The Office of Inspector General (OIG) at the Department of Health and Human Services has released its semiannual report describing OIG’s reviews, recommendations, and investigative activities during the first half of FFY 2011.  OIG reports expected recoveries of about $3.4 billion resulting from audits and investigations, including 349 criminal actions and 197 civil actions.  Items of special interest include:

  • Wisconsin Physicians Service (WPS) made incorrect Medicare payments in excess of hospital charges for outpatient services for calendar years (CYs) 2004 through 2007, including overpayments not refunded totaling $9.2 million.  Overpayments were identified through OIG’s audit of claims where Medicare payment exceeded the provider’s billed charges for outpatient services.  The incorrect payments involved excessive units of service, incorrect HCPCS codes, unallowable services, and lack of supporting documentation.
  • Intermediaries made an estimated $6.6 million in overpayments to ambulatory surgical centers (ASCs) for services provided to beneficiaries during covered Part A stays in skilled nursing facilities (SNFs) during CYs 2006 through 2008.  Under the “consolidated billing rules,” payment for the ASC services was deemed to be included in the SNFs’ Part A payments.
  • OIG recommends closer monitoring by CMS of SNFs billing for higher-paying resource utilization groups (RUGs), like ultra-high level therapy, due to concerns that the payment system incentivizes SNFs to bill for more therapy than is needed.
  • OIG identified 20 high-utilization counties whose per-beneficiary spending on outpatient therapy was more than 72 percent above the national average.  OIG recommends that the Centers for Medicare and Medicaid Services (CMS) review outpatient therapy claims in high-utilization areas and revise the therapy cap exception process.
  • According to OIG, CMS should focus on error-prone providers for review and corrective action.  OIG recommends that CMS use available error rate data from the Hospital Payment Monitoring Program and the Comprehensive Error Rate Testing (CERT) program to identify error-prone providers, require them to develop corrective action plans, and share error rate data with intermediaries to assist in identifying improper payments.
  • Santa Clara Valley Medical Center paid $4.3 million to resolve its False Claims Act liability for improper billing of 1-day hospital admissions that did not meet “medical necessity” criteria for inpatient services and should have been billed as outpatient observation services.  This is the only item in the OIG’s Semiannual Report on this issue.
  • OIG has released educational materials for new physicians on how to avoid Medicare and Medicaid fraud and abuse.  The Roadmap for New Physicians, which summarizes the five main fraud and abuse laws, is available by clicking here.

The full report is available by clicking here.