintain and routinely report information related to the results of sponsors' fraud and abuse programs; and (4) use this required information to help determine the effectiveness of sponsors' fraud and abuse programs. In response to our first recommendation, CMS described its intentions to follow up with its Medicare Drug Integrity Contractors, revise reporting requirements, and provide guidance to PDP sponsors on incident tracking. CMS also concurred with our second recommendation but did not indicate whether it concurred with our third or fourth recommendations. We reviewed CMS's oversight of PDP sponsors' compliance plans in followup to a 2006 OIG report and found that CMS conducted only one audit of a PDP sponsor's compliance plan in 2007. This was a focused audit; none of CMS's 17 routine audits included a compliance plan review. Although CMS originally planned to begin routine compliance plan audits in January 2007, as of early August 2008, CMS had not conducted any routine audits of PDP sponsors' compliance plans. Further, CMS instructed all PDP sponsors to complete a compliance plan self-assessment, but OIG found that CMS did not verify sponsors' responses. The self-assessment was based on requirements and recommendations in Chapter 9 of the "Prescription Drug Benefit Manual;" however, not all of the compliance plan requirements in Chapter 9 were included in the self-assessment. CMS followed up with 23 PDP sponsors that attested that they had not implemented one or more of the compliance plan requirements in the self-assessment. However, CMS did not request supporting documentation to confirm that these PDP sponsors corrected their compliance plans. OIG recommends that CMS conduct audits to verify that PDP sponsors' compliance plans meet requirements. Specifically, these audits should cover all compliance plan requirements contained in both regulations and Chapter 9 of the "Prescription Drug Benefit Manual." CMS may also want to assess implementation of its compliance plan recommendations. CMS concurred with our recommendation and stated that it will begin audits of Part D sponsors' compliance plans in the near future. These audits will consist of a limited number of desk audits; however, as more resources become available, CMS stated it would include more audits, onsite reviews, and other more comprehensive fraud prevention activities.

DHHS OIG Nationwide Review of CMS HIPAA Oversight

On October 7, 2003, the U.S. Department of Health and Human Services delegated to CMS: (I) the authority and responsibility to interpret, implement, and enforce the HIPAA Security Rule provisions; (2) the authority to conduct compliance reviews and to investigate and resolve complaints ofHIPAA Security Rule noncompliance; and (3) the authority to impose civil monetary penalties for a covered entity's failure to complywith the HIPAA Security Rule provisions. The Final Rule for enforcement of this delegation became effective on February 16, 2006. Our objective was to evaluate the effectiveness of CMS's oversight and enforcement of covered entities' implementation of the HIPAA Security Rule. CMS had taken limited actions to ensure that covered entities adequately implement the HIPAA Security Rule. These actions had not provided effective oversight or encouraged enforcement of the HIPAA Security Rule by covered entities. Although authorized to do so by Federal, regulations as of February 16,2006, CMS had not conducted any HIPAA Security Rule compliance reviews of covered entities. To fulfill its oversight responsibilities, CMS r{{lied on complaints to identify any noncompliant covered entities that it might investigate. As a result, CMS had no effective mechanism to ensure that covered entities were complying with the HIPAA Security Rule or that ePHI was being adequately protected. Although reliance on complaints alone was ineffective for identifying noncompliant covered entities, we noted that CMS had an effective process for receiving, categorizing, tracking, and resolving complaints. CMS has developed and implemented detailed procedures for receiving complaints, communicating with filed-against entities, coordinating with the Office for Civil Rights for complaints with privacy elements, developing corrective action plans, and remediating complaints. Ongoing Office of Inspector General audits of various hospitals nationwide indicate that CMS needs to become more proactive in overseeing and enforcing implementation of the HIPAA Security Rule by focusing on compliance reviews. Preliminary results of these audits show numerous, significant vulnerabilities in the systems and controls intended to protect ePHI at covered entities. These vulnerabilities place the confidentiality and integrity of ePHI at high risk. During our audit, CMS began taking steps to conduct compliance reviews. After we completed our fieldwork but before we issued our report, CMS executed a contract to conduct compliance reviews at covered entities. We recommend that CMS establish policies and procedures for conducting HIPAA Security Rule compliance reviews of covered entities. CMS did not agree with our findings because it believes that its complaint-driven enforcement process has furthered the goal of voluntary compliance. CMS agreed, however, that compliance reviews are a useful enforcement tool as part of a more comprehensive enforcement strategy. CMS agreed with our recommendation to establish specific policies and procedures for conducting compliance reviews of covered entities but emphasized that compliance reviews are just one of several tools that can be used to promote compliance. Although CMS’s complaint-driven enforcement process has furthered the goal of voluntary compliance, the significant vulnerabilities we identified at hospitals throughout the country would not generally have been identified in HIPAA Security Rule complaints. In fact, CMS has received very few complaints regarding potential HIPAA Security Rule violations. Including compliance reviews of covered entities to its oversight process will enhance CMS’s ability to determine whether the HIPAA Security Rule is being properly implemented. OIG Report

Ohio Medicaid Long- Term-Care Payments to Two Providers for the Same Beneficiaries for the Same Dates of Services

The DHHS Office of the Inspector General conducted an audit of the Ohio Medicaid long-term care payments for the period October 1, 1998 through September 30, 2005. During the audit period, the State agency paid $70,644,566 ($41,157,524 Federal share) to 3,100 long-term-care providers (1,550 provider pairs) for services provided to the same beneficiaries for the same dates of service. The State agency should not have paid two different providers for services provided to the same beneficiares for the same dates of service unless one of the providers fuished services that were not reimbursed through the long-term-care daily rate. Of a judgmental sample of 100 providers (50 pairs claiming services for the same beneficiaries for the same dates of service) that were paid $38,783,184 ($22,595,083 Federal share), the Statefor the same dates of State agency appropriately claimed $20,699,649 ($12,059,616 Federal share) and paid 52 providers for long-term-care services. However, the State agency nappropriately claimed $18,083,535 ($10,535,467 Federal share) and paid 48 providers that did not provide medical assistance to Medicaid beneficiaries. Of the unallowable payments totaling $18,083,535 ($10,535,467 Federal share), the State agency, as of the start of our audit in July 2007, reported and refunded $8,446,697 ($4,921,045 Federal share) through adjustments decreasing its Medicaid claims for prior quarters on the CMS-64 for the quarter ended June 30, 2005, and had not reported and refunded $9,636,838 ($5,614,422 Federal share). The State agency made the unallowable payments because it did not implement controls within its automated payment system to identify payments to two providers for services claimed for the same beneficiaries for the same dates of service. In addition, the State agency’s policies and procedures for reporting and refunding previous overpayments on the CMS-64 did not ensure the identification of all the unallowable payments.