In Fall 2014, the Office of the Inspector General (OIG) submitted a semi-annual report to Congress evaluating the effectiveness of the OIG’s effort to combat fraud, waste, and abuse in more than one hundred Department of Health and Human Services (HHS) programs. The report detailed the OIG’s activities for the 6-month period between April 1 – September 30, 2014 and used that data to recommend legislative solutions aimed at saving Medicare billions of dollars and to promote future improvements in regulation efforts.
During fiscal year 2014, the OIG reported projected recoveries of more than $4.9 billion, comprised of close to $900 million in audit recovery and about $4 billion in investigative recovery. The OIG also reported 971 total criminal actions and 533 civil actions, including false claims, civil monetary settlements, administrative recoveries, and other crimes against HHS programs. There were also 4,017 individuals and entities excluded from participation in Federal health care programs for 2014. 2 In FY 2014, the Medicare Fraud Strike Force, as part of HHS and the Department of Justice (DOJ), filed more than 200 criminal charges and actions, resulting in a projected $441 million in recovery. The perpetrators were charged with various health care-fraud crimes, including conspiracy to commit health care fraud, anti-kickback statute violations, and money laundering.
Medicare and Medi-Cal Waste and Improper Use
Medicare and Medi-Cal programs enable individuals to create waste and improper payments when the programs do not efficiently prevent, discourage, identify, or report inappropriate and abusive billing by providers and suppliers. The OIG identified certain areas that produce high waste and overpayment, including:
Medicare Part D Questionable Utilization Patterns;
Overuse of copayment coupons;
Limited compliance with Medicare’s documentation requirements; and
Improper payments for evaluation and management services.
Recommendations to Congress
The OIG, in conjunction with the Congressional Budget Office, estimates that implementing the following recommendations will save close to $15.7 billion in FY 2015:
Increase accuracy levels of monthly Medicare Part C capitated payments;
Ensure that the Medi-Cal daily rate for State-operated developmental centers meets the Federal requirement that payment for services be consistent with efficiency and economy;
Adopt new calculation of volume-weighted average sales price for Medicare Part B drugs that allows for more precise reimbursements from CMS; and
Implement stronger follow-up procedures for employers who fail to respond to data requests by exercising civil monetary penalty authority and seeking necessary legislative authority for mandatory data reporting.
What Does This Mean for Skilled Nursing Facilities (SNFs)?
Medicare incorrectly paid hospital inpatient claims subject to its post-acute care transfer policy, resulting in overpayments totaling approximately $19.5 million over 4 years. CMS advised that the largest vulnerability of FY 2013 for SNFs were beneficiaries receiving diabetic supplies above the maximum allowance. By following the OIG’s recommendations and adapting administrative and clinical operations to reflect best practices, SNFs can increase the likelihood that they will not be the focus of a Medicare Fraud Strike Force investigation and will not be subject to fraud, waste, or abuse implications.
The OIG’s Semi-Annual Report to Congress places a great deal of pressure on SNFs to operate efficiently and effectively. Establishing a thorough compliance program is essential to adhering to regulatory standards, which promote SNFs to:
Fulfill the facility’s legal duty and guarantee that no false or inaccurate claims are being submitted;
Demonstrate the facility’s commitment to accountable corporate behavior;
Increase the prevention, identification, and correction of unlawful and unethical activities;
Encourage staff to report possible problems and allow for appropriate internal inquiry; and
Minimize financial loss to both the facility and the government