Medicare Compliance & Reimbursement

OIG won’t let go of its mission to reform SNF therapy payments.

You could face increased scrutiny of your Medicare payments, as well as your use of your electronic health record (EHR) copy-paste feature, if the HHS Office of Inspector General (OIG) gets its way.

The OIG recently released its April 2016 Compendium of Unimplemented Recommendations, which is essentially a list of especially significant recommendations that HHS has failed to act on. Many of the recommendations require specific action from the Centers for Medicare & Medicaid Services (CMS).

In the Compendium, the OIG covers a wide array of HHS programs, including Medicare, Medicaid, the Affordable Care Act (ACA) marketplaces, and health IT, says Connor Duffy, associate attorney with Robinson & Cole LLP. OIG highlighted and detailed 25 unimplemented recommendations from its past reports.

OIG Takes a Hard Look at Medicare

Pay attention: The OIG had a variety of unimplemented recommendations for Medicare Parts A and B. Specifically, the OIG said that CMS should:

• Exempt the reduced expenditures as a result of lower outpatient prospective payment system (PPS) payment rates from budget neutrality adjustments for ambulatory surgical center (ASC) approved procedures;
• Establish a hospital transfer payment policy for early discharges to hospice care;
• Ensure that all claims with exception codes are processed consistently and pursuant to federal requirements;
• Enhance efforts to identify adverse events;
• Reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays;
• Modify how coinsurance is calculated for outpatient services received at Critical Access Hospitals (CAHs); and
• Consider pursuing rulemaking to expand the price substitution policy.

What’s more: Medicare Parts C and D didn’t escape the OIG’s crosshairs either. For these programs, the OIG charged that CMS should:

• Implement policies and procedures to notify Medicare Advantage (MA) organizations of unlawful presence information;
• Restrict certain beneficiaries to a limited number of pharmacies or prescribers; and
• Require plan sponsors to report all potential fraud and abuse to CMS and/or the Medicare Drug Integrity Contractor.

SNF Therapy Services Reimbursement Comes Under Fire

One of the more significant bombshells in the OIG’s report for Medicare Parts A and B impacts skilled nursing facilities (SNFs). In the Compendium, the OIG once again charged that CMS should change the way Medicare pays SNFs for therapy services. Also, the OIG wants CMS to reduce payment rates for therapy.

“The OIG found that $52 billion in costs could have been reduced if higher-category RUGs had not been used, and then recommended that CMS figure out a way to evaluate how Medicare payment rates for therapy could be adjusted and change the rate of therapy payments,” explained CMS Compliance Group Inc. The OIG pointed out in its September 2015 report that SNFs billed for ultra-high therapy considerably more in the sampled timeframe even though resident characteristics didn’t change much.

Impact: “Payment reform could save Medicare billions of dollars and encourage SNFs to provide services that are better aligned with beneficiaries’ care needs,” the OIG stated. “Long-standing concerns regarding Medicare’s SNF payment system … focus on SNF billing, the method of paying for therapy, and the extent to which Medicare payments exceed SNFs’ costs.”

In response, CMS said that although it agreed with the OIG’s recommendation, it required additional statutory authority to address whether Medicare payment rates for therapy should be reduced. As for the recommendation to change the payment method for therapy, CMS said that it’s conducting “a project to study and evaluate SNF therapy payment options.”

EHRs Pose Fraud Risks, OIG Charges

With an elephant-like memory, the OIG dredged up its complaints dating back to 2013, when it found that hospitals’ safeguards against fraud were lacking in their EHRs. In December 2013 the OIG found that of the hospitals receiving EHR Medicare Incentive payments, even the hospitals that had policies regarding the use of the copy-paste feature in EHR technology seemed to have limited control over its use.

Although CMS has made efforts to monitor fraud through payment audits, and the ONC has offered technical assistance, the OIG stated that CMS and ONC have not yet developed a comprehensive plan to jointly address fraud vulnerabilities in EHR technology, Duffy notes. Specifically, the Compendium points to the use of copy-paste in EHR systems.

Problem: The OIG found that only about one-quarter of hospitals had policies for using the copy-paste feature in EHR systems. If used, the OIG warns this feature “could pose a fraud vulnerability.” Overall, however, the OIG found that nearly all hospitals with EHRs had RTI International-recommended audit functions in place, but they may not be using those functions to the full extent.

Beware: With subsidies under programs like CMS’ Meaningful Use (soon to become the “Advancing Care Information” program) spurring widespread adoption of health IT and EHRs, hospitals and other healthcare providers should remain cautious that the OIG will be watching for the susceptibility of new technology to fraud, Duffy warns.

Medicare FFS Error Rates Under Scrutiny, Too

Also, the OIG’s Compendium covers unimplemented recommendations involving Medicaid, human services programs, food and drug safety, improper payments information, and ACA marketplaces. For instance, the OIG wants HHS to reduce the Medicare fee-for-service (FFS) program’s error rates to below 10 percent.

Key unimplemented recommendations for CMS regarding Medicaid include performing utilization reviews of second-generation antipsychotic drugs prescribed to children, as well as limiting state Medicaid durable medical equipment prosthetics, orthotics, and supplies (DMEPOS) reimbursement rates to Medicare program rates.

Additionally, the OIG wants CMS to monitor state-submitted managed care encounter data and implement the national Transformed Medicaid Statistical Information System to ensure that Medicaid data are complete, accurate, and timely. CMS should also require each state Medicaid agency to report all terminated providers, OIG recommended.

Finally, the OIG wants CMS to create regulations to standardize states’ personal care services laws by creating or expanding federal requirements and issuing operational guidance for claims documentation, beneficiary assessments, plans of care, and supervision of attendants. Currently, there are significant variations in states’ personal care services laws and regulations.

Link: To read the OIG’s Compendium of Unimplemented Recommendations, visit http://oig.hhs.gov/reports-and-publications/compendium/files/compendium2016.pdf. To read the OIG’s September 2015 report, see http://oig.hhs.gov/oei/reports/oei-02-13-00610.pdf. Read the OIG’s December 2013 report at http://oig.hhs.gov/oei/reports/oei-01-11-00570.pdf.