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OIG: CMS not doing enough to fight fraud, waste and abuse

Watchdog group says CMS still needs to control overpayments to home health and nursing facilities, fix EHRs

Improper Medicare payments and fraud populated the Office of Inspector General's (OIG) list of the top 25 unimplemented recommendations, according to a report from the watchdog agency that offered insight into where the Centers for Medicare & Medicaid Services (CMS) still needs to take action to eliminate fraud, waste and abuse. 

The OIG cited previously identified problems with inappropriate Medicare payments to home health agencies, skilled nursing facilities (SNF) and ineligible beneficiaries that CMS has not addressed. New regulations under the Affordable Care Act require physicians to document face-to-face encounters with home health patients; however, 32 percent of claims in 2011 and 2012 did not meet those requirements, resulting in $2 billion in potential overpayments. CMS stated it is implementing a plan for oversight through a Supplemental Medical Review Contractor.

Previously, the OIG and others raised concerns about medically necessary therapy services tied to resource utilization group (RUG) scores. In 2009, one fourth of SNF therapy claims were misreported, leading to $1.5 billion in inappropriate payments from Medicare. CMS is in the second phase of a project that aims to identify alternate payment methods for therapy services.

Medicare payments made to incarcerated individuals have been problematic as well. From 2009 to 2011, more than $33 million in payments were made to nearly 12,000 incarcerated beneficiaries, all of which CMS was unable to recoup. Last year, meanwhile, OIG said that Medicare Part D overpaid nearly $12 million in drug costs to incarcerated individuals. Although CMS has agreed to find ways to improve the timeliness with which it receives incarceration information, it did not agree with OIG's recommendation to work with Medicare contractors to ensure exemption codes are processed correctly.

The OIG added that timely collection of Medicare overpayments remains subpar. From fiscal year 2007 through the first half of 2009, CMS collected just $84.2 million of more than $416 million in overpayments. CMS said it would review necessary changes to ensure collection plans and recoveries were clearly described and reported, the OIG report said.

Finally, the OIG indicated that the transition from paper medical records to EHRs has left healthcare information vulnerable to security breaches and potential fraud, as demonstrated by recent attacks on Anthem and Premera. In previous reports, the OIG has found that hospitals have not been using certain recommended safeguards, like audits and access controls, to their full potential. Although CMS and the Office of the National Coordinator for Health Information Technology have met to discuss EHR fraud, no formal plan is in place, according to the OIG report.

For more:
- here's the full OIG report (.pdf)

Related Articles:
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Florida cracks down on fraud tied to therapy clinics
OIG to CMS: Quit paying drug costs of jailed beneficiaries
Faster isn't always better: Recognizing EHR fraud risks