The Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) recently released its Semiannual Report to Congress, as well as its Compendium of Unimplemented Recommendations. The Semiannual report, covering the 6-month period ending September 30, 2012, describes significant problems, abuses, deficiencies, and investigative outcomes relating to the administration of HHS programs and operations that were disclosed during the reporting period. The Compendium describes open recommendations from prior periods that when implemented will save tax dollars and improve programs.
In fiscal year 2012, OIG achieved record-setting monetary and enforcement results and recommended critical actions to improve HHS programs and protect beneficiaries. OIG also expanded its outreach to health care providers and industry by launching new tools and forums for promoting compliance. OIG also continued to capitalize on their partnerships with other law enforcement agencies and HHS colleagues through the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to crack down on those who commit fraud and bilk scarce resources from the Medicare and Medicaid programs. OIG’s HEAT portfolio expanded during this reporting period to include reports on questionable billing trends in community mental health centers, retail pharmacies, and home health agencies.
For FY 2011, the Department reported improper payments totaling more than $64 billion in the Medicare and Medicaid programs’. For FY 2012, OIG reported expected recoveries of about $6.9 billion consisting of $923.8 million in audit receivables and $6 billion in investigative receivables (which includes $1.7 billion in non-HHS investigative receivables resulting from our work in areas such as the States’ shares of Medicaid restitution). OIG also identified about $8.5 billion in savings estimated for FY 2012 as a result of legislative, regulatory, or administrative actions that were supported by our recommendations.
The U.S. Department of Justice (DOJ) similarly touted the government’s healthcare fraud enforcement efforts, announcing the $4.9 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2012. This figure constitutes a record recovery for a single year, eclipsing the previous record by more than $1.7 billion, and brings total recoveries under the False Claims Act since January 2009 to $13.3 billion – which is the largest four-year total in the Justice Department’s history and more than a third of total recoveries since the act was amended 26 years ago in 1986. Housing and mortgage fraud accounted for an unprecedented $1.4 billion.
Most false claims actions are filed under the act’s whistleblower, or qui tam, provisions, which allow private citizens to file suits alleging false claims on behalf of the government. If the United States prevails in the action, the whistleblower, known as a relator, receives up to 30 percent of the recovery. The department saw a record 647 qui tam suits filed last fiscal year and recovered a record $3.3 billion in suits filed by whistleblowers during the same period.
OIG reported FY 2012 exclusions of 3,131 individuals and entities from participation in Federal health care programs; 778 criminal actions against individuals or entities that engaged in crimes against HHS programs; and 367 civil actions, which include false claims and unjust-enrichment lawsuits filed in Federal district court, civil monetary penalties (CMP) settlements, and administrative recoveries related to provider self-disclosure matters.
On April 4, 2012, HHS and DOJ hosted the seventh regional Health Care Fraud Prevention Summit, held in Chicago. The Summits bring together a wide array of Federal, state, and local partners, beneficiaries, providers, and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system. The Chicago Summit focused on the latest technological advancements, including data analytics, now being used to identify, prevent, and prosecute fraud.
During FY 2012, Medicare/Medicaid Strike Force efforts resulted in the filing of charges against 305 individuals or entities, 181 convictions, and $151 million in investigative receivables. For example, on May 2, 2012, over 200 OIG Special Agents, Forensic Examiners and Analysts participated in Medicare Fraud Strike Force operations in 7 cities that resulted in charges against 107 individuals, including doctors, nurses, and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing. The coordinated takedown involved the highest amount of Medicare false billings in a single takedown by the HEAT strike force.
Of interest to our readers, OIG noted several FDA regulatory issues. For example, OIG noted that Medicare Pays Too Much for the Drug Avastin When Used in Treating Wet Age-Related Macular Degeneration. OIG found that for the first quarter of 2010, physicians could purchase Avastin at 53 percent below the average Medicare payment for providing the drug in treating wet age-related macular degeneration (wet AMD) in physician office settings. Wet AMD is a leading cause of vision loss in older people. Wasteful spending has occurred because Medicare does not have a national payment amount for such use of Avastin. Medicare’s payment contractors independently set the payment amounts, which differed as much as 28 percent. CMS set a national payment amount for Avastin but rescinded it in 2009.
OIG also identified a need for Resolving Scientific Disagreements on Regulatory Decisions. OIG reviewed 36 medical device submissions for which FDA’s Center for Devices and Radiological Health (CDRH) had scientific disagreements on regulatory decisions between 2008 and 2010 and found a number of challenges associated with the resolution process. CDRH annually processes about 6,000 submissions for approval of medical devices that require regulatory decisions. Scientific disagreements are defined as being consequential to a regulatory decision where taking one position on an issue would lead to a different decision than taking another position.
CDRH did not start formally tracking such disagreements until 2010. OIG found that CDRH faces broad challenges in identifying and resolving scientific disagreements because of uncertainty about regulatory definitions and processes and staff perceptions about expressing differences of opinion. The nature and resolutions of the 36 disagreements reviewed varied widely. The disagreements often involved multiple issues, and most of their resolutions did not lead directly to the approval or clearance of devices. Most administrative files related to the disagreements contained required documentation, but accountability for file completeness was unclear. Also, not all of CDRH’s managers and reviewers had received training on the new procedures implemented in 2009. OIG recommended that
- FDA define more clearly its requirements for documenting and resolving scientific disagreements,
- train all reviewers and managers on the new policies and procedures for resolving scientific disagreements, and
- more clearly assign accountability for the contents of the administrative files of all submissions
HHS-OIG Compendium
At the beginning of each fiscal year (FY) OIG follows up with HHS and its operating and staff divisions to determine their progress in implementing significant recommendations that were included in the preceding edition of the Compendium and in reports that were issued during the closed fiscal year. This edition of the Compendium updates the status of recommendations made through FY 2011 that were not fully implemented as of December 2012 and represent significant opportunities for action in FY 2013.
Each narrative in the Compendium contains for pertinent reports the open recommendations, background, progress of implementation, report titles, numbers, and issue dates.
Medicare Part A and Part B—Traditional Medicare
- Hospitals—Eliminate or Reduce Medicare Payments for Hospital Bad Debts
- Physicians—Adjust Global Surgery Fees To Reflect the Number of Evaluation and Management Services Actually Being Provided by Physicians
- Medical Equipment—Reduce the Rental Period for Medicare Home Oxygen Equipment
- Hospices—Ensure That Hospice Claims for Beneficiaries in Nursing Homes Comply With Medicare Coverage Requirements
- Independent Diagnostic Testing Facilities—Implement Unannounced Site Visits and Other Actions To Prevent Improper Payments (New).
- Medical Equipment—Ensure That Claims for Lower Limb Prostheses Meet Requirements (New).
Medicare Part C —Medicare Advantage
- Medicare Advantage Payment Amounts—Modify Payments to Medicare Advantage Organizations.
- Medicare Advantage Aggressive Marketing—Ensure That New Enrollees Understand Plan Rules.
Medicare Part D—Prescription Drug Benefit
- CMS—Develop a Comprehensive Safeguard Strategy for Overseeing Part D Prescription Drug Plans.
- Sponsor Data—Ensure the Accuracy of Sponsors’ Cost Estimates in Part D Bids.
- Claims Processing—Ensure the Validity of Prescriber Identifiers on Claims.
- Atypical Antipsychotic Drugs—Ensure That Part D Sponsors Have Information Needed To Make Accurate Coverage and Reimbursement Determinations (New).
Medicaid Reviews
- Prescription Drugs—Develop National Pharmacy Acquisition Cost Data as a Benchmark for Reimbursing Prescription Drugs (New).
- Prescriptions Drugs—Establish a Connection Between the Calculations of Medicaid Drug Reimbursements and Rebates.
- Prescriptions Drug Rebates—Extend the Additional Rebate Payment Provisions for Brand-Name Drugs to Generic Drugs.
- Payments to Public Providers—Limit Medicaid Payments to Costs and Require That Payments Returned by Public Providers Be Used To Offset the Federal Share.
- Improve Medicaid Children’s Utilization of Preventive Screening Services.
Public Health Reviews
- Centers for Disease Control and Prevention—Improve States’ and Localities’ Medical Surge Preparedness for Pandemics.
- Food and Drug Administration—Ethics Oversight—Ensure That Clinical Investigators Disclose All Financial Interests.
- National Institutes of Health—Ethics Oversight—Require NIH Grantee Institutions To Identify, Report, and Address Institutional Financial Conflicts of Interest (New
- Food and Drug Administration Ethics Oversight—Ensure That Clinical Investigators Disclose All Financial Interests
- Safety of Medical Devices—Use Adverse Event Reports To Detect and Address Safety Concerns