Life Science Compliance Update

« Previous article | Home| Next article »

April 26, 2013

HHS OIG: Proposed Budget for FY 2014


We previously wrote about President Obama’s FY 2014 budget for the U.S. Department of Health and Human Services (HHS) and its related agencies.  We are reporting separately on the President’s budget for the Office of Inspector General (OIG) for HHS, which issued a 76-page justification for its FY 2014 budget.  In the justification, OIG pointed to its previous FY 2012 reports about its activities, oversight, and success. 

Interestingly, OIG noted that it was responsible for overseeing 24 cents of every Federal dollar spent and that on average, each OIG full-time equivalent (FTE) was responsible for overseeing $478 million.  Eighty-two percent of efforts were dedicated to oversight of the Centers for Medicare and Medicaid Services (CMS) and 18 percent to non-CMS oversight.  For every dollar spent on healthcare fraud and abuse enforcement, the government has returned $7.90. 

OIG called for $320 million, an increase of $82 million above the FY 2012 actual level, for Medicare and Medicaid oversight.  This request supports the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative and related program integrity efforts, including identifying questionable billings and reducing improper payments.  OIG’s efforts resulted in estimated savings and expected recoveries of approximately $15 billion in FY 2012. 

The proposed law in FY 2014 includes (1) $25,000,000 to continue oversight of activities previously funded through expired appropriations, and (2) $52,751,000 to support the Administration’s HEAT initiative, including  

  • sustaining Medicare Fraud Strike Forces; 
  • leveraging technology and data to continue program integrity efforts to  address emerging trends; 
  • adapting to a changing health care system; 
  • increasing efforts to address improper payments and other waste;    
  • improving patient safety and quality of care; and
  • improving IT security at health care organizations.  

The funds will ensure that resources are available to sustain Strike Forces and expand other program integrity efforts.  OIG noted that in 2012, the agency entered into 35 new corporate integrity agreements (CIAs) and is now monitoring compliance with 214 CIAs.

In addition to Medicare Fraud Strike Force efforts and other investigative efforts, possible issues and areas of oversight to be considered for 2014 include the following:  

Leveraging Technology and Data To Continue Program Integrity Efforts and Address Emerging Trends: Advances in data analysis have changed the way OIG investigates health care fraud and significantly reduced the time from investigation to indictment.  However, health care fraud itself has become more sophisticated, as criminals use advances in technology, including electronic health records, to their advantage.  Evidence collection is moving increasingly away from paper files to an unprecedented amount of electronic evidence to be seized and analyzed. As such, there is an increasing demand for forensic enhancements to more effectively analyze investigative data.  

Advances in data analysis have the potential to provide OIG, and its law enforcement partners, with more leads to investigate than ever before.  It is anticipated that advances in OIG’s efforts in this area, along with those of CMS, through its Fraud Prevention System, will make it imperative that OIG have the resources needed to analyze data and to investigate allegations of fraud.  

One example of recent work on using data to analyze trends and possible program vulnerabilities involves CMS payments for evaluation and management (E/M) services. Between 2001 and 2010, Medicare payments for Part B items and services increased by 43 percent, from $77 billion to $110 billion.  During this same time, Medicare payments for E/M services increased by 48 percent, from $22.7 billion to $33.5 billion. E/M services have been vulnerable to fraud and abuse.  In 2009, two health care entities paid over $10 million to settle allegations that they fraudulently billed Medicare for E/M services.  CMS also found that certain types of E/M services had the most improper payments of all Medicare Part B service types in 2008.  While this study did not determine whether these E/M claims were inappropriate, recommendations were made to CMS to address the potential vulnerabilities.  

Adapting the Oversight Approach to a Changing Health Care System: Changes are taking place across the health care industry and are fueled by innovations in science and IT, the need to address health care spending, the shift from volume-based to value-based payment, advances in quality measurement, and increasing access to care. Others changes include growth in Medicaid enrollment, an emphasis on coordinated care, and an increased use of electronic health records.  OIG will need to adopt oversight approaches that are suited to an increasingly sophisticated health care system and that are tailored to protect programs and patients from existing and new vulnerabilities.  

Identifying Questionable Billing and Reducing Improper Payments: OIG continues to conduct targeted reviews to determine the scope of improper payments and areas of questionable billing for specific service types and recommend actions to improve program safeguards.  By reviewing billing data, medical records, and other documentation associated with claims, OIG identifies services that are questionable, undocumented, not medically necessary, or incorrectly coded, as well as duplicate payments and payments for services that were not provided.  In doing so, OIG uncovers payment vulnerabilities and makes recommendations to address them.  

One example of work in uncovering payment vulnerabilities is OIG’s report on retail pharmacies with questionable Part D billings.  In 2009, retail pharmacies each billed Part D an average of nearly $1 million for prescriptions.  Over 2,600 of these pharmacies had questionable billing.  These pharmacies had extremely high billing for at least one of the eight measures we developed.  For example, many pharmacies billed extremely high dollar amounts or numbers of prescriptions per beneficiary or per prescriber.  This could mean that a pharmacy is billing for drugs that are not medically necessary or were never provided to the beneficiary. Although some of this billing may be legitimate, pharmacies that bill for extremely high amounts warrant further scrutiny. The Miami, Los Angeles, and Detroit areas were the most likely to have pharmacies with questionable billing.  

On the topic of drug diversion in both Part D and Medicaid, OIG has seen a significant increase in its investigative caseload in FY 2012.  These cases range from drug-seeking beneficiaries to large-scale criminal enterprises engaged in high-dollar drug trafficking. HEAT and Strike Force efforts have also increased in this area.  As a result, an increased caseload, continued use of Strike Force resources, and proactive data analysis of drug diversion activity is expected in the coming fiscal year and beyond.  

Improving Patient Safety and Quality of Care: The challenge of ensuring that beneficiaries receive quality health care has many dimensions, including overseeing providers’ compliance with quality-of-care standards, ensuring patient safety, and identifying opportunities for improvements in quality of care. OIG work in this area includes:  

  • examining nursing facilities’ compliance with selected Federal requirements for quality of care and
  • reviewing the extent to which Medicaid-enrolled children are prescribed atypical antipsychotic drugs.

Improving IT Security at Health Care Organizations: The challenge of ensuring that health care organizations have adequate IT security to protect their systems and sensitive data is an ongoing endeavor.  OIG work in this area includes reviews at hospitals and Medicare, Medicaid, and Part D providers.

« Previous article | Home| Next article »


TrackBack URL for this entry:

Listed below are links to weblogs that reference HHS OIG: Proposed Budget for FY 2014:


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.


Preview | Powered by FeedBlitz


April 2018
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30