Deeper Than the Headlines: OIG Work Plan Updates - Jan. 2019

It’s that time again. The OIG has updated their work plan with January 2019 additions. Here are some of the recent items I thought you’d find of interest.

Duplicate Payments for Home Health Services Covered Under Medicare and Medicaid

Medicare Home Health Agency (HHA) coverage requirements state that an HHA is responsible for providing all services either directly, or under arrangement while a beneficiary, is under a home health plan of care authorized by a physician. Consequently, Medicare pays a single HHA overseeing that plan. "Dual eligible beneficiaries" generally describes beneficiaries eligible for both Medicare and Medicaid. Medicare pays covered medical services first for dual eligible beneficiaries because Medicaid is generally the payer of last resort. The OIG plans to determine whether States made Medicaid payments for home health services for dual eligible beneficiaries who are also covered under Medicare.

Medicare Outpatient Outlier Payments for Claims with Credits for Replaced Medical Devices

CMS requires hospitals to submit a zero or token charge when they receive a full credit for a replacement device. However, CMS does not specify how charges should be reduced for partial credits. CMS makes an additional payment (an outpatient outlier payment) for hospital outpatient services when a hospital's charges, adjusted to cost, exceed a fixed multiple of the normal Medicare payment. Prior OIG reviews were focused on finding unreported credits for medical devices and recommended that CMS recoup Medicare funds for the overstated ambulatory payment classification payment only. This audit focuses on overstated Medicare charges on outpatient claims that contain both an outlier payment and a reported medical device credit. OIG will determine whether Medicare payments for replaced medical devices, and their respective outlier payments, were made in accordance with Medicare requirements.

Medicare Payments for Clinical Diagnostic Laboratory Tests in 2018: Year 1 of New Payment Rates

Medicare is the largest payer of clinical laboratory services in the nation. Medicare Part B covers most lab tests and pays 100 percent of allowable charges, with no beneficiary copayment. In 2017, Medicare paid $7.1 billion for lab tests, a total that has changed very little in the 4-year period from 2014 through 2017. The Protecting Access to Medicare Act of 2014 (PAMA) requires CMS to set payment rates for lab tests using current charges in the private healthcare market. On January 1, 2018, CMS began paying for lab tests under the new system mandated by PAMA. PAMA requires OIG to publicly release an annual analysis of the top 25 laboratory tests by expenditures. In accordance with PAMA, OIG will publicly release an analysis of the top 25 laboratory tests by expenditures for 2018, the first year of payments made under the new system for setting payment rates.

Follow-up Review on Inpatient Claims Subject to the Post-Acute-Care Transfer Policy

Medicare makes the full Medicare Severity Diagnosis-Related Group (MS-DRG) payment to a hospital that discharges an inpatient beneficiary "to home." However, under the post-acute-care transfer policy for certain qualifying MS-DRGs, Medicare pays a hospital that transfers an inpatient beneficiary to post-acute care a per diem rate for each day of the stay. This rate is not to exceed the full MS-DRG payment that would have been made if the inpatient beneficiary had been discharged. A prior OIG review identified Medicare overpayments to hospitals that did not comply with Medicare's post-acute-care transfer policy. The OIG found that hospitals transferred patients to certain post-acute-care settings, but improperly claimed the higher reimbursement associated with discharges "to home." Specifically, these hospitals used incorrect patient discharge status codes on their claims by indicating that their patients were discharged "to home" rather than transferred to a post-acute-care setting (e.g., home health services, skilled nursing facilities (SNFs), non-Inpatient Prospective Payment System (IPPS) hospitals or hospital units). OIG's review found that CMS common working file (CWF) edits related to transfers to home health care, SNFs, and non-IPPS hospitals were not working properly. As a result, the OIG recommended that CMS correct the CWF edits, ensure they are working properly, and recover the identified overpayments in accordance with its policies and procedures. CMS agreed with the recommendations and stated that it will update the CWF edits. This follow-up audit will determine whether CMS corrected the CWF edits and has ensured they are working properly moving forward.

Utilization and Pricing Trends for Naloxone in Medicaid

Opioid abuse and overdose deaths are at epidemic levels in the United States. In response, both the U.S. Surgeon General and CMS have stated that increasing access to naloxone, especially among members of the public who are at risk or who know someone at risk, is a top priority. Naloxone is a medication designed to rapidly reverse opioid overdose. However, many stakeholders have expressed concerns that the high cost of naloxone may impede increased access. Medicaid could play a significant role in addressing the issue of naloxone access because the program covers nearly 40 percent of nonelderly adults with opioid addiction. The proposed data brief would: 1) Trend utilization of, and expenditures for, naloxone in Medicaid over a 5-year period. (2) Determine how the cost-per-dose for naloxone under Medicaid compares to other available prices, and (3) Determine the proportion of all naloxone distributed in the U.S. that was paid under Medicaid between 2014 and 2018. This information can help stakeholders determine how to increase naloxone access, in a cost-effective manner, to affected Medicaid-eligible beneficiaries.