Medicare Compliance & Reimbursement

Feds hone in on urine tests, PT, and cardiac device recalls.

OIG continues to hammer away at those who cheat Medicare. With tighter controls and stiffer punishments on the rise, practices shouldn’t expect federal scrutiny to end anytime soon.

Background: In its Semiannual Report to Congress released on June 4, the HHS Office of Inspector General (OIG) disclosed that the first half of fiscal year 2018 was a big one, including major recoveries and savings. The agency recorded audit receivables at $187.5 million, garnered about $1.5 billion in savings, and looked into questionable activity that amounted to around $680 million, noted the report.

“Each day, OIG uses data-driven decision making to combat fraud, waste, and abuse of Federal health care programs and to improve the effectiveness of Department programs,” said Inspector General Daniel R. Levinson. “Our multidisciplinary team of auditors, investigators, evaluators, analysts, and attorneys strategically focuses on fraud prevention, detection, and enforcement efforts.”

Here’s a Rundown of the Numbers

The reporting period, which runs from October 1, 2017 through March 31, 2018, saw some significant financial gains for the feds as well as substantial punishments against offenders. Take a look at the breakdown over the six-month timeframe, according to the Semiannual Report:

• Investigative recoveries. OIG hopes to fully recover $1.46 billion paid out improperly.
• Criminal actions. The agency brought judgments against 424 individuals who executed crimes against HHS programs.
• Civil actions. Over the six months, 349 individuals were found guilty of civil offenses.
• Exclusions. The agency banned 1,588 individuals and/or entities from participating in federal healthcare programs.
• Sanctions. OIG levied 1,678 administrative sanctions over the six months.
• Civil Monetary Penalties. Utilizing the Civil Monetary Penalty Law (CMPL), “OIG concluded cases involving more than $35.5 million in CMPs and assessments,” the release showed.

Consider These Examples

Following is a sampling of a few of the OIG’s recoveries as outlined in the report:

• Urine drug testing: Clinical labs and physician practices were improperly reimbursed around $66.3 million by Medicare for the combination of specimen validity test and urine drug tests that were not deemed medically necessary.

“The improper payments occurred because providers did not follow existing Medicare guidance, and CMS’s system edits were not adequate to prevent payment for specimen validity tests billed in combination with urine drug tests,” indicated the report.

• Outpatient physical therapy: According to the results from a stratified sampling of 300 claims that lacked sufficient documentation and medical necessity, the OIG estimated that outpatient physical therapy attributed to $367 million in improper Medicare payments over a six-month period.

“Sixty-one percent of Medicare claims for outpatient physical therapy services that we reviewed did not comply with Medicare medical necessity, coding, or documentation requirements,” noted the OIG.

• Cardiac device credits: A review of 296 payments to hospitals for recalled cardiac medical devices showed that not one of the claims was in line with Medicare requirements to receive the manufacturer credit.

Some of the onus was on “Medicare contractors incorrectly” paying “hospitals $7.7 million for cardiac device replacement claims rather than the $3.3 million they should have been paid, resulting in potential overpayments of $4.4 million,” the report said. However, “the hospitals did not adjust the claims with the proper condition codes, value codes, or modifiers to reduce payment as required,” which created the issues, suggested the report.

Tip: With all of the OIG recommendations leaning toward further scrutiny, now is the time to take a close look at your Medicare billings and ensure that you are reporting your services correctly. If you haven’t performed a self-audit in a while, make it a priority to perform one so you can move through 2018 and into 2019 with the knowledge that you are coding and billing properly.

“Developing and maintaining an effective compliance plan and promoting transparency in operations will help foster a culture of compliance with relevant fraud and abuse laws,” advise national law firm Saul, Ewing, Arnstein & Lehr, LLP in online analysis of the Semiannual Report.

Resource: To review the Semiannual Report to Congress, visit https://oig.hhs.gov/reports-and-publications/archives/semiannual/2018/sar-spring-2018.pdf.