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Payment for Chiropractic, Dental Services Among OIG Recommendations to CMS

June 30, 2017:

The Office of Inspector General’s latest semiannual report to Congress, released in March, gives a snapshot of its highest priorities. The report summarizes the OIG’s enforcement actions over the past six months as well as its recommendations to the Centers for Medicare and Medicaid Services (CMS) for how it can address weaknesses in federal health care programs. Providers who pay attention to OIG concerns can get a heads up on what the OIG and CMS will be focusing on in the near future.

The report identifies three key areas of OIG enforcement since last fall: combating drug diversion (giving or selling a legally prescribed drug to someone other than the person it was prescribed for); uncovering fraud in noninstitutional settings, such as home health and personal care; and investigating grant fraud.

The agency also reports that it investigated the following and made recommendations to CMS:

Compliance of Medicare payments for chiropractic services with requirements: The agency found that, because of ineffective CMS controls, Medicare paid about $350 million in 2013 for chiropractic services that were medically unnecessary, incorrectly coded, insufficiently documented, or not documented at all. In fact, OIG found that most chiropractic services—82 percent of the sample it studied—did not comply with Medicare requirements. Extrapolating to all chiropractic services, OIG estimates that of the $438.1 million Medicare paid for such services in 2013, a whopping $358.8 million was unallowable. Of four OIG recommendations, CMS agreed with two: it will determine a reasonable number of chiropractic services needed to treat spinal subluxation and improve its educational outreach to chiropractors regarding Medicare coverage requirements.

Suitability of inpatient rehabilitation hospital patients for intensive therapy: The report notes that OIG found that some patients are admitted to intensive rehabilitation facilities even though they lack the endurance to benefit from the services, or have physical limitations, health problems, or a mental status that precludes participating in rehabilitation. Many of these patients remain in the facilities for more than three days even though they are unable to benefit from intensive rehab and would be better suited to another setting, such as a skilled nursing facility. The agency urges CMS to provide guidance to facilities so that they can ensure patients are sent to the appropriate post-acute setting.

The inflationary effect of high-price drugs on federal payments for Medicare Part D catastrophic coverage: The agency points out that federal payments in 2015 for Part D catastrophic coverage were triple what they were in 2010. To shield patients from having to pay more and ensure their access to needed drugs, OIG is urging CMS to consider restructuring Part D, becoming more transparent, promoting value-based options, and revising laws to enable the federal government to negotiate prices for drugs.

CMS management of the Quality Payment Program: Acknowledging that CMS has made great strides in implementing its QPP, OIG did find two weaknesses that should be addressed in 2017. First, CMS should make sure to help clinicians prepare to participate in QPP and second, the agency is urged to develop IT systems for data reporting and scoring, and payment adjustment.

Vulnerabilities under Medicare’s two-midnight hospital stay policy: OIG found weaknesses in hospital billing under Medicare’s requirement that a patient spend at least two midnights in a hospital to qualify as an inpatient. The agency found many possibly inappropriate short inpatient stays and a growing number of those with outpatient stays having to pay more for services and having more limited access to skilled nursing facility services. CMS has agreed to explore ways to ensure that those considered outpatients have similar cost-sharing protections and SNF access as inpatients.

Hospital compliance with Medicare’s requirements for reporting cochlear devices replaced without cost: The OIG uncovered $10 million in incorrect payments for replacements of cochlear devices for which hospitals received manufacturer credits or that still fell under a manufacturer’s warranty. CMS has agreed to educate hospitals on how to bill for and report medical devices that are replaced without cost to the hospital or beneficiary.

Medicare payment for incarcerated beneficiaries: Although CMS is required to ensure that Medicare does not pay for services rendered to incarcerated beneficiaries, OIG discovered that approximately $34.6 million in such payments were made for claims submitted in 2013 and 2014. OIG points out that CMS’s policies for preventing such payments and corrective actions are insufficient for addressing the problem.

Compliance of payment for hospital outpatient dental services with Medicare requirements: Out of 600 randomly selected outpatient dental services that OIG studied, 542 did not comply with Medicare requirements for the payments from Medicare contractors. Although CMS will not implement recommended national edits for such services, it has agreed to work with contractors to develop and strengthen local edits.

The OIG report can be accessed online at https://oig.hhs.gov/reports-and-publications/archives/semiannual/2017/sar-spring-2017.pdf.


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