On August 1, 2012 the Centers for Medicare and Medicaid Services (CMS) released a Provider Compliance Interactive Map. The map is an interactive online tool that allows users to view state-by-state contact information and websites for contractors and other Medicare resources. The map is intended to simplify access to contact information for providers in each state.
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In the recently issued Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule for 2013, CMS is soliciting comments regarding policy changes that could be made on the issue of inpatient versus outpatient admission. (To view the CMS factsheet please click here.) CMS is seeking comments on potential changes which could provide some clarity for providers and hospitals regarding inpatient versus outpatient status for purposes of Medicare payment. Comments are due by September 4, 2012.
Currently, when a patient presents to the hospital in a short-stay case, the hospital must decide whether to admit the patient as an inpatient or treat him/her as an outpatient. This decision is not always clear in light of existing Medicare guidance, and the wrong choice can have severe repercussions for the hospital. If the provider orders an inpatient stay, and later, the Recovery Audit Contract (RAC) concludes that the care should have been provided at an outpatient level, the care is deemed not medically reasonable and necessary. Under the current system for reimbursement, the hospital is not reimbursed under Part B for the outpatient services provided unless the hospital undertakes an appeal of the claim denial and is successful before an Administrative Law Judge (ALJ).
Hospitals, in an effort to mitigate costs, err on the side of outpatient care. CMS notes that this practice has doubled in the last four years and that it has a detrimental effect on Medicare beneficiaries.
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On July 17, 2012 the United States Attorney’s Office for the Southern District of New York issued a press release announcing the arrest of 48 individuals in what the release calls the largest single prescription drug diversion scheme ever charged at one time. The result of an organized effort by nearly a dozen state and federal agencies, the government has charged the defendants with operating a massive fraud scheme which diverted half a billion dollars’ worth of prescription drugs dispensed to Medicaid patients in the New York City area.
The government alleges the defendants participated in a scheme to buy prescription drugs from patients, to whom the drugs were legitimately dispensed, and then sell them up a chain of buyers where the drugs eventually ended up in the hands of large scale wholesalers. The defendants are alleged to have fraudulently repackaged and labeled the diverted drugs to make them appear as if they were new, before they sold them to unwitting end-users.. In some cases these diverted prescriptions included HIV/AIDS drugs that were expired and potentially no longer medically effective, yet were still dispensed to unknowing patients.
Because many of the patients who sold the drugs received them through a Medicare or Medicaid benefit, and many of the patients who received the drugs from illegal wholesalers used Medicare or Medicaid benefits to obtain the drugs, the press release is calling the alleged fraudulent scheme a double fraud on the health care system. Medicare and Medicaid essentially paid for these drugs twice, once for the legitimate patient who sold their medication, and then once for the end-user, who obtained the drugs from the wholesalers.
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CGI has added a new issue to its approved issues list for Region B:
Outpatient Bevacizumab (Avastin) services: Bevacizumab (Avastin) represents 10mg per unit and should be billed one (1) unit for every 10mg per patient. Claims for J9035 should be submitted so that the billed units represent the administered units, not the total number of milligrams.
HealthDataInsights has posted a new issue to its approved issues list:
Multi-use vial wastage: Herceptin (Trastuzumab). Multi-use vials are not subject to payment for discarded amounts of drug or biological. Per, the manufacturer label, J9355 Injection, Trastuzumab, 10mg (Herceptin) is only supplied in a multi-use vial. Providers should only bill the units associated with the dose administered to the patient.
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On June 28, 2012 the Office of Inspector General (OIG) for the Department of Health and Human Services issued a report to the Centers for Medicare and Medicaid Services (CMS) that addresses instances of duplicative payments for prescription drugs for hospice beneficiaries. The report includes the results of an audit conducted by the OIG which identified instances where Part D payments were made for prescription drugs for hospice care, when the drugs were already covered under Part A hospice coverage, resulting in duplicate payments for the same drugs.
Hospice care provided under Part A has an all-inclusive per diem which covers all aspects of daily hospice care, including drugs specifically for that care. Some drugs may be used for both hospice and non-hospice care for the same beneficiary. Part A per diem coverage could pay for a drug used for hospice care, while Part D could pay for the same type of drug for the same beneficiary if used for non-hospice care. For instance, a beneficiary could receive pain relief medication for hospice care under Part A. If that beneficiary were to fracture a bone, they could receive the same type of pain relief medication that they already receive for hospice care, but if it is for pain relief associated with the broken bone it could be covered under Part D. The OIG audit and report examine drugs that have been paid for under Part D, but were already paid for under Part A hospice per diem.
The OIG audit, conducted during calendar year 2009, found that beneficiaries paid $3,835,557 in copayments on drugs through the Part D program that should have been covered under Part A per diem payments. During the audit period, Part D sponsors for five plans were contacted by the OIG. All five indicated that they had no procedures in place to identify drugs that should have been covered under Part A per diem payments.
Three recommendations were made to CMS in the report, two of which CMS concurred with:
1. Educate sponsors, hospices, and pharmacies that it is inappropriate for Medicare Part D to pay for drugs related to hospice beneficiaries’ terminal illnesses.
2. Perform oversight to ensure that Part D is not paying for drugs that Medicare has already covered under the per diem payments made to hospice organizations.
3. Require sponsors to develop controls that prevent Part D from paying for drugs that are already covered under per diem payments.
CMS did not concur with the recommendation that it perform oversight, stating that it requires conclusive evidence that there is an issue before making payment adjustments, and that implementing an oversight program would be costly and difficult. The OIG responded, stating that their audit work proved that duplicate payments were made and CMS should do more to address the issue.
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On July 6, 2012, the Centers for Medicare and Medicaid Services (CMS) issued a 765 page proposed rule addressing changes to the physician fee schedule, payments for Part B drugs, and other Medicare Part B payment policies. (To view the proposed rule please click here .) Of particular interest to providers, CMS implemented face-to-face requirements as a condition of payment for certain durable medical equipment (DME) items.
Face-to-face encounters are required for those items that:
1) currently require a written order prior to delivery per instructions in [CMS’] Program Integrity Manual; 2) cost more than $1,000; 3) [CMS believes] are particularly susceptible to fraud, waste, and abuse; and 4) [CMS believes are] vulnerable to fraud, waste, and abuse based on reports of the HHS Office of Inspector General, Government Accountability Office, or other oversight entities.
CMS explained that it added the face-to-face requirement for certain DMEs because, after empirical study, billed DMEs of the above four characteristics often failed to meet coverage criteria.
The proposed rules are expected to be formally published July 30, 2012. Until then, the public is free to offer commentary.
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The Centers for Medicare and Medicaid Services (CMS) will begin accepting applications on August 1, 2012 for Advance Payment Model Accountable Care Organizations (ACOs). Organizations applying for the Advance Payment Model would begin participation January 1, 2013.
Organizations participating in the Advance Payment Model would receive an advance payment on the shared savings they are expected to earn. Participating ACOs earn three types of payments:
• Upfront, fixed payment.
• Upfront, variable payment based on the number of its preliminarily prospectively assigned beneficiaries.
• A monthly payment of varying amount based on the size of the ACO, also based on the number of its preliminarily prospectively assigned beneficiaries.
The Advanced Payment ACO model is designed to test whether providing an advance on shared savings (as detailed above) will increase health organization participation in the Shared Savings Program, and to determine whether those advance payments can lead to better ACO care for beneficiaries and more savings for the Medicare program.
The Advanced Payment Model is available to participants in the Shared Savings Program, and allows organizations to receive advance payments that will be repaid from thee future shared savings they earn.
More information on Accountable Care Organizations and eligibility for the Shared Savings Program can be found here.
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Members of the United States House Energy and Commerce Committee sent a request on June 26, 2012 to the Government Accountability Office (GAO) requesting a study of redundancy in Centers for Medicare and Medicaid Services (CMS) contractor audits. The request included four specific questions that, at a minimum, the committee wants studied:
1. What process does CMS use to determine whether the contractors’ audit criteria and methodologies are valid, clear, and consistent?
2. How does CMS coordinate among these contractors to ensure that their interactions with providers are not duplicative? Is there any evidence of providers being subjected to multiple overlapping audits on the same topic? If so, how frequently does this occur? Is there any justification for a single provider being audited by multiple contractors at the same time?
3. What are the reasons for requesting that similar information be submitted to multiple contractors? Are there steps CMS is taking to limit duplicative audits, while still ensuring contractors have the tools necessary to pursue program integrity efforts?
4. Does CMS have a strategic plan to coordinate and oversee all of its audit activities and, if so, how is that plan implemented and overseen?
The request asks that all Centers for Medicare and Medicaid Services contractors be studied, including Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs), and Comprehensive Error Rate Testing Review contractors (CERTs).
The request asks that the GAO, “undertake a study that focuses on coordination among contractor efforts and CMS efforts to oversee these contractors to ensure that they are working efficiently and effectively while guaranteeing that beneficiaries are receiving care to which they are entitled.”
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The United States Department of Justice (“DOJ”) announced yesterday that a Detroit-area resident, Louisa Thompson, plead guilty on June 20, 2012, to one count of criminal conspiracy to commit health care fraud in the Eastern District of Michigan federal court.
The Health Care Fraud Prevention and Enforcement Action Team (HEAT) task force, a DOJ and U.S. Department of Health and Human Services (HHS) multi-agency joint venture, headed the investigation of Ms. Thompson. The HEAT task force, which is an initiative of the federal Medicare Fraud Strike Force, uses data analysis and community policing to detect health care fraud perpetrators who steal billions of dollars from the federal government.
The task force discovered that since 2006, Ms. Thompson had billed Medicare for psychotherapy services through two companies, TGW Medical Inc. and Caldwell Thompson Manor Inc., despite these services having never been performed, or performed by unlicensed staff. Ms. Thompson has yet to be sentenced in the case, and faces up to 10 years imprisonment and a $250,000 fine.
Based on recent Medicare Fraud Task Force activity, it appears the HEAT task force is targeting psychological and psychotherapy service providers aggressively, both for criminal prosecution as well as for civil actions to recover money that Medicare and Medicaid has paid. The government’s most-used tool in civil health care cases is the False Claims Act.
The False Claims Act (FCA) was drafted in1893 and was originally intended to prohibit and prevent fraudulent claims against the government during the Civil War. Its purpose was to force government contractors to deliver promised materials, hold them accountable if they did not, and deter fraudulent activity. Under the FCA a qui tam relator (whistleblower) could bring suit on behalf of the United States, and be rewarded with a percentage of the government’s recovery.
In the late-1980s the federal government began using the FCA to pursue fraud in the federal health care programs. In recent years the government has relied on the FCA to combat fraud and abuse in the healthcare arena for conduct that did not reach the standards for criminal prosecution. The penalties for violation of the FCA can be up to $11,000 per false claim as well as three times the damage to the government.
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On June 8, 2012, Robert Vito, Regional Inspector General for Evaluation and Inspections at the U.S. Department of Health and Human Services (HHS), Office of Inspector General (OIG), testified before the House Energy and Commerce Committee: Subcommittee on Oversight and Investigations. The testimony focused on the current OIG assessment of Medicare contractors’ efforts to counteract fraud at present and in the near future. The testimony focused on Zone Program Integrity Coordinators (ZPIC), who audit and investigate claims and providers enrolled in Medicare Part A and B, and Medicare Drug Integrity Contractors (MEDIC), who focus on Medicare Part C and D.
The testimony revealed that OIG reviews over the last 10 years have found recurring issues with Medicare contractor performance–issues that continue to persist. These issues include:
• Limited results from proactive data analysis.
• Difficulties in obtaining the data needed to detect fraud.
• Inaccurate and inconsistent data reported by contractors.
• Limited use by CMS of contractor-reported fraud and abuse activity data in evaluating contractor performance and investigating variability across contractors.
• Lack of program vulnerability identification and resolution.
One major area for concern for the OIG is proactive data analysis. Medicare contractors, like ZPICs and MEDICs, have continued to pursue a “pay and chase” model of benefit integrity activity, rather than the proactive approach that HHS would like to implement. Proactive analysis would potentially identify fraudulent or otherwise inappropriate claims before they are paid rather than after. Proactive and early identification of fraud and inappropriate payments accounted for only 7 percent of ZPIC investigations, according to a 2011 OIG report. The vast majority of ZPIC and MEDIC audit and investigative activity is based upon “reactive methods” like complaints from other sources.
Vito’s testimony also indicated inaccuracies and lack of uniformity in ZPIC and MEDIC data. System issues, reporting errors, and differing interpretations of fraud terms and definitions have caused drastically different reporting results from different Medicare contractors. In one case, one ZPIC reported 7 times more investigations originating from external sources than the other. This inconsistency prevented OIG from making a conclusive assessment of ZPIC and MEDIC activities.
OIG review found that despite the requirement that Medicare benefit integrity contractors identify and report systemic vulnerabilities in the Medicare program, some contractors are not reporting any vulnerabilities. Vulnerabilities are defined by CMS as fraud, waste, or abuse identified through analysis of Medicare data. In 2009 a total of 62 program vulnerabilities were reported to CMS. Only 21 vulnerabilities included an estimated monetary impact as required. These 21 vulnerabilities totaled an estimated monetary impact of $1.2 billion. As of January 2011, CMS had taken no action on 75% of the vulnerabilities reported in 2009.
The testimony recommended the following continuing actions to improve benefit integrity contractor performance:
• Oversee proactive identification of fraud.
• Provide timely data access.
• Improve accuracy of contractor-reported fraud activity data.
• Assess variability in performance across contractors.
• Ensure program vulnerability identification and resolution.
• Improve overpayment identification and collection.
The OIG will also continue to review Medicare benefit integrity issues, which include continuing evaluations of overpayments and Medicare debt collection, and examining the activities of MACs and RACs. Reviews of new enrollment procedures and prepayment identification of inappropriate claims will also begin.
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