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Risk Fraud & Compliance

US health oversight agency says COVID-19 fraud, opioid addiction concerns remain high

Melissa D. Berry  Regulatory Intelligence

Melissa D. Berry  Regulatory Intelligence

In its report to Congress, the Health Department's oversight agency said the impact of fraud related to the pandemic remains a source of worry

The U.S. Department of Health and Human Services (HHS) expects to recover $1.37 billion from investigations in the six months prior to March 31, 2021, the HHS Office of Inspector General has reported in its recent semi-annual report to Congress.

Among the report’s findings is that pandemic-related fraud schemes remain a challenge, despite increased prevention, detection, and enforcement actions by law enforcement and the U.S. government. The inspector general’s office said the expected recoveries stem from 221 criminal actions, 272 civil actions, and 1,036 individuals or entities excluded from participation in federal healthcare programs.

Additionally, the Office of Inspector General (OIG) reported it had issued 75 civil audit reports and expects to recover $566 million from its audits. It also identified nearly $920 million in potential savings for HHS from its 228 audit and evaluation recommendations.

Semi-annual report highlights

The OIG found that approximately 911 hospitals had failed to meet Medicare requirements for reporting credits for recalled or prematurely failed cardiac medical devices. As a result, the hospitals received $33 million in potential overpayments. The OIG identified that Medicare contractors made the overpayments because they lack a post-payment review process to ensure hospitals are reporting the manufacturer credits.

The OIG found that the Centers for Medicare and Medicaid Services (CMS) and its contractors failed to use Comprehensive Error Rate Testing (CERT) data to identify “error-prone providers for review and corrective action.” When OIG conducted a review using the data, it identified 100 error-prone providers from the years 2014 to 2017. These error-prone providers had a 60.7% improper payment rate, which is significantly higher than the national average of 11.3% for all Medicare providers during the same time. Medicare made $19.1 billion in fee-for-service payments to these 100 error-prone providers.

The chief executive officer of a Texas-based group of hospice and home health companies was sentenced to 15 years in prison on February 3 for his role in fraudulently enrolling patients in hospice programs. He falsely told thousands of patients with “long-term incurable diseases” that they had less than 6 months to live. He would then enroll them in hospice programs for which they were not qualified in order to increase revenue to his company. Between 2009 and 2018, the CEO and his co-conspirators submitted more than $150 million in false claims for hospice and other healthcare services to Medicare.

The OIG determined that CMS may have paid out as much as $950 million in unallowable advanced premium tax credits in 2018. These credits assist individuals to pay their premiums for health insurance purchased through the Affordable Care Act marketplace. The credits were not allowable because they were made on behalf of plan enrollees who failed to make their required premium payments. In addition, for nine sampled policies, CMS reported inaccurate enrollment data to the Internal Revenue Service. As a result, the IRS could not recoup the credits.

Pandemic-related safety and fraud concerns

The OIG also remains heavily involved with oversight of COVID-19 pandemic relief and recovery efforts. As we have previously reported, the Biden administration recently released a series of policy recommendations to address perceived pharmaceutical supply chain vulnerabilities. Additionally, Christi A. Grimm, principal deputy inspector general for the HHS Office of Inspector General, announced in May that the office was not backing down in the fight fraud, citing top compliance priorities which include the COVID-19 pandemic response, as well as issues concerning the quality of nursing home care and social inequities in access to health services.

OIG has 67 in-process or completed reviews of pandemic-related programs, including a review of infection control and complaint surveys at nursing homes, and it conducted a second survey of the challenges for hospitals in responding to the pandemic. The OIG also worked with nursing homes and emergency medical service providers around the country to help providers report allegations of unsafe practices resulting in COVID-19 exposure, overall quality of care concerns, patient abuse and neglect, as well as healthcare fraud.

The OIG continues to aggressively investigate pandemic-related fraud that “harms individuals and jeopardizes public health efforts.” It has partnered with law enforcement and other government oversight agencies to create a COVID-19 Fraud Enforcement Task Force.

The OIG also alerted the public to fraud schemes related to COVID-19 including telemarketing calls, text messages, social media, and even door-to-door visits to perpetrate COVID-19-related scams. Bad actors would offer COVID-19 tests, COVID-19 vaccine appointments, HHS grants, and Medicare prescription cards in exchange for individuals’ personal information, including Medicare information. The personal information was then used to fraudulently bill federal healthcare programs and commit medical identity theft.

Opioid misuse and addiction treatment

The OIG reported that it had found that during the first eight months of 2020, at least 5,000 Medicare Part D beneficiaries suffered from opioid overdoses every month. It further found that almost 250,000 beneficiaries were prescribed high amounts of opioids. The OIG also reported that individuals with opioid addiction are more likely to contract COVID-19 and suffer complications.

The OIG also surveyed opioid treatment programs to determine what challenges the programs were facing due to the pandemic. The programs identified several challenges, such as their ability to maintain staffing levels, implement and use telehealth systems, obtain treatment medications and personal protective equipment, and provide take-home doses for patients. The OIG also reported on program actions to mitigate these and other challenges.

As an example of this type of fraud, the agency reported that New York physician, Dr. Eugene Gosy, was sentenced to 70 months in prison after he was convicted of conspiracy to distribute controlled substances and healthcare fraud. Dr. Gosy and his employees “issued more prescriptions for controlled substances annually than any other prescriber or prescribing entity in New York State, including hospitals.” They often prescribed controlled substances without conducting a physical examination or in ways that were likely to cause and did cause addiction, and issued prescriptions in dosages and/or combinations that were dangerous to the health and safety of patients.

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