October 2010 Archives

October 18, 2010

OIG 2011 Work Plan: The Medicare Audits and the Appeals Process

With respect to the Medicare appeals process, the OIG plans to review and examine the following:

• The timeliness of the Medicare contractors' determinations on requests for reconsideration at the first level of Medicare appeals as they have 60 days to conclude a redetermination pertaining to a denied claim.
• The characteristics of cases brought before an administrative law judge (ALJ) and whether a CMS representative participates in the ALJ hearings.
• Appropriateness and consistency of the national provider identifier (NPI) enumeration data and the Medicare Provider Enrollment, Chain and Ownership System (PECOS).
• Quality Assurance Surveillance Plan (QASP) performance evaluation reports of Medicare Administrative Contractors (MACs) "to determine whether the reports address the results of activities performed by the MACs." QASP was developed to monitor and evaluate the MACs. The OIG will examine whether CMS addresses the deficiencies identified in the QASP reports.
• Whether Zone Program Integrity Contractors (ZPICs) identified and addressed potential fraud and abuse incidents and whether there were any issues or barriers in performing their contractual responsibilities. The ZPICs were established to replace the program safeguard contractors (PSCs) in an effort to consolidate all program integrity functions into a single contractor.
• How ZPICs addressed instances of conflicts of interest, whether conflicts were disclosed, and how they were resolved.
• How CMS addresses contractor vulnerabilities identified by ZPICs, PSCs, and Medicare Drug Integrity Contractors (MEDIC).
• Because of discovered problems with Recovery Audit Contractor (RAC) reporting of potential fraud and because the Affordable Care Act expanded the RAC program to Medicaid and Medicare Parts C and D, the OIG will review the RAC program and CMS's oversight of the program.

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October 15, 2010

OIG 2011 Work Plan: Medical Equipment and Supplies

The OIG plans to examine a number of areas pertaining to medical equipment and supplies, including, but not limited to, the following:

• The appropriateness of Part B claims in selected geographic areas with high-volume claims and reimbursement for durable medical equipment (DME) suppliers of power mobility devices, hospital beds and accessories, oxygen concentrators, and enteral/parenteral nutrition.
• "Compliance of suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) with Medicare requirements for frequently replaced DME supplies." For replacement DME supplies, a beneficiary or a beneficiary's caregiver must request refills prior to a supplier dispensing them. The OIG has found there to be an automatic dispensing of continuous positive airway pressure systems and respiratory -assist device supplies without an order for a refill.
• Claims pertaining to power wheelchairs and whether they were appropriate and medically necessary with supporting physician documentation.
• Claims submitted with modifiers to determine if the provider has the appropriate documentation on file to support the use of the modifier.
• Medicare enrollment and monitoring of DMEPOS suppliers to screen applications with inaccurate information.

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October 14, 2010

OIG 2011 Work Plan: Sleep Testing

Because Medicare payments for sleep testing has increased from $62 million in 2001 to $235 million in 2009, the OIG will review the appropriateness of payments for such testing and the factors contributing to such a steep increase in payments. Additionally, the OIG will examine the appropriateness of Medicare payments for sleep testing at sleep disorder clinics and whether or not the sleep tests procedures were in accordance with Medicare requirements.

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October 13, 2010

OIG 2011 Work Plan: Diagnostic Testing

The OIG will review the high-cost diagnostic tests to ensure that they were medically necessary by looking at the same diagnostic tests ordered by the primary care physician as well as the specialist. With respect to independent diagnostic testing facilities (IDTFs), federal regulations require compliance with 17 standards. The OIG will look at IDTFs to ensure compliance with all standards in addition to identifying billing patterns of non-compliant IDTFs.

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October 12, 2010

OIG 2011 Work Plan: Imaging Services

Currently, Medicare Part B pays for imaging services pursuant to the physician professional cost component, the malpractice costs, and the practice expenses. Practice expenses are resources used in furnishing the services (i.e., rent, personnel costs, equipment costs, etc.). The OIG will review whether the Medicare payments for practice expenses "reflect the expenses incurred and whether the utilization rates reflect industry practices." Furthermore, the OIG will review providers of portable x-ray services with unusual claim patterns.

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October 11, 2010

OIG 2011 Work Plan: Evaluation and Management Services

In 2009, Medicare spent nearly one fifth of its Part B payments on Evaluation and Management (E&M) Services. Providers are responsible for ensuring proper coding when submitting their claims. The OIG will review the E&M claims that have been submitted to determine if coding patterns vary by provider. Furthermore, the OIG will examine the "extent of potentially inappropriate payments for E&M services and the consistency of E&M medical review determinations" as a result of receiving multiple claims with identical documentation services. Finally, there will be an evaluation of whether or not the global surgery fee is still appropriate since the global surgery period's inception in 1992.

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October 8, 2010

OIG 2011 Work Plan: Hospices

The OIG will review hospice services in connection with nursing facilities. According to the Work Plan, "in a recent report, OIG found that 82 percent of hospice claims for beneficiaries in nursing facilities did not meet Medicare coverage requirements." As a result, the OIG will look closely to nursing facilities that utilize hospice care. Furthermore, the OIG will examine the business relationships between hospices and nursing facilities "and assess the marketing practices and materials of hospices associated with high utilization patterns." Additionally, the OIG will look at the services provided by both hospices and nursing facilities to hospice beneficiaries residing in nursing facilities to determine the extent to which the two entities coordinate care, service, and payment arrangements.

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October 7, 2010

OIG 2011 Work Plan: Home Health Agencies

The OIG will examine a number of Home Health Agency (HHA) issues, a number of which are provided in this entry. The OIG will scrutinize payments made under Part B's HHA prospective payments. The Social Security Act requires that all services provided under a plan of care of an HHA be paid to the HHA, including payment for services and supplies provided under arrangements by outside suppliers. The OIG will "identify Part B payments to outside suppliers for services and medical supplies that are included in the HHA prospective payment and examine the adequacy of controls established to prevent inappropriate Part B payments for services and medical supplies." Furthermore, the OIG will review HHA billing practices, specifically for the appropriate location of the services provided as payments to HHAs have nearly doubled between 2000 and 2008. Finally, there will be a review of the CMS enrollment process of HHAs to ensure proper enrollment and that those entities enrolled as HHAs are, in fact, HHAs (and not durable medical equipment suppliers, for example).

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October 6, 2010

OIG 2011 Work Plan: Hospitals

The OIG will review a number of payment systems including, but not limited to, capital payments, the provider-based status payments, the inpatient prospective payment system, excessive Medicare payments, Medicare disproportionate share payments, duplicate graduate medical education payments, payments for diagnostic radiology services in emergency departments, and compliance with the Medicare conditions of participation (CoP) for intensity modulated and image-guided radiation therapy (IMRT) services. With respect to each of these areas, the OIG will review the following:

• Capital Payments - Whether the capital payments--those reimbursements for equipment and facilities--to hospitals are appropriate. Currently, the methodology for determining the capital prospective rate is found at 42 CFR 412.308.
• Provider-Based Status for Inpatient and Outpatient Facilities - Typically, those hospitals that receive a "provider-based status" may receive higher reimbursement when they include the costs of a provider-based entity on their cost reports. The OIG will examine the appropriateness of this designation and the impact it has on the Medicare system.
• Hospital Payments for Nonphysician Outpatient Services Under the Inpatient Prospective Payment System (IPPS) - Because of the significant number of improper claims submissions, the OIG will review the appropriateness of payments for nonphysician outpatient services provided to beneficiaries shortly before or during Medicare Part A-covered stays at acute care hospitals. Typically, the IPPS payments cover all of the operating costs for inpatient stays and there should be no additional claims submitted under Part B for nonphysician services.
• Medicare Excessive Payments - Historically, the OIG has identified excessive payments when looking at claims with unusually high payments. The OIG will continue to monitor unusually high payments as well as reviewing the effectiveness of the claims processing edits used to identify excessive payments.
• Medicare Disproportionate Share Payments - The number of disproportionate share payments have been increasing. The OIG will review whether these payments have been appropriate alongside the total amounts of uncompensated care costs that hospitals incur.
• Duplicate Graduate Medical Education payments - CMS's Intern and Resident Information System (IRIS) provides that a resident may not be counted as more than one full-time employee. The OIG will review whether or not duplicate graduate medical education payments have been claimed and which claim is appropriate.
• Payments for Diagnostic Radiology Services in Hospital Emergency Departments - The OIG will determine the appropriateness of Part B claims and medical records for interpretations and reports of diagnostic radiology services performed in hospital emergency departments.
• Hospitals' Compliance with Medicare CoP for IMRT Services - The OIG will review hospitals' compliance with the quality and safety requirements of the IMRT services as outlined in 42 CFR 482.26.

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October 6, 2010

OIG Releases Report: "Review of Michigan's Reporting Fund Recoveries for State Medicaid Programs on the Form CMS-64 for the First Quarter"

In an audit of Michigan's Medicaid program, the Office of Inspector General (OIG) found that Michigan's Medicaid agency did not report on the CMS-64 $3 million in over payments--a direct violation of Section 1903(d)(2) of the Social Security Act (Act). Of that $3 million not reported, $2,198,100 was the federal government's share. The audit revealed that Michigan's Medicaid did not report the overpayments because it did not have a system in place to ensure that the overpayments were reported on the CMS-64.

Pursuant to 42 CFR § 433.312(a)(2), the State agency "... must refund the Federal share of overpayments at the end of the 60-day period following discovery ... whether or not the State has recovered the overpayment from the provider." The regulation provides an exception only when the State is unable to recover the overpayment amount because the provider is bankrupt or out of business (42 CFR § 433.318).

To ensure proper reporting in the future, the OIG recommends Michigan Medicaid take the following actions:
• Include the unreported $3 million payments on the CMS-64 and refund the $2,198,100 to the federal government, and
• Develop and implement internal controls to properly report and refund the federal share of identified Medicaid overpayments on the CMS-64 form.

Michigan's Medicaid agreed with these recommendations and has already reported the $3 million on the CMS-64.

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October 5, 2010

OIG 2011 Work Plan

On October 4, 2010, the OIG released its Work Plan for the FY of 2011. Throughout the week, we will be posting on various aspects of the Work Plan pertinent to our clients and our readers in the following areas:
• Hospitals
• Home Health Agencies
• Hospices
• Evaluation and Management Services
• Imaging Services
• Diagnostic Testing
• Sleep Testing
• Medical Equipment and Supplies
• Medicare Audits and the Appeals Processes

Check back every day for updates!

Continue reading "OIG 2011 Work Plan" »

October 4, 2010

Arkansas Supreme Court Upholds Lower Court's Decision Rejecting Economic Credentialing for Staff Privileges

On September 30, 2010, the Arkansas Supreme Court held that Baptist Health, a private, charitable, nonprofit corporation, may not impose an Economic Conflict of Interest Policy (Policy). In this case, "the Policy mandates the denial of initial and renewed professional staff appointments or clinical privileges at any Baptist hospital to any practitioner who, directly or indirectly, acquires or holds an ownership interest in a competing hospital." The Court held that this Policy's "motive was to make patients choose between their doctors and Baptist" and agreed with the lower court that it was improper. Cecil B. Wilson, M.D., President of the American Medical Association, released a statement in which she stated the Court "preserve[d] the patient-physician relationship and promotes competition in Arkansas by permanently prohibiting an economic credentialing policy..." She continued to state that "the primary factor in credentialing physicians should be competency, not economic factors unrelated to quality."

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October 1, 2010

Novartis Pharmaceuticals Settles with DOJ for $420 Million

Novartis Pharmaceuticals, a US subsidiary of a Swiss pharmaceutical group Novartis, settled with the US Department of Justice (DOJ) for $420 million for allegations of the off-label promotion of Trileptal, submitting false claims because of the unlawful marketing, and paying kickbacks to health care professionals inducing them to prescribe Trileptal and five other drugs. The Food and Drug Administration (FDA) approved Trileptal as an anti-epileptic drug, but did not approve it for psychiatric or pain uses. Novartis Pharmaceuticals allegedly marketed Trileptal for unapproved or off-label uses and agreed to plead guilty to a misdemeanor and pay $185 million in fines. Further, Novartis Pharmaceuticals allegedly submitted claims to government healthcare programs as a result of that marketing, in addition to paying kickbacks to healthcare professionals in exchange for prescribing Trileptal and five other drugs--Diovan, Zelnorm, Sandostatin, Exforge, and Tekturna--agreeing to pay $237.5 million in fines. As a result of this settlement, Novartis Pharmaceuticals signed a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services, Office of Inspector General stating it would be "subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of this CIA and subject to monetary penalties for less significant breaches." This is yet another reminder that the federal government is cracking down on fraud and abuse violations in all facets of the healthcare industry. Healthcare providers should continue to be aware of the changes in the law and monitor their practices to ensure compliance with all evolving regulations.

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