OIG Issues Updated Provider Self-Disclosure Protocol

An enlarged photo of a word "fraud"The Department of Health and Human Services Office of Inspector General this week issued an updated provider self-disclosure protocol (SDP) that gives healthcare providers guidance on how to disclose potential fraud, avoid prosecution, and mitigate potential penalties under its civil money penalty authority.

OIG first published the protocol in 1998 as a way for healthcare providers to disclose potential fraud involving federal healthcare programs. Since then, the OIG has resolved more than 800 disclosures resulting in more than $280 million in recoveries to federal healthcare programs.

Some of the most common issues providers disclose include:

  • Billing for items or services furnished by excluded individuals
  • Evaluation and management services and DRG upcoding
  • Duplicate billing
  • Alteration or falsification of records
  • Kickbacks and Stark Law violations

The SDP is organized to provide guidance on what submissions should include for specific types of conduct—improper claims, employment of, or contracting with, excluded individuals and violations of the anti-kickback statute.

Some new features include:

  • Minimum settlement amounts of at least $50,000 for self-disclosures involving kickback-related submissions and $10,000 for all other disclosures to reflect minimum civil monetary penalty (CMP) amounts for such violations.
  • Suspension of the obligation to report overpayments under section 1128J of the Social Security Act Waiver of statute of limitations defenses by disclosing parties.
  • Calculation of damages within 90 days of initial self-disclosure (formerly within 90 days of OIG’s acceptance of submission).
  • Minimum sample size of 100 units and the use of a mean point estimate for billing-related disclosures.
  • Express clarification that manufacturers may use the SDP if at least one of OIG’s CMP authorities is implicated by the conduct.
  • Express recognition of the various damage calculation methodologies that OIG has often used in resolving different types of disclosures (e.g., different damage calculation methodologies for excluded individual disclosures versus kickback-related disclosures)

OIG said it will issue further guidance after CMS issues the 60-day overpayment final rule.

Click here to read the full document.

HHS OIG issues unusual fraud alert on physician-owned distributorships

Surgeons performing a surgery

The HHS Office of Inspector General issued a Special Fraud Alert on March 26 focusing on specific attributes of physician-owned distributorships (PODs) that  it believes “produce substantial fraud and abuse risk and pose dangers to patient safety.”

PODs, as defined by the OIG, are “physician-owned entities that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician owners in procedures the physician owners perform on their own patients at hospitals or ambulatory surgery centers.”

Because the OIG views PODs as “inherently suspect under the anti-kickback statute,” one should not be lulled into thinking that just because the Fraud Alert focused principally on implantable medical devices that the OIG is only interested in those types of arrangements. Nothing could be further from the truth because the OIG stated that the principle set forth in the Fraud Alert “would apply when evaluating arrangements involving other types of physician-owned entities.

The OIG listed eight characteristics of suspect POD’s that are likely to attract more scrutiny:

  1. The size of the investment offered to each investment varies with the expected or actual volume or value of devices used by the physician.
  2. Distributions are not made in proportion to ownership interest, or physician-owners pay different prices for their ownership interests, because of the expected or actual volume or value of devices used by the physicians.
  3. Physician-owners condition their referrals to hospitals or ASCs on their purchase of the POD’s devices through coercion or promises, for example, by stating or implying they will perform surgeries or refer patients elsewhere if a hospital or an ASC does not purchase devices from the POD, by promising or implying they will move surgeries to the hospital or ASC if it purchases devices from the POD, or by requiring a hospital or an ASC to enter into an exclusive purchase arrangement with the POD.
  4. Physician-owners are required, pressured, or actively encouraged to refer, recommend, or arrange for the purchase of the devices sold by the POD or, conversely, are threatened with, or experience, negative repercussions (e.g., decreased distributions, required divestiture) for failing to use the POD’s devices for their patients.
  5. The POD retains the right to repurchase a physician-owner’s interest for the physician’s failure or inability (through relocation, retirement, or otherwise) to refer, recommend, or arrange for the purchase of the POD’s devices.
  6. The POD is a shell entity that does not conduct appropriate product evaluations, maintain or manage sufficient inventory in its own facility, or employ or otherwise contract with personnel necessary for operations.
  7. The POD does not maintain continuous oversight of all distribution functions.
  8. When a hospital or an ASC requires physicians to disclose conflicts of interest, the POD’s physician-owners either fail to inform the hospital or ASC of, or actively conceal through misrepresentations, their ownership interest in the POD.

Physicians who are invested in PODs or other joint ventures should have those arrangements reviewed by legal counsel to ensure that they continue to remain compliant with state and federal laws.

For the complete fraud alert, click here.

GAO finds Medicare Advantage plans overpaid $5.1 billion

A photo of dollar bills falling from skyJust last month, I wrote about how the government was falling short in its job to collect hundreds of millions of dollars in Medicaid overpayments. That news came from a report released by the Department of Health and Human Services’ Office of the Inspector General.

The saga continues with another report from the Government Accountability Office which finds that insurers that offer Medicare Advantage plans received up to $5.1 billion in overpayments between 2010 and 2012. These plans are offered by private companies that contract with Medicare to provide both Part A and Part B benefits.

The GAO audit is critical of how the Centers for Medicare and Medicaid Services (CMS) calculated payment rates for Medicare Advantage plans.  It notes that the plans are incentivized to adjust the risk scores for private Medicare beneficiaries versus public fee-for-service patients.

The report found the following:

GAO estimated that cumulative Medicare Advantage (MA) risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in Medicare fee-for-service (FFS). For 2011, GAO estimated that differences in diagnostic coding resulted in risk scores that were 4.6 to 5.3 percent higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. This upward trend continued for 2012, with estimated risk scores 4.9 to 6.4 percent higher.

While CMS did not change its risk score adjustment methodology for 2013, agency officials said they may revisit their methodology for future years.

Click here to read the full report.


Government fails to collect $226 million in Medicaid overpayments

A surgical clamp holding money.The government is falling short in its job to collect hundreds of millions of dollars in Medicaid overpayments, according to a report released this month by the Department of Health and Human Services’ Office of the Inspector General.

The job of collections falls to the Centers for Medicare and Medicaid Services and according to the report there’s about $226 million in Medicaid overpayments that have gone to 11 states.

As of December 2012, CMS reported collecting $987,481,600 of the $1,213,085,167 in overpayments issued between fiscal years 2000 and 2009, according to the report. “However, CMS had not collected the remaining $225,603,567 because it had not always proceeded with the collection process in a timely manner,” the report notes.

OIG made the following recommendations:

  • Collect the remaining $225,603,567 that is due the federal government.
  • Review and address delays in resolving OIG audit recommendations and promptly pursue corrective actions.
  • Maintain adequate documentation to support the collection of overpayments in accordance with OMB Circular A-50 and CMS standard operating procedures.
  • Educate the states about their responsibility to report overpayments on the correct line of the CMS-64 to improve oversight of the reporting process.

In its response, CMS said it failed to collect some overpayments because additional review of the claims was needed, according to the report.

States affected are: Indiana, Illinois, Kansas, Louisiana, Missouri, New Jersey, Oregon and Pennsylvania. CMS is working to collect overpayments to Medicaid providers in Florida, New York and Massachusetts.

Click here to read the entire report.


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