OIG Releases Report on Health Care Fraud and Abuse

On May 31, the HHS Office of Inspector General (“OIG”) issued its Semiannual Report to Congress outlining the agency’s operations during the first half of fiscal year 2016. According to the report, OIG recovered $2.77 billion in improper payments, including $554.7 million from audits and $2.2 billion from investigations, between October 2015 and March 2016. The recoveries made during the first six months of fiscal year 2016 are nearly $1 billion more than those made during the first half of fiscal year 2015.

OIG reported 383 civil actions and 428 criminal actions between October 2015 and March 2016, including a $72 million settlement with the Tuomey Healthcare System regarding False Claims Act (“FCA”) liability for contracts violating the Stark Law and a $310 million civil FCA settlement with Olympus Corporation of the Americas over kickback allegations. The agency’s document indicated that it had charged 87 individuals or organizations and recovered $116.8 million under Medicare Fraud Strike Force investigations during the first half of fiscal year 2016. OIG also announced that 1,662 individuals or entities were barred from participating in federal health care programs during the reporting period.

MedPAC Calls for Adjustment in Hospital Readmission Penalties

On May 31, the Medicare Payment Advisory Commission (“MedPAC”) sent a comment letter to CMS urging the agency to make revisions to the hospital readmission penalty program, which was created under the ACA. The program was designed to provide incentives to hospital officials and staff who take into account patients’ care after they are discharged. Beneficiaries who are readmitted to a hospital for certain conditions within 30 days after discharge can result in a readmission penalty of three percent of the hospital’s Medicare payments.

In its comments, MedPAC asked CMS to adjust the overall readmission penalties so they can be reduced if a hospital’s performance improves. The commission previously proposed this amendment in a June 2013 report to Congress. MedPAC recommended that Congress pass legislation to allow CMS to implement an all-condition readmission measure with a fixed target.

Part B Demonstration Final Rule Delayed Until 2019

According to a regulatory agenda issued by the Office of Management and Budget (“OMB”), CMS is not expected to release a final rule for a new demonstration program for Medicare Part B payments until March 2019. CMS had previously indicated that it anticipated releasing the final rule this year. The Part B demonstration would test a new payment method that would decrease reimbursements for expensive drugs administered in physicians’ offices. Later phases of the program would test new ways to pay for drugs based on a drug’s outcomes.

Bipartisan E&C Working Group Supports MACRA QPP Proposal

The House Energy and Commerce Telehealth Working Group released a statement on May 23 expressing the group’s support for the CMS Quality Payment Program (“QPP”) proposed rule, a physician reimbursement framework required under the Medicare Access and CHIP Reauthorization Act of 2015. The agency’s proposal includes several provisions introduced by the Telehealth Working Group, such as including telehealth services in the definition of patient-facing encounters, allowing Next Generation ACOs to qualify as Alternative Payment Models (“APMs”) and adding care coordination that incorporates remote monitoring as a Clinical Practice Improvement Activity category.

In March, the Telehealth Working Group urged CMS to allow the use of telemedicine in APMs and the Merit-Based Incentive Payment System. It also recommended that telehealth data count as meaningful use of electronic health records. The group, which includes Reps. Greg Walden (R-OR), Doris Matsui (D-CA), Peter Welch (D-VT), Bob Latta (R-OH), Gregg Harper (R-MS), Bill Johnson (R-OH) and Markwayne Mullin (R-OK), said that CMS’s QPP proposed rule can help increase Medicare beneficiaries’ access to care and expand the ability of Medicare Advantage plans to provide health services using telemedicine.

Health-Related Bills Introduced This Week

No health-related legislation was introduced this week as Congress was out of session.

Next Week in Washington

The House and Senate return next week. On June 8, the House Ways and Means Health Subcommittee will hold a hearing examining committee member proposals to improve the Medicare program. In the Senate, the Labor-HHS Appropriations Subcommittee may mark up their annual spending bill.