Earlier this month, the Office of the Inspector General for the Department of Health and Human Services (“OIG”) published its Semiannual Report to Congress covering the period from October 1, 2016 to March 31, 2017.  The report describes OIG’s work and accomplishments during the 6-month reporting period. Like other OIG reports, including the annual OIG Work Plan, the report gives a good indication of priority areas for OIG and can help guide compliance priorities for providers.  Below are some highlights of the report in the following focus areas:

Enhancing Safety and Quality of Care

• OIG continues to look at whether states are verifying correction of nursing home survey deficiencies.

  • OIG determined that Arizona did not verify correction of over 50% of deficiencies identified in state surveys.   The state’s practice was to accept the nursing homes’ plans of correction as evidence of substantial compliance for less serious deficiencies.

• OIG documented issues and challenges with Indian Health Service (“IHS”) hospitals complying with Medicare standards and limitations with IHS’s quality of care monitoring.

Improving Efficiency of Program Operations

• OIG issued an early implementation review of CMS’s new Quality Payment Program, which attempts to reform Medicare payments by integrating performance-based adjustments or providing incentives for participating in innovative payment models.

  • Critical vulnerabilities that CMS needs to address in 2017 are providing sufficient guidance and technical assistance to clinicians and developing IT systems to handle data reporting, scoring and payment adjustments.

• OIG continued to audit claims to determine if Medicaid programs are collecting drug rebates to which they are entitled.

  • In this period, OIG audited Medicaid programs in Colorado, California, and Virginia and found that the programs did not always invoice and collect all rebates due for drugs administered by physicians.

Reducing Improper Payments

• In FY16, HHS estimated improper payments totaling more than $96 billion.

• During the period of the report, OIG issued several audits identifying improper payments related to eligibility determinations.

  • Express Lane eligibility – The express lane eligibility option (which allows states to simplify enrollment by relying on other agencies’ findings) led to improper payments totaling $294.7 million by Medicaid and CHIP for potentially ineligible beneficiaries.

  • Payments after death – Medicare and Medicaid continue to make payments following the death of beneficiaries. OIG found that Florida Medicaid overpaid $26 million to managed care organizations following the death of beneficiaries.

  • Incarcerated beneficiaries – CMS had not taken steps to recoup $34 million in potential improper payments for incarcerated beneficiaries.

•  OIG also issued several audits identifying payments for medical devices or services that should not have been paid.

  • Chiropractic Services – OIG estimates that 82% of payments for chiropractic services were not allowable ($358.8 million out of $438.1 million total).

  • Room and Board Costs Associated with Home & Community Based Services – State agencies claimed at least $176 million in unallowable Medicaid reimbursements under this program.

  • Cochlear Devices – Medicare improperly paid $2.7 million for cochlear devices replaced at no cost to the hospitals or beneficiaries.

Fostering Prudent Payment Policies

• OIG found that Federal payments for Part D catastrophic coverage of $33 billion in 2015 tripled the amount in 2010 as a result of high-price drug spending.

Fighting Fraud in HHS Programs

• Fraud and Abuse Enforcement Highlights:

  • Investigative recoveries of over $2.04 billion or the first half of FY17

  • 468 criminal actions

  • 461 civil actions

  • 1,422 exclusions from participation in Federal healthcare programs

• OIG partnered with state Medicaid Fraud Control Unites on 714 criminal investigations

• Key enforcement areas included:

  • Prescription drugs

  • Non-institutional care (e.g., home health services and home & community based services)

  • Grant fraud – embezzlement of HHS grant funds

Based on the report, it is clear that OIG is staying busy and that there will likely be plenty of material to include in the next semiannual report.