With more Americans accessing government healthcare programs like Medicare and Medicaid, oversight agencies are increasing their focus on deterring fraud, waste & abuse in this area
During a keynote speech at the recent Health Care Compliance Association annual compliance institute, Christi Grimm, the Inspector General of the U.S. Department of Health & Human Services, discussed the focus areas for her office and recent healthcare compliance successes.
Grimm observed that this is an “incredibly dynamic time” for the healthcare sector, pointing to the increasing number of individuals enrolled in managed care plans for Medicare and Medicaid, the consolidation of markets, the evolution of value-based care, and the expanding role of “nontraditional players” such as health-technology companies and payer-owned providers.
OIG compliance focus areas
Grimm identified nursing homes as her “top priority” with the focus on providing high-quality care. To that end, the Office of the Inspector General (OIG) has worked to identify compliance weaknesses such as “staffing, infection control, and emergency preparedness.” The OIG has also focused on ensuring that state survey deficiencies are “promptly flagged and remedied” and that “incidents of abuse and neglect” are reported.
Poor nursing home care often leads to increased costs when patients are later hospitalized as a result of previous poor care, Grimm noted, adding that part of the OIG’s plan to improve patient care includes the use of the False Claims Act against nursing homes for the “provision of substandard or worthless services” and the exclusion of nursing homeowners and operators from federal healthcare programs when they “egregiously fail” their residents.
Grimm also discussed the need for a “rigorous compliance focus on financial integrity” in managed care, noting that Medicare Advantage plans now cover “more than 30 million Medicare patients”…
Grimm also discussed the need for a “rigorous compliance focus on financial integrity” in managed care, noting that Medicare Advantage plans now cover “more than 30 million Medicare patients” and is expected to cover 50% of Medicare enrollees soon. Medicaid managed care plans already provide services to nearly 80% of Medicaid recipients.
One major compliance concern for Medicare Advantage plans, however, is the use of risk adjustment, which was traditionally designed to compensate plans for the “increased costs of treating older and sicker beneficiaries” and discourage plans from preferential enrollment of healthier individuals. However, risk adjustment can create financial incentives that drive “upcoding in the severity of diagnoses to garner additional payments.”
Grimm noted the OIG’s examination of 20 insurance companies that received $5 billion in risk adjustment payments in 2017. Although these companies received “more than a half-billion dollars” in risk adjustment payments for patients diagnosed with serious mental illness, no services were provided for these diagnosed conditions, she said.
OIG’s Semiannual Report to Congress
In the OIG’s most recent Semiannual Report to Congress, the OIG reported expected audit recoveries of nearly $1.2 billion and questioned costs of nearly $2.2 billion. The OIG also reported $2.73 billion in expected investigative recoveries from 710 criminal actions and 736 civil actions.
Additionally, the OIG reported the exclusion of 2,332 individuals and entities from federal programs. The OIG’s Semiannual report covers the period from April 1, 2022, through September 30, 2022, and it outlines a three-part strategy to improve nursing home care that focuses on:
- Performance — Understanding what drives nursing home performance and what contributes to poor performance in some nursing homes.
- Residents First — Ensuring that nursing homes prioritize quality of care and quality of life for residents.
- Oversight — Making sure that the state and federal entities responsible for nursing home oversight detect problems quickly and require rapid remediation.
One of the OIG’s enforcement highlights includes the exclusion from federal healthcare programs of the individual who owned seven nursing homes that had already been excluded because they housed more than 800 residents in a single “unsanitary warehouse without proper food, water, or waste facilities” during Hurricane Ida. Seven residents eventually died.
When state inspectors conducted on-site visits of the warehouse during the aftermath of the hurricane, they observed residents sleeping on mattresses near standing water, residents who were undressed or naked, and residents calling for help but “being left alone with full diapers.” During these visits, the now-excluded owner attempted to threaten, intimidate, and interfere with the inspectors.
The OIG report “identified 1,714 providers out of approximately 742,000 whose billing for telehealth services during the first year of the pandemic” posed a high risk to Medicare.
The OIG conducted seven audits on selected diagnosis codes that Medicare Advantage organizations submitted to the Centers for Medicare and Medicaid Services (CMS) for use in its risk adjustment program. It also conducted two audits using all diagnosis codes. CMS pays Medicare Advantage plans a capitated rate per member, and the risk adjustment program allows Medicare Advantage plans to receive a higher capitated rate for individuals who may require higher levels of care because of certain diagnoses.
In those nine audits, the OIG identified significant overpayments in every Medicare Advantage plan with estimated overpayments totaling more than $71.5 million.
The OIG also identified telehealth services as a Medicare program integrity risk. The OIG report “identified 1,714 providers out of approximately 742,000 whose billing for telehealth services during the first year of the pandemic” posed a high risk to Medicare. Each of those providers had “concerning billing” on at least one of the seven measures the OIG developed to indicate fraud, waste, or abuse of telehealth services. The OIG also identified that more than half of those providers belonged to a practice group with at least one other provider whose billing also posed a high risk to Medicare.
The OIG made several recommendations to CMS to reduce the program integrity risks of telehealth services provided to Medicare beneficiaries.