Counsel for HHS-OIG Discusses the Impact of Health Care Reform on Enforcement with Congress

(June 22, 2010):  In his testimony last week before the Health and Oversight Subcommittees of the House Committee on Ways and Means, Lewis Morris, Chief Counsel to the Inspector General (HHS-OIG) of Health and Human Services (HHS), emphasized the increasing speed and intensity of HHS-OIG’s multi-pronged health care fraud enforcement efforts.  Morris’ testimony reinforces the need for Community Mental Health Centers (CMHCs) and Partial Hospitalization Programs (PHPs) to aggressively prepare for a knock on the door from HHS-OIG or one of its many enforcement partners.

Morris highlighted numerous new enforcement tools available under the Patient Protection and Affordable Care Act (PPACA), paying particular attention to innovations in data access and use.  These measures include consolidating and sharing data across agencies, as well as deploying new technology that allows “investigators to complete in a matter of days analysis that used to take months with traditional investigative tools.” 

He further praised the enhanced accountability measures contained in PPACA, such as HHS-OIG’s ability to impose civil monetary penalties for “failing to grant [upon reasonable request] timely access to HHS-OIG for investigations, audits, or evaluations.”  Notably, PPACA Section 6408 provides for a penalty of $15,000 per day for failure to grant access. 

Morris’ testimony also reminded the health care community that:

  • PPACA allows the HHS Secretary to suspend payments to providers or suppliers based on credible evidence of fraud.  At the same time, it expands the types of conduct constituting Federal health care fraud offenses under Title 18.
  • HHS-OIG has improved access to information from entities directly or indirectly involved in providing medical items or services payable by any Federal program.

Perhaps most significantly: 

  • Medicare and Medicaid program integrity contractors (i.e., ZPICs and PSCs) are required to provide performance statistics, “including the number and amount of overpayments recovered, number of fraud referrals, and the return on investment of such activities.” (emphasis added).

While not surprising, it is nonetheless disconcerting that ZPICs and PSCs are essentially being “graded” based on the amount of overpayments recovered,” along with the number of enforcement actions handled and referred to law enforcement.  Based on these performance measures, is there any real difference between ZPICs and RACs?  While RACs may be compensated directly based on the amount of overpayments collected (and ZPICs are not), it is crystal clear that the government’s expectations of ZPICs are quite similar.  Now, more than ever before, it is essential that CMHCs and PHPs implement effective compliance measures.

Should you have any questions regarding these changes, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.

HHS-OIG Reports that Four Types of Errors Accounted For 95% of the Net Improper Medicaid Overpayments

(April 20, 2010): The Department of Health and Human Services, Office of Inspector General (HHS-OIG) recently released its report “HHS-Analysis of Improper Payments Identified During the Payment Error Rate Measurement Program Reviews in 2006 and 2007 (A-06-09-00079).” As set out in the report, four types of medical review errors accounted for 95% of the net improper Medicaid overpayments during 2006 and 2007.  A breakdown of the findings set out in the report is detailed below:

HHS-OIG examined a total of 1,356 medical review errors and 202 data processing errors. 

 Medical Review Errors:

 Of the medical review errors analyzed by HHS-OIG, the agency found that four types accounted for 78% of the errors and 95% of the net improper Medicaid overpayments. The four error types included:

                         Top Four Types of Medical Review Errors

  • Insufficient documentation (37.4%),
  • No documentation (25%),
  • Services that violated State policies  (12.9%), and
  • Medically unnecessary services (2.4%).

 The 1,356 medical review errors included 23 service categories, six of which accounted for 67 percent of the errors and 95 percent of the net improper Medicaid overpayments. The six service categories included:

                         Top Six Types of Service Categories Involved

  • Nursing facilities,
  • Inpatient hospitals,
  • Home and Community-Based Services waivers,
  • Intermediate care facilities for the mentally retarded,
  • Prescribed drugs, and
  • Physician.

 Data Processing Errors:

 Of the 202 data processing errors HHS-OIG analyzed, four types accounted for 78 percent of the errors and 64 percent of the net improper Medicaid overpayments. The four error types included:

  •  Pricing errors,
  • Non-covered services errors,
  • Rate cell errors for managed care claims, and
  • Errors in the logic edits of claim processing systems.

 The 202 data processing errors represented 18 service categories, six of which accounted for nearly 73 percent of the errors and 79 percent of the net improper Medicaid overpayments. The six service categories included:

  •  Inpatient hospitals
  • Nursing facilities,
  • Capitated care,
  • Prescribed drugs,
  • Physicians, and
  • Outpatient hospital.

 Estimated Financial Impact (Federal Only):

 For 2006, CMS estimated that the Federal share of the improper payments paid was $6.6 billion.  This increased considerably, to $18.6 billion in 2007 (Federal share only).  HHS-OIG has recommended that CMS provide States with similar analytical data to help them address these improper payments.

Liles Parker Commentary:

 With the passage of the recent Health Care Reform Bill, CMS has been authorized to expand the RAC program to Medicaid.  Now, more than ever before, it is essential that providers carefully analyze their operations, coding and billing practices in order to ensure that Medicaid billings meet applicable regulatory and statutory requirements.

Should you have any questions regarding these changes, don’t hesitate to contact us.  For a complementary consultation, you may call Robert W. Liles or one of our other attorneys at 1 (800) 475-1906.