This fall edition of the Semiannual Report to Congress covers OIG activities from April 2018 through September 2018. Historically, about 80 percent of OIG's resources are directed to work related to Medicare and Medicaid. This is mirrored in the organization and content of the report.
The steps the Centers for Medicare & Medicaid Services (CMS) has taken to address terminated drug utilization in Medicare Part D were not entirely effective and, as a result, CMS continued to accept some prescription drug event (PDE) data for terminated drugs in calendar years (CYs) 2014 and 2015. Although CMS has made improvements to prevent terminated drug utilization in Part D, it accepted PDE data totaling $31.9 million in gross drug costs for 3,705 terminated drugs in CYs 2014 and 2015. CMS did not compare the information on termination dates in its quarterly Medicaid drug rebate files with the Food and Drug Administration's (FDA) file, did not investigate the discrepancies that existed between these two data sources, and did not update its system edits in a timely manner.
When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act (the Act) mandates that OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP-based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would make this substitution only if the ASP for a drug exceeded the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.
The Office of Inspector General's (OIG) work planning process is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available.
Here are the top challenges in HHS, as identified by the Office of Inspector General
State Medicaid agencies and their contractors maintain and process health information for millions of beneficiaries. Prior OIG reviews have identified vulnerabilities in States' information systems and controls-vulnerabilities that could have resulted in unauthorized disclosure of protected health information (PHI). States must be prepared to respond to breaches to limit potential harm, such as identity theft and fraudulent billing.
Ohio made capitation payments totaling $90.5 million on behalf of deceased beneficiaries. We confirmed that all beneficiaries associated with the 100 capitation payments in our stratified random sample were deceased. Ohio properly recovered 37 of these capitation payments.
The Patient Protection and Affordable Care Act (ACA) established marketplaces to allow individuals and small businesses to shop for health insurance in all 50 States and the District of Columbia. The Centers for Medicare & Medicaid Services (CMS) operates the Federal marketplace and is responsible for reviewing, approving, and generating financial assistance payments (i.e., advance premium tax credits and advance cost-sharing reductions) for the Federal and State-based marketplaces. During the 2014 benefit year, CMS used an interim process for approving financial assistance payments. We previously reviewed CMS’s internal controls under its interim process to ensure the accuracy of aggregate financial assistance payments and determined that the controls were not effective.
In 2016, OIG called attention to significant growth in spending for compounded drugs (customized medications tailored to meet the needs of individual patients). Specifically, OIG found that Medicare Part D spending for compounded drugs grew by 625 percent from 2006 to 2015 and spending for topical compounded drugs-such as creams, gels, and ointments to relieve pain-grew at an even faster pace.
When Congress established average sales price (ASP) as the basis for Medicare Part B drug reimbursement, it also provided a mechanism for monitoring market prices and limiting potentially excessive payment amounts. The Social Security Act mandates that OIG compare ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would only make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.
The OIG has updated its work plan
See Updated Work Plan
Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: Top Unimplemented Recommendations
OIG is committed to ensuring that beneficiaries receive quality care and to safeguarding the hospice benefit. The agency has completed extensive work on the hospice program, including numerous evaluations and audits. OIG has also conducted criminal and civil investigations of hospice providers, leading to the conviction of individuals, monetary penalties, and civil False Claims Act settlements.
Testimony of Gloria L. Jarmon, Deputy Inspector General for Audit Services, Office of Inspector General, U.S. Department of Health and Human Services: House Committee on Ways and Means Subcommittee on Oversight: Combating Fraud in Medicare: A Strategy for Success
The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 directs OIG to monitor the appropriateness of Medicare payments for items and services—including durable medical equipment (DME)—provided during stays not covered by Medicare, called “noncovered stays,” in skilled nursing facilities (SNFs). CMS requires facilities to provide DME as a standard part of nursing care, and does not permit separate Medicare payment for DME except when Medicaid only nursing facilities serve as beneficiary homes.
The Department of Health and Human Services Office of Inspector General, along with our state and federal law enforcement partners, participated in the largest health care fraud takedown in history in June 2018. More than 600 defendants in 58 federal districts were charged with participating in fraud schemes involving about $2 billion in losses to Medicare and Medicaid. Since the last takedown, OIG also issued exclusion notices to 587 doctors, nurses, and other providers based on conduct related to opioid diversion and abuse.
The opioid crisis was recently declared a public health emergency. In 2016, more than 42,000 opioid-related overdose deaths occurred in the United States—115 deaths per day. This data brief is part of a larger strategy by OIG to fight the opioid crisis and protect beneficiaries from prescription drug misuse and abuse. This data brief provides 2017 data on the extent to which Medicare Part D beneficiaries receive extreme amounts of opioids or appear to be doctor shopping and compares these data to OIG’s previous analysis of 2016. It also identifies prescribers who have questionable opioid prescribing.
The Medicaid program helped provide health care to an estimated 73 million people in fiscal 2017 at a cost of about $596 billion. This joint federal and state program continues to grow, and remains on our high risk list due to concerns about the adequacy of federal oversight and the program's vulnerability to fraud.
Medicare paid a total of $17.6 million in telehealth payments in 2015, compared with $61,302 in 2001. Medicare telehealth payments include a professional fee, paid to the practitioner performing the service at a distant site, and an originating-site fee, paid to the facility where the beneficiary receives the service. A Medicare Payment Advisory Commission study of 2009 claims found that Medicare professional fee claims without associated claims for originating-site facility fees were more likely to be associated with unallowable telehealth payments.
Recent increases in prescription drug prices have drawn the attention of Congress, made headlines in major media outlets, and raised concerns in Government agencies that reimburse for these drugs. Some studies also have shown that certain therapeutic classes of drugs—i.e., groups of drugs that treat specific conditions such as diabetes and heart disease—are becoming more expensive. Drugs in these therapeutic classes are typically maintenance drugs, which means they are usually prescribed for chronic conditions. Therefore, increasing costs for these drugs may have a long-term financial impact on Part D and its beneficiaries.
Drug diversion, counterfeiting, and the importation of unapproved drugs may result in potentially dangerous drugs entering the drug supply chain, posing a threat to public health and safety. To enhance the security of this supply chain, the Drug Supply Chain Security Act (DSCSA) requires trading partners in the drug supply chain to create a record of each drug product transaction. The FDA can then use such records to investigate suspect and illegitimate drug products and potential diversion.
In the 3-year period we examined, federal agencies obligated about $27 billion in funding to organizations that provide preventive, reproductive, and diagnostic health care services in the United States or abroad. These include:
This portfolio presents an overview of program vulnerabilities identified in prior Office of Inspector General audits, evaluations, investigations, and legal actions related to chiropractic services in the Medicare program. It consolidates the findings and issues identified in that work and discusses recommendations from prior reports that have not been implemented or have been implemented ineffectively. In addition, this portfolio provides information to help the Centers for Medicare & Medicaid Services understand the need for effective controls over chiropractic services and offers recommendations to help Medicare prevent fraud, waste, and abuse related to those services.
On February 7, 2018, a panel of experts from across the Department of Health and Human Services discussed workable, holistic solutions that States can use to protect the health and safety of residents living in a group home setting.
For the Medicare Advantage (MA) program, CMS contracts with private insurance companies, known as MA organizations (MAOs), to provide Medicare coverage for 18.6 million beneficiaries. In fiscal year 2016, MA expenses reached $200 billion. In 2012, CMS began collecting detailed information from MAOs regarding each service provided to MA beneficiaries. This information is known as MA encounter data. These data must be accurate for CMS to review the medical care that beneficiaries are receiving and use the data to increase payments to MAOs for beneficiaries in poorer health. Ensuring the completeness, validity, and timeliness of the MA encounter data is also critical to safeguard program integrity and to ensure that MA beneficiaries receive needed medical care.
New York did not always determine Medicaid eligibility for newly eligible beneficiaries in accordance with Federal and State requirements. In our sample of 130 beneficiaries, New York correctly determined eligibility for 90 beneficiaries.
Tennessee did not always stop making capitation payments after a beneficiary's death, despite its efforts to identify and recover any unallowable payments. Of the 120 capitation payments in our random sample selected from payments for beneficiaries whose dates of death (DODs) preceded the payment dates, Tennessee recovered 43 prior to the start of our audit, and 13 were not recoverable.
Georgia made capitation payments on behalf of beneficiaries who were assigned multiple Medicaid identification (ID) numbers. Of the 100 beneficiary matches in our sample, Georgia correctly claimed reimbursement for capitation payments on behalf of 28. However, Georgia incorrectly claimed multiple capitation payments that totaled $201,561 ($132,765 Federal share) on behalf of the remaining 72.
Texas did not fully comply with Federal Medicaid requirements for billing manufacturers for some rebates for pharmacy drugs dispensed to managed-care organization enrollees. Texas properly processed claims for rebates in most instances; however, some claims were bypassed in the Drug Rebate Analysis and Management System and were not processed for rebate. The bypassed claims occurred during the rebate billing for the second quarters of 2012 and 2014. These claims were bypassed because they were loaded during the rebate invoicing process and Texas did not perform the required invoice recalculation to ensure they were applied to the current quarter. The bypassed claims resulted in 220,336 claim lines that were not invoiced for rebate. The rebates associated with these claims total $7.8 million ($4.4 million Federal share).
Drug Companies that Provide Free Drugs to Federal Health Care Program Beneficiaries Impacted by Caring Voice Coalition, Inc.'s Decision Not to Provide Patient Assistance in 2018
Manufacturers with rebate agreements are required to report all of their covered outpatient drugs to the Medicaid Drug Rebate Program (Medicaid rebate program). CMS calculates rebate amounts using manufacturer reported pricing and classification data. Congress asked OIG to evaluate the accuracy of manufacturer reported data in the Medicaid rebate program, and CMS's oversight of that data. The Food and Drug Administration's (FDA's) marketing categories, which also are manufacturer reported, can be used to help determine whether a drug is classified as an innovator, e.g., brand name, or noninnovator, e.g., generic, product, for the purposes of calculating Medicaid rebates. Innovator products are generally subject to higher base rebate amounts. Manufacturers are required to pay an additional, inflation adjusted rebate if a drug's price increases faster than inflation. When information provided by drug manufacturers is incorrect or missing, State Medicaid agencies may not be able to collect all appropriate rebates.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) enacted clinician payment reforms designed to promote quality and value of care. These reforms, known as the Quality Payment Program (QPP), are a significant shift in how Medicare calculates compensation for clinicians and require CMS to develop a complex system for measuring, reporting, and scoring the value and quality of care. The first performance year began on January 1, 2017.
A limited number of prescription drugs—generally those that are injected or infused in physicians' offices or hospital outpatient settings—are covered under Medicare Part B. With certain exceptions, Part B does not cover drugs that are self-administered by patients, including drugs administered by self-injection. However, in a small number of cases, self-administered drugs that typically would be used in situations not covered under Part B are being included by CMS when setting payment amounts.
The Social Security Act mandates that OIG compares ASPs with average manufacturer prices (AMPs). If OIG finds that the ASP for a drug exceeds the AMP by a certain percentage (currently 5 percent), the Act directs the Secretary of Health and Human Services to substitute the ASP-based payment amount with a lower calculated rate. Through regulation, CMS outlined that it would make this substitution only if the ASP for a drug exceeds the AMP by 5 percent in the 2 previous quarters or 3 of the previous 4 quarters.
In an earlier report, OIG found that a rebate program for Part B drugs could have resulted in at least $2.7 billion in rebates (both basic rebate and inflation-indexed rebate segments) in 2011. OIG conducted this current review after receiving a congressional request asking us to update our earlier rebate calculations using only the inflation-indexed portion of the Medicaid rebate methodology.
This audit is part of the ongoing efforts of the Office of Inspector General (OIG) to detect and combat elder abuse. We are communicating these preliminary results because of the importance of detecting and combating elder abuse. Also, according to Government Auditing Standards, "early communication to those charged with governance or management may be important because of their relative significance and the urgency for corrective follow-up action."
This report fulfills for 2017 the annual reporting mandate from the Patient Protection and Affordable Care Act (ACA) for 2017. The ACA requires OIG to conduct a study of the extent to which formularies used by Medicare Part D plans include drugs commonly used by full benefit dual eligible individuals (i.e., individuals who are eligible for both Medicare and full Medicaid benefits). These individuals generally get drug coverage through Medicare Part D. Pursuant to the ACA, OIG must annually issue a report with recommendations as appropriate. This is the seventh report the OIG has produced to meet this mandate.
This memorandum report presents performance data for the Senior Medicare Patrol (SMP) projects, which receive grants from ACL to recruit and train retired professionals and other senior citizens to recognize and report instances or patterns of health care fraud. OIG has collected these performance data since 1997.
he Health Information Technology for Economic and Clinical Health Act established the Medicare and Medicaid electronic health record (EHR) incentive programs to promote the adoption of EHRs and to improve health care quality, safety, and efficiency through the promotion of health information technology and electronic health information exchange. As an incentive for using certified EHR technology, the Federal Government is making payments to eligible professionals (EPs) and hospitals that attest to the “meaningful use” of EHRs. To receive an incentive payment, EPs attest that they meet program requirements by self-reporting data through the Centers for Medicare & Medicaid Services’ (CMS) online system. he Health Information Technology for Economic and Clinical Health Act established the Medicare and Medicaid electronic health record (EHR) incentive programs to promote the adoption of EHRs and to improve health care quality, safety, and efficiency through the promotion of health information technology and electronic health information exchange. As an incentive for using certified EHR technology, the Federal Government is making payments to eligible professionals (EPs) and hospitals that attest to the “meaningful use” of EHRs. To receive an incentive payment, EPs attest that they meet program requirements by self-reporting data through the Centers for Medicare & Medicaid Services’ (CMS) online system.
This spring edition of the Semiannual Report to Congress covers OIG activities from October 2016 through March 2017. Historically, about 80 percent of OIG's resources are directed to work related to Medicare and Medicaid. This is mirrored in the organization and content of the report.
The Department of Health and Human Services (HHS) OIG is the designated Federal agency that oversees State Medicaid Fraud Control Units (MFCUs or Units). This MFCU Fiscal Year (FY) 2016 Annual Report highlights statistical achievements from the investigations and prosecutions the 50 MFCUs conducted for FYs 2012 through 2016. The report also identifies beneficial practices noted in OIG onsite review reports.
The Office of Inspector General (OIG) must review the Department of Health and Human Services (HHS) compliance with the Improper Payments Information Act of 2002 (IPIA; P.L. No. 107-300) as amended by the Improper Payments Elimination and Recovery Act of 2010 (P.L. No. 111-204) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA; P.L. No. 112-248). Ernst & Young (EY), LLP, under its contract with the HHS OIG, audited the fiscal year 2016 HHS improper payment information reported in the Agency Financial Report (AFR) to determine compliance with IPIA and related guidance from the Office of Management and Budget (OMB).The Office of Inspector General (OIG) must review the Department of Health and Human Services (HHS) compliance with the Improper Payments Information Act of 2002 (IPIA; P.L. No. 107-300) as amended by the Improper Payments Elimination and Recovery Act of 2010 (P.L. No. 111-204) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA; P.L. No. 112-248). Ernst & Young (EY), LLP, under its contract with the HHS OIG, audited the fiscal year 2016 HHS improper payment information reported in the Agency Financial Report (AFR) to determine compliance with IPIA and related guidance from the Office of Management and Budget (OMB).
Data from the 2015 Medicare EHR Program show that relatively few patients electronically access their health information when offered the ability to do so. Patients GAO interviewed described primarily accessing health information before or after a health care encounter, such as reviewing the results of a laboratory test or sharing information with another provider.
The Compendium of Unimplemented Recommendations (Compendium) is a core publication of the Department of Health and Human Services (HHS or Department) Office of Inspector General (OIG). In this edition, we focus on the top 25 unimplemented recommendations that, in OIG͛s view, would most positively affect HHS programs in terms of cost savings, program effectiveness and efficiency, and quality improvements and should, therefore, be prioritized for implementation. The recommendations come from OIG audits and evaluations performed pursuant to the Inspector General Act of 1978 (IG Act), as amended. The Appendix of the Compendium includes a broader list of significant unimplemented recommendations from OIG.
In FY 2016, State Medicaid Fraud Control Units (MFCUs) were responsible for 1,721 indictments, 1,564 convictions, and $1.8 billion in criminal and civil recoveries, as reported to OIG.
OIG posts a Drug Pricing and Reimbursement Web portfolio on its website. This portfolio, in development since last summer, pulls together the HHS OIG’s body of work since 2010 as well as other relevant items that relate to drug pricing and reimbursement in HHS programs. The portfolio features planned work, completed reports, industry guidance, and enforcement actions.
See Federal Register
Federal payments for catastrophic coverage exceeded $33 billion in 2015, which is more than triple the amount paid in 2010. Spending for high-price drugs contributed significantly to this growth. By 2015, high-price drugs were responsible for almost two-thirds of the total drug spending in catastrophic coverage.
CMS has made significant progress towards implementing the QPP. Although many milestones remain before the QPP payment adjustments in 2019, OIG identified two vulnerabilities that are critical for CMS to address in 2017, because of their potential impact on the program’s success: (1) providing sufficient guidance and technical assistance to ensure that clinicians are ready to participate in the QPP, and (2) developing IT systems to support data reporting, scoring, and payment adjustment.
We found that the number of inpatient stays decreased and the number of outpatient stays increased since the implementation of the 2-midnight policy. Further, short inpatient stays decreased more than long outpatient stays. Despite these changes, vulnerabilities still exist.
The 2016 Year in Review highlights significant work in our continuing battle against fraud, waste, and abuse in Department of Health and Human Services programs, including Medicare and Medicaid.
The Work Plan includes projects planned in each of the Department's major entities: the Centers for Medicare & Medicaid Services; the public health agencies; the Administrations for Children & Families; and Administration on Aging. Information is also provided on projects related to issues that cut across departmental programs, including State and local government use of Federal funds, as well as the functional areas of the Office of the Secretary of Health & Human Services (HHS).
See Work Plan
Investigations have revealed abuse and neglect by PCS attendants. OIG hopes that its recommendations to the Centers for Medicare and Medicaid Services will ensure that people in need of PCS services are not at risk of abuse or neglect.
The Arizona Department of Health Services, Division of Licensing Services, Bureau of Long-Term Care Licensing (State agency), did not always verify nursing homes' correction of deficiencies identified during surveys in calendar year (CY) 2014 in accordance with Federal requirements.See Report
CMS had policies and procedures to ensure that payments were not made for Medicare services ostensibly rendered to deceased individuals. These policies and procedures generally ensured that CMS did not make improper payments when its data systems indicated at the time a claim was processed that the individual had died before the claimed date of service.
CMS's policies and procedures generally prevented improper payments in cases when CMS's data systems identified a beneficiary as incarcerated at the time that a claim was processed. However, CMS's policies and procedures did not allow CMS to detect and recoup improper payments on a postpayment basis when CMS's data systems did not identify a beneficiary as incarcerated at the time that a claim was processed.
The Centers for Medicare & Medicaid Services (CMS) had policies and procedures to ensure that payments were not made for Medicare services rendered to unlawfully present beneficiaries in accordance with Federal requirements, but it did not always follow those policies and procedures.
OIG Video report on recent findings in Connecticut and Massachusetts where group homes for the disabled did not report critical incidences to state authorities.
In keeping with the flexibility MACs have to make coverage decisions, MACs reported using a variety of information sources on drug uses to assist in making coverage determinations.
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