June 2022 OIG Work Plan Additions

Mental Health Parity

Mental health services have not always had the same parity of coverage and access as other medical services. Legislation aimed to correct this with acts like the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). This act promotes equal access to treatment for mental health and substance use disorder (MH/SUD) by prohibiting coverage limitations that apply more restrictively to MH/SUD benefits than medical or surgical benefits.

Examples of coverage limitations might include higher copayments, separate deductibles, and stricter preauthorization or medical necessity reviews, as compared to other covered medical treatments.

However, a recent 2022 report to Congress suggests health plans and health insurance issuers are failing to deliver parity for mental health and substance use disorder benefits to those they cover (see the full report here).

Federal regulations require managed care organizations (MCOs) with plans that provide services to Medicaid enrollees to comply with the parity provisions of MHPAEA. Federal regulations require that States or their MCOs, as applicable, conduct analyses to demonstrate compliance with parity requirements. CMS reviews states’ parity analyses as part of its review of states’ MCO (Managed Care Organizations) contracts.  

In this OIG work plan item, the OIG intends to audit CMS's oversight of states’ compliance with Federal parity requirements, including whether states and their MCOs conducted the required parity analyses and whether states ensured that their MCOs complied with certain parity requirements for MH/SUD benefits.

Indian Health Service Sanitation Program

The enactment of Public Law 86-121, in 1959, was a milestone in Indian health legislation. It authorized the creation of the Sanitation Facilities Construction (SFC) Program within the Indian Health Service. The Division of Sanitation Facilities Construction administers the nationwide SFC Program, which is responsible for the delivery of environmental engineering services and sanitation facilities to American Indians and Alaska Natives and provides homes and communities with essential water supply, sewage disposal, and solid waste disposal facilities. This work helps prevent the spread of certain diseases.

The SFC Program accomplishes its responsibilities through the allocation of available resources to the 12 Indian Health Service (IHS) area offices.

In fiscal year 2021, IHS identified a need of more than $3.4 billion (about $10 per person in the U.S.) for SFC projects affecting more than 248,000 new and existing homes. To address that need, Congress appropriated $3.5 billion (about $11 per person in the U.S.) to the SFC Program through the Infrastructure Investment and Jobs Act.   OIG’s Work Plan item will assess IHS's capacity to establish agreements and contracts for administering the supplemental $3.5 billion (about $11 per person in the U.S.), and to oversee the construction of projects paid for using that funding.

Medicaid and Maternal Health

Much work has been done to raise awareness of health disparities relating to pregnancy. For example, the Kaiser Family Foundation has published information on “Racial Disparities in Maternal and Infant Health: An Overview”. Similarly, the CDC has also issued information about racial and ethnic disparities in pregnancy.

The OIG reports that Medicaid is the nation's largest maternal healthcare payor, financing more than 42 percent of all U.S. births, and many pregnant Medicaid beneficiaries are enrolled in managed care plans. However, many pregnant people in the United States lack access to maternal healthcare. This is concerning because maternal healthcare can improve pregnant people's pregnancy outcomes.

The OIG plans to conduct a study to identify strategies to increase access overall and reduce disparities in access to maternal healthcare for Medicaid beneficiaries enrolled in managed care.

MACs and Cost Reports

Hospital cost reports have been scrutinized for years and most compliance programs include these activities as a significant area of potential risk because the financial implications of finalizing cost reports incorrectly can be considerable.

By way of example, the OIG continues to look at various aspects of hospital costs. They conducted a study of Medicare regulations that require established hospitals to be paid capital costs through the Inpatient Prospective Payment System (IPPS). These regulations also allow new hospitals exemption from the IPPS payment methodology for capital costs and, instead, to be paid for these costs on a cost reimbursement basis for their first two years of operation. They issued their findings in an August 2021 report and found that new hospitals were paid three times more—or an average of almost $1.3 million more per cost report—under the reasonable cost methodology than if they had been paid for their capital costs under the IPPS.

HHS contracts with Medicare Administrative Contractors (MACs) to process cost reports and determine payment amounts to providers. MACs determine the total amount of reimbursement based on providers' cost reports. Some cost reports that have been audited and settled are reopened later to correct audit adjustments. CMS has stated it doesn’t maintain data related to the number of cost reports that are reopened, the monetary adjustments to the settlement made because of reopening, or the types and/or causes of adjustments.

In this OIG Work Plan item, the OIG’s objectives will be to:

    1. quantify the extent to which the MAC (Medicare Administrative Contractors) amends audit adjustments after cost reports have been audited and settled, and whether the audit adjustments contain obvious errors or are inconsistent with the law, regulations and rulings, or general instructions
    2. quantify the effect of amended audit adjustments
    3. gain an understanding of the types and/or causes of amended audit adjustments.   OIG plans to proceed by initially auditing a single MAC, and based on the results, potentially expand their work to MACs.

The OIG Work Plan Items

If any of these items might impact your organization, remember it’s always wise to be ahead of the curve and adjust your compliance program before your organization is targeted for noncompliance. Questions? Put them in the comments below and one of our experts will respond as soon as possible. Struggling to juggle all things compliance these days? Compliance Manager might be the solution you need to simplify your workday.


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