HHS Recommendations to Reduce Fraud, Waste and Abuse Take Aim at CMS and Increased Oversight of Compounded Drugs

The Health and Human Services Office of Inspector General (“OIG”) released its annual report entitled Solutions to Reduce Fraud, Waste, and Abuse in HHS Programs: OIG’s Top Recommendations. The report specifically contains the top 25 unimplemented recommendations that would “most positively” affect cost savings, program effectiveness and efficiency, and public health and safety. The report notes that the recommendations were compiled from audit and evaluation reports. Perhaps unsurprisingly, 18 of the 25 recommendations are directed to Centers for Medicare and Medicaid Services (“CMS”) programs.

Medicare Parts A & B

The OIG notes that its recommendations are directed to reducing improper payments, preventing and deterring fraud, and encouraging economical payment policies. The specific recommendations are as follows.

CMS should analyze the potential impacts of counting time spent as an outpatient toward the 3-night requirement for skilled nursing facility services so that beneficiaries receiving similar hospital care have similar access to these services.

CMS should implement the statutory mandate requiring surety bonds for home health agencies that enroll in Medicare, and should consider implementing it for other providers.

CMS should continue to ensure that medical device-specific information is included on claim forms and require hospitals to use certain condition codes for reporting device replacement procedures.

CMS should seek statutory authority to establish additional remedies for hospices with poor performance.

CMS should seek legislative authority to comprehensively reform the hospital wage index system.

CMS should reevaluate the inpatient rehabilitation facility (“IRF”) payment system, including making changes necessary to more closely align IRF payment rates and costs.

CMS should periodically review claims for certain sleep apnea device supplies, and take remedial action for suppliers that consistently bill improperly.

CMS should consider seeking legislative authority to implement least costly alternative policies for Part B drugs under appropriate circumstances.

Medicare Parts C & D

In connection with Medicare Parts C & D, the OIG notes that a top priority is curbing the opioid epidemic through enforcement actions, and through identifying “inappropriate prescribers and beneficiaries at risk of abuse or overdose.” The specific recommendations are:

CMS should collect comprehensive data from plan sponsors to improve its oversight of their efforts to identify and investigate potential fraud and abuse.

CMS should require Medicare Advantage plans to include ordering and referring provider identifiers in their encounter data.

CMS should strengthen oversight of Part D payments for compounded topical drugs to prevent fraud, waste and abuse while maintaining appropriate access.

Medicaid

Here, the OIG notes that it has identified “substantial” improper payments to providers and on behalf of ineligible individuals. In addition, it is concerned with the “completeness and reliability” of national Medicaid data. The Medicaid recommendations are as follows.

CMS should ensure that national Medicaid data are complete, accurate and timely.

CMS and the Health Resources and Services Administration (“HRSA”) should ensure that States can pay correctly for 340B-purchased drugs, by requiring claim-level methods to identify 340B drugs and sharing the official 340B ceiling prices.

CMS should require States to either enroll personal care services (“PCS”) attendants as providers, or require PCS attendants to register with their State Medicaid agencies and assign each attendant a unique identifier.

CMS should facilitate State Medicaid agencies’ efforts to screen new and existing providers by ensuring the accessibility and quality of Medicare’s enrollment data.

CMS should improve managed care organizations’ identification and referral of cases of suspected fraud or abuse.

CMS should develop policies and procedures to improve the timeliness of recovering Medicaid overpayments and recover uncollected amounts identified by OIG’s audits.

CMS should re-evaluate the effect of the healthcare-related tax safe-harbor threshold and the associated 75/75 requirement to determine whether modifications are needed.

The OIG also had several other recommendations for other agencies, including one for each of the Administration for Children and Families (treatment planning and medication monitoring for children prescribed psychotropic medications), the Food and Drug Administration (ensuring effective and timely processes related to food facility inspections and food recalls), and the National Institutes of Health (requiring security training and planning for principal investigators and entities before granting them access to genomic data). The OIG also provided two for the Indian Health Service (“IHS”) (implement quality-focused compliance program for IHS hospitals, and assess continuity of operations programs for all IHS facilities for a range of disasters).

Many of these recommendations would require legislative or regulatory changes to accomplish, and compliance professionals should be on the alert for that in the coming months.