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Print articleOIG Claims Savings and Recoveries of $43 Billion for Fiscal Year 2007 1-10-2008
January, 2008 - James S. Mathis
Savings and expected recoveries of $43 billion were reported by the Department of Health and Human Services Office of the Inspector General (OIG) in its Semiannual Report to Congress on December 14, 2007, for fiscal year 2007 (October 2006 – September 2007). This represents $2.18 billion in investigative recoveries, $1.9 billion in audit recoveries, and an estimated $39 billion in savings accruing from various OIG recommendations – all significant increases from the previous year. In addition, 447 criminal actions and 262 civil actions resulted in the OIG excluding 3,308 individuals and entities from federal healthcare programs for fraud and abuse violations. Highlights of the report include:
CMS requires that inpatient psychiatric facilities submit a single bill for transition stays (i.e., stays beginning before and ending on or after the date on which the facility becomes subject to the inpatient psychiatric facility PPS). The OIG found that 76 percent of sampled claims incorrectly split the beneficiary’s stay into two separate payments periods, creating an estimated $1.83 million in overpayments. Further, 47 percent of Part B mental health services did not meet program requirements due to miscoding, improper documentation, or lack of medical necessity, resulting in $718 million in improper payments in 2003.
Review of Medicare hospices led the OIG to urge CMS to strengthen oversight of these facilities. The OIG found that 46 percent of hospices were cited for at least one health deficiency and 15 percent received repeat citations for the same problem. The OIG recommended that CMS develop federal programs and work with states to provide better oversight of hospice performance, as well as to create alternative enforcement remedies for poor performance in addition to the harsh and rarely-used remedy of termination.
The report also cited the East Tennessee Heart Consultants (ETHC) settlement, in which a practice group of cardiologists agreed to pay more than $2.9 million in fines and accept pretrial diversion for allegedly failing to return overpayments to various payors. Investigation revealed that ETHC had a long-standing policy of failing to return credit balances to the appropriate payor unless the refund was specifically requested, despite the fact that ETHC knew it was not legally entitled to keep those overpayments.
The OIG recommended that CMS require retroactive adjustments of erroneous outpatient outlier payments. CMS makes outlier payments to providers, in addition to the predetermined fixed payment amount, when the cost of care greatly exceeds the average cost of treating comparable conditions or illnesses. In the inpatient context, CMS reviews outlier payments and retroactively adjusts erroneous payments. In the outpatient context, however, outlier payments are considered final and are not reviewed. The OIG estimates $24.4 million in overpayments were paid last year to community mental health centers alone.
As a result of recent reviews of Durable Medical Equipment (DME) payments made under Medicare Part B, the OIG recommended that CMS begin collecting overpayments dating back to 1999, estimated at well over $100 million. Skilled Nursing Facilities (SNFs) in particular could be impacted by this review, since DME services furnished during SNF stays are generally covered by Part A, making any Part B payments to SNFs overpayments. In one example, Midwest Medical Laboratory, Inc. agreed to a $711,000 settlement and five years exclusion for billing Part B for services provided during SNF stays that were already covered by Part A.
The OIG found that 64 percent of Part B services for surgical debridement in 2004 did not meet program requirements due to miscoding and lack of adequate documentation resulting in $64 million in improper payments. In addition, the OIG found that 24 percent of claims for negative wound therapy pumps did not meet coverage criteria, resulting in $27 million in improper payments.
According to the OIG’s most recent findings, independent and hospital-based dialysis facilities can acquire most separately billable End Stage Renal Disease (ESRD) drugs for 7 to 32 percent less than the Medicare reimbursement amounts. Because the OIG encouraged CMS to monitor the reimbursement amounts closely, additional adjustments to reimbursement are anticipated in the future.
The OIG reviewed State Children’s Health Insurance Program (SCHIP) payments in three states and discovered that, in each state, payments had been made to ineligible beneficiaries. In each case, the OIG issued recommendations to the state to help ensure future compliance. In light of these findings it seems likely that the OIG will continue to monitor SCHIP payments and persuade states to monitor eligibility determinations more closely.
The OIG has recently directed much of its attention to fighting Medicare fraud inSouth Florida after discovering extensive abuses, particularly among HIV/AIDS infusion therapy providers. The OIG has now commenced a second phase of the South Florida initiative, aimed at securing criminal convictions of providers engaging in Medicare fraud. Additionally, in March, 2007, the OIG initiated the Intensive Medicare Fraud Strike Task Force, designed to combat Medicare fraud through the use of real-time analysis of Medicare billing data. The clear indication is that the OIG will continue to direct its investigatory attention to this area for the foreseeable future.
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CMS requires that inpatient psychiatric facilities submit a single bill for transition stays (i.e., stays beginning before and ending on or after the date on which the facility becomes subject to the inpatient psychiatric facility PPS). The OIG found that 76 percent of sampled claims incorrectly split the beneficiary’s stay into two separate payments periods, creating an estimated $1.83 million in overpayments. Further, 47 percent of Part B mental health services did not meet program requirements due to miscoding, improper documentation, or lack of medical necessity, resulting in $718 million in improper payments in 2003.
Review of Medicare hospices led the OIG to urge CMS to strengthen oversight of these facilities. The OIG found that 46 percent of hospices were cited for at least one health deficiency and 15 percent received repeat citations for the same problem. The OIG recommended that CMS develop federal programs and work with states to provide better oversight of hospice performance, as well as to create alternative enforcement remedies for poor performance in addition to the harsh and rarely-used remedy of termination.
The report also cited the East Tennessee Heart Consultants (ETHC) settlement, in which a practice group of cardiologists agreed to pay more than $2.9 million in fines and accept pretrial diversion for allegedly failing to return overpayments to various payors. Investigation revealed that ETHC had a long-standing policy of failing to return credit balances to the appropriate payor unless the refund was specifically requested, despite the fact that ETHC knew it was not legally entitled to keep those overpayments.
The OIG recommended that CMS require retroactive adjustments of erroneous outpatient outlier payments. CMS makes outlier payments to providers, in addition to the predetermined fixed payment amount, when the cost of care greatly exceeds the average cost of treating comparable conditions or illnesses. In the inpatient context, CMS reviews outlier payments and retroactively adjusts erroneous payments. In the outpatient context, however, outlier payments are considered final and are not reviewed. The OIG estimates $24.4 million in overpayments were paid last year to community mental health centers alone.
As a result of recent reviews of Durable Medical Equipment (DME) payments made under Medicare Part B, the OIG recommended that CMS begin collecting overpayments dating back to 1999, estimated at well over $100 million. Skilled Nursing Facilities (SNFs) in particular could be impacted by this review, since DME services furnished during SNF stays are generally covered by Part A, making any Part B payments to SNFs overpayments. In one example, Midwest Medical Laboratory, Inc. agreed to a $711,000 settlement and five years exclusion for billing Part B for services provided during SNF stays that were already covered by Part A.
The OIG found that 64 percent of Part B services for surgical debridement in 2004 did not meet program requirements due to miscoding and lack of adequate documentation resulting in $64 million in improper payments. In addition, the OIG found that 24 percent of claims for negative wound therapy pumps did not meet coverage criteria, resulting in $27 million in improper payments.
According to the OIG’s most recent findings, independent and hospital-based dialysis facilities can acquire most separately billable End Stage Renal Disease (ESRD) drugs for 7 to 32 percent less than the Medicare reimbursement amounts. Because the OIG encouraged CMS to monitor the reimbursement amounts closely, additional adjustments to reimbursement are anticipated in the future.
The OIG reviewed State Children’s Health Insurance Program (SCHIP) payments in three states and discovered that, in each state, payments had been made to ineligible beneficiaries. In each case, the OIG issued recommendations to the state to help ensure future compliance. In light of these findings it seems likely that the OIG will continue to monitor SCHIP payments and persuade states to monitor eligibility determinations more closely.
The OIG has recently directed much of its attention to fighting Medicare fraud in
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