Medicare Compliance & Reimbursement

Latest report has a new look and offers insight into the agency’s top targets.

Since 2022, the HHS Office of Inspector General (OIG) has issued 30 reports that target Medicare Advantage compliance, nine specifically in the last year. And a new release suggests OIG’s increasing interest in managed care is only going to get more intense.

Context: The OIG outlines fraudulent and abusive behavior that impacts federal healthcare programs in its Semiannual Report to Congress over a specific time period. The agency’s most recent report, which was released on June 3, focuses on incidents, enforcement, and takedowns between Oct 1, 2023, and March 31, 2024. Though opioid abuse and cybersecurity have been popular targets on the national watchdog’s to-do list of late, OIG has ramped up its enforcement of Managed Care Organizations (MCOs) — and for good reason, it says.

“OIG scrutinizes all corners of the Medicare and Medicaid programs, with a focus on promoting sound financial stewardship, ensuring access to high-quality and safe care, and holding wrongdoers accountable,” explains Inspector General Christie A. Grimm in the report. “Oversight of managed care — a rapidly changing sector with significant emerging risks — continues to be a priority.”

Grimm continued, “In this reporting period, OIG identified risks to both funds and enrollees. OIG continued to find that some Medicare Advantage plans are receiving higher payments than they should because they submit data that make plan enrollees appear sicker than they are.”

Factor In These Mid-Year Changes

Though OIG does offer an overview of the entire fiscal year, the Semiannual Report focuses on a six-month snapshot of enforcement activity. However, the latest report may look a little different than past iterations as the agency has opted to streamline the document. OIG has aligned this Semiannual Report with its Top Management and Performance Challenges Facing HHS (TMC) report for 2023, focusing on these five areas of concern:

1. Safeguarding Public Health: OIG expounds on enforcement in two problem zones here, behavioral health and public health.

2. Ensuring the Financial Integrity of HHS Programs: The agency looks specifically at improper payments in this category.

3. Improving Outcomes in Medicare and Medicaid: Nursing home quality and safety are reviewed over this six-month period.

4. Protecting People Served by HHS Programs: OIG recounts enforcement in two categories in this area, the health and safety of children and Medicare enrollee abuse and neglect.

5. Securing Data and Technology: The agency breaks down its cyber enforcement activity related to data loss in various federal programs.

OIG also highlights its accomplishments in other areas with short overviews including: recommendations to federal agencies; whistleblower retaliation; safe harbors; audit oversight; referrals to prosecutorial partners like the Department of Justice, State Attorneys General, and local prosecutors; and Medicaid Fraud Control Units.

The agency combines certain enforcement data — instead of dividing and describing information more thoroughly as in the past — to offer a more concise view for Congress of its activity, the report indicates. Here’s a breakdown of the numbers from Oct. 1, 2023 to March 31, 2024:

• Audits: The OIG issued 60 audits and 18 evaluations, down from 65 audits and 22 evaluations, during the prior reporting period.
• Recoveries and receivables: The agency identified $2.76 billion it expects to recoup. In the last Semiannual Report, OIG listed its expected total recoveries at $3.4 billion, previously showing the split at $3.16 billion for investigative recoveries and $283 million through audits.
• Civil and criminal actions: The federal watchdog brought civil and criminal actions against 712 individuals. During the previous reporting period from April 1, 2023 to Sept. 30, 2023, OIG levied criminal actions against 362 individuals and entities and civil actions against 422.
• Exclusions: The feds excluded 1,795 “bad actors” from federal healthcare programs, a whopping jump from the 750 individuals and entities excluded in the last reporting timeframe.

Check Out These Top Cases

The OIG’s enforcement actions over the six-month time period are diverse and run the gamut from false claims charges to opioid abuse issues to cases of Medicare beneficiary neglect. Here’s a brief look at three cases on the OIG’s radar.

FCA and Stark violations: Providers engaging in referral scams remain in the OIG's enforcement crosshairs.

An Indianapolis healthcare organization, Community Health Network, Inc., agreed to settle False Claims Act (FCA) and Physician Self-Referral Law (Stark) with the DOJ and OIG. “Community knowingly recruited hundreds of local physicians, including cardiovascular specialists, neurosurgeons, and breast surgeons, by paying them salaries that were significantly higher than — sometimes as much as double — what they received in their private practice,” the report says. “Community did so to benefit from the physicians’ lucrative downstream referrals. Additionally, Community awarded financial bonuses to physicians who referred a target number of patients to the network.”

Community entered into a five-year corporate integrity contract with the feds and agreed to pay $345 million to settle the false claims debt.

Opioid drug scam: Providers continue to learn the hard way that prescription schemes involving controlled substances are a ticket to fines and exclusion.

Lewisburg, Tennessee-based physician Mark Murphy and his wife Jennifer Murphy were convicted of drug distribution, fraud, and kickback crimes. The Murphys “conspired to unlawfully dispense and distribute controlled substances, including Fentanyl and Oxycodone, through prescriptions that were not issued for legitimate medical purposes,” according to the report.

They were convicted of conspiracy to distribute controlled substances and healthcare fraud. They were sentenced to 20 years in prison and required to pay $52 million to the feds. The Murphys were also hit with a 70-year exclusion from federal healthcare programs.

Patient neglect and abuse: Diagnosis codes can indicate more than a medical diagnosis. “OIG found that 30,258 Medicare claims for services provided in 2019 and 2020 contained diagnosis codes that indicated the treatment of injuries potentially caused by abuse or neglect of Medicare enrollees,” the report says. In fact, OIG goes further in an infographic, suggesting that “91 percent of Medicare claims with injury diagnosis contained evidence of potential neglect or abuse.”

The information comes from an auxiliary report OIG published from audit findings and investigating diagnoses codes.